group 7_dell pricing strategy
TRANSCRIPT
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PRESENTED BY GROUP NO. 7
The Power to Do More
7 Roshn i Das i ja
19Sneha Gupta
31
Tanmaykumar Kusar i
43Sandesh Rane
55Swaminathan V
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Group No. 7
Content
Introduction
Market Share
SWOT Analysis
Marketing Mix4 Ps
Ansoff Matrix
1
2
3
4
5
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Introduction to DELL
Established in 1984
Founder Mr. Michel Dell
Head Office Texas USA
World wide presence
Industry LeaderTop 3
Ranked 41 in Fortune 500 list
Revolutionised Computer Sales concept Rides on the R&D of others
Perfected the credo - Cut out the middleman.
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Quotes
Its amazing to me that our competitors think thecustomer is the dealer.
Michael Dell
When we sale these products we make money.When our competitors sale these products they loosemoney
Michael Dell
DELL is to the computer industry what Dominos is tothe pizza business.TIME magazine
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Three Golden Rules of DELL
Disdain inventory
Always listen to the customer
Never sell indirect
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Group No. 7
Case Summary
Dell is the industry leader in direct sale of personal
computers to consumers.
Since its start Dell has looked to over simplify its business for itscustomers. Offering a huge range of products and services,
which can all be accessed by the consumers from home orfrom the office very easily.
Dell revolutionized the way people buy computers.
Markets its direct sales model.
No intermediaries
No warehousing
Reduced price
Total customization of computers
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Market share Personal Computers
Dell HP Lenovo Acer
2009 12.20% 19.30% 8.10% 13.00%
2010 12.90% 17.90% 9.70% 12.00%
2011 12.10% 17.20% 13.00% 11.20%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
World PC Market Share
Source : Gartner
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Group No. 7 Source : Gartner
DELL HP Lenovo Acer HCLQ4 2010 13.00% 15.80% 9.60% 10.70% 7.80%
Q1 2011 16.70% 12.10% 9.70% 11.90% 7.10%
Q2 2011 16.70% 11.20% 12.10% 10.40% 6.60%
Q3 2011 15.00% 13.30% 12.10% 10.80% 5.60%
0.00%
2.00%
4.00%
6.00%
8.00%10.00%
12.00%
14.00%
16.00%
18.00%
Indian PC Market Share
Market share-Personal Computers
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The Promising Numbers
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SWOT Analysis
Weaknesses
1) Huge range of Products from manySuppliers
2) Dell lacked solid dealer/retailerrelationships.
3) Less investment in R&D
4) High dependency on suppliers.
For example, in 2004 Dell had torecall 4.4 million laptop adaptersbecause of a fear that they could
overheat, causing electric shocks orfires
Source: http://www.reuters.com
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SWOT Analysis
Opportunities
1) Introducing a wide range of Products Dell now competes against iPodand other consumer electronics brands.
2) Invest more in R&D
3) Assembled PC market
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SWOT Analysis
Threats
1) Competition in PC market Globally
2) Exposed to Fluctuation in the World currency markets
3) New entrants to the market pose potential threats.
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Marketing Mix 4 Ps
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Product Mix
Dell provides a wide variety of both business classand home/consumer class products and services
Desktops, Laptops, Servers, Mobiles, Notebooks,
Printers, LCDs, Home Theater Systems
IT Services, Business Consulting, Financial Services
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Promotion
Dude, You are getting a Dell Uses TV adds & magazines
Uses B2B customers to attract B2C &vice versa.
Customers attracted to DELL site via numerous web
links Always on Top ofGoogle Search
Promotion through retailers Wall Mart, Best Buy
Exclusive stores
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Need of Pricing Strategy
The ability of price to affect consumer decisionand its flexibility makes pricing strategiesimportant in meeting Dells objectives in acompetitive environment.
The main objective of Dell is to produce the lowprice and profitable laptop for the customer
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Pricing Strategies
Direct Business Model
Build to Order Manufacturing
Market Penetration Pricing
Strong Promotional Pricing
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Place
Worldwide presence
Factories at Key Locations
Key Suppliers to close to factory locations
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NEW
PRODUCT
Product Development:(existing markets, new products)
Using the base of existing product togrow others
Medium Risk
Product Diversification:(New markets, new products)
Seeking to create or develop newproduct, line or range
High Risk
Market Penetration:(existing markets, existing products)
Trying to take a greater share of existingmarket with an existing product.
Low Risk
Market Development:(new markets, existing products)
Finding or creating new market bytargeting new parts of the market.
Medium RiskEXISTING
MARKET
ANSOFFs MATRIX
NEW
EXISTING
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Dell enters into Smartphone market
What make one of the largest producer of PCs inworld to make foray in this market. Is a decisionto fortify the existing customer or attack a newsegment?
Its not a complete diversification, it could beslight different production package with newInnovation.
Exactly not a new innovation because as of nowAPPLE, RIM Blackberry and others already hadhold on this section.
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Dell enters into Smartphone market
So for this new decision Dell is using 2nd quadrant ofAnsoffs Matrix PRODUCT DIVERSIFICATION as ittrying to attract new market where everyone wantsto move up the value chain and therefore ready to
own a Smartphone. But here risk could be high.
So the execution will directly effect the impact ofrisk, proper execution can lower down the risk.
DELLs USP (service) can also play as a risk loweringfactor.
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Dell enters into Smartphone market
DELL is well known for its online retailing and
service, so if it will use its strategies in more
fine manner than they can make there
Smartphone a compelling device.
Now the point is that, what make dell to
outperform their competitor: The main essence
depends on FINAL DESIGNING.
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ANY QUESTIONS??
Thank You