dell's computer presentation nov. 09 arvind kumar

8/9/2019 Dell's computer Presentation NOV. 09 Arvind Kumar

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DELL VISION STATEMENT

According to MICHAEL DELL :-

y Its the way we do business. It's the way we interact withthe community. It's the way we interpret the worldaround us-- our customers needs, the future oftechnology, and the global business climate. Whatever

changes the future may bring our vision -- Dell Vision-- will be our guiding force.

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DELL MISSION

y Dell's mission is to be the most successful ComputerCompany in the world at delivering the best customerexperience in markets we serve. In doing so, Dell will meet

customer expectations of:1. Highest quality

2. Leading technology

3. Competitive pricing

4. Individual and company accountability5. Best-in-class service and support

6. Flexible customization capability

7. Superior...

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COMPANY DESCRIPTIONy Dell Computer Corporation, incorporated in October 1987, is a

computer systems company and a provider of computing productsand services.

y

The Company's primary product offerings include enterprisesystems, notebook computers and desktop computer systems. TheDell line of high-performance computer systems includes PowerEdge servers, Powernap server appliances, Power Vault storageproducts, Power Connect networking products, Dell Precision

workstations, Latitude and Inspiron notebook computers, andOptiPlex, Dimension and Smart step desktop computers.

y The Company also markets and sells Dell/EMC storage productsunder a long-term strategic relationship with EMC Corporation.

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y The Company provides targeted services forconsulting, deployment and support, as well as anextensive selection of peripheral hardware, includinghand-held products, and computing software.

y The Company conducts operations worldwidethrough wholly owned subsidiaries. Sales outside theUnited States accounted for approximately 35% of theCompany's revenues during the fiscal year ended

February 1, 2002 (fiscal 2002).

y Two types of customers: Relationship andTransactional

(cont.):

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REVOLUTIONIZED INDUSTRY

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y

1980 purchased first computer and takes it aparty 1984 Registers Dell Computer Corporation

y 1987 International subsidiary in UK

y 1988 Initial IPO $30 million

y 1989 Accumulates excess inventory

y 1990 First to sell through retail Computer USA, Best

buy, wal-mart

1994 Launches latitude note book setting new on

battery life

1996 introduce power edge server for small and medium

server market

1998 solidifies internet market $ 12 million per day from

customer. Setup supplier network

(cont.):

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BUSINESS STRATEGIES

1. Lower cost: avoid dealers markup and pass the saving tocustomer

2. Customized system: customers get exactly what they wants.

3. Lower inventory: 4 days of supply in inventory, and ability to

4. incorporate the latest technologies into products

5. Save time: takes only 36 hours to manufacture

6. Easy for customers to order: either log onwww.dell.com .

7. Aggressive pricing strategy to maximize market share9


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EXICUTIVE SUMMARYy Original Purchase: 500 shares @ $55.75 on 12th march

09

y Sales growth rate from previous 5 years: 32.61%

y Dell stock is fairly priced, if not slightly overvalued.However, the Company keeps grabbing market shares,and the quarterly numbers continue to improve. Also,

its financial strength has been excellent

y Bottom Line: A great company richly priced. Its worthholding but look somewhere else for better return.

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QUARTERLY INCOME STATEMENTDOLLARS IN MILLIONS

(EXPECT PER SHARE 2/1/09 8/2/09 11/2/09 5/3/09VALUE)

TATAL REVENUE 7468 8061 8066 8459 9144

GROSS PROFIT 1313 1416 1391 1515 1662

OPERATING INCOME 544 594 590 677 758

NET INCOME 429 456 457 501 561

BASIC NORMALIZED 0.164 0.175 0.176 0.194 0.217

EPS

DILUTED NORMALIZED 0.157 0.17 0.171 0.189 0.213

EPS

11/2/08

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Competitorsin PC Industry

DELL

25%

COMPAQ

13%HP

9%GATEWAY

7%

IBM

6%

OTHERS

40 %

U. . PCmarket hareTOP FIVE PLAYERS:1. Dell2. Compaq3. HP

4. Gateway5. IBM

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Competitorsin PC Industry (cont.):

WORLD WIDE TOP 5 PLAYERSWORLD WIDE TOP 5 PLAYERS

COMPANY SHIPMENT(MILLIONS)

MARKET SHARE GROWTH FROM3Q 2009

DELL

COMPAQ

IBM

HP

NEC

OTHERS

9.23

7.23

5.18

3.00

2.95

18.17

13.8%

10.4%

6.6%

6.4%

3.4%

59.4%

10.8%

-31.1%

-17.2%

-24.6%

-27.5%

-7.8%

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Competitorsin PC Industry(cont.):

DELL

NE

E

Worl w P r h r

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WORLDWIDE PC MARKET SHARE

1. HP

2. DELL

3. ACER

4. LENOVO

5. TOSHIBA

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WORLDWIDE SEQUENTIAL MARKET SHARE

1. HP

2. DELL

3. ACER

4. LENOVO

5. TOSHIBA

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US PC

MARK

ET SHAR

E

1. DELL

2. HP

3. GETEWAY

4. TOSHIBA

5. APPLE

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US SEQUENTIAL MARKET SHARE

1. DELL

2. HP

3. GETEWAY

4. TOSHIBA

5. APPLE

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DELLWW FINANCIAL PERFORMANCE

$

Liquidity Generated

$1.1B in Cash

fromOperations $11.9B in Cash

andInvestments*

Profitability Gross margin = 18.2% Revenue = 9.6%*

Growth Units +25% Y/Y Share

Gain+26% WW

Revenue$11.5B*

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DELLWORLDWIDE PRODUCT PERFORMANCE

DESKTOP

Dell # 1

19.4 share

DESKTOP

Dell # 1

19.4 share

OTE OOK

Dell #2

1 .1 share

OTE OOK

Dell #2

1 .1 share

SERVERS Dell #2

23.2 share

( 1 in US, 31.8 share)

SERVERS Dell #2

23.2 share

( 1 in US, 31.8 share)

PersonalWorkstationsPersonalWorkstations

Dell #1

49.8 share

Dell #1

49.8 share

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DELL MARKET STRATEGY

y If customer demand changes, ask WHY?Challenge them to understand why?(understand the underlying economics from thestandpoint of capital, supply chain, technology,

market trends).y Dont perfume the pig: Dont make something

appear better than it is.

y If you accept status quo as good enough, you are

managing in the rear view mirror.

y If we have a problem we have to fix it. We know ifwe dont, someone else will.

y Elevate a win to company wide accomplishment21


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DELL: A BUILD-TO-ORDER PC SUPPLY

CHAINy KEY PLAYERS IN THE PC SUPPLY CHAIN:-

y

Component Manufacturers :-The suppliers of high-tech components, such asmicroprocessors

y Distributors :-

They generally supply to corporate resellers and otherdistributors.

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y Corporate resellers :-

The corporate resellers or systems integrators

generally buy systems directly from manufacturersand install these systems at their corporate clients.

y Retailers :-

These are essentially the stores that sellcomputers to the end users. The end users arehome or small office users

DELL: A BUILD-TO-ORDER PC SUPPLY

CHAIN

(cont.):

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DELL INSPIRON

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WOULD YOU LIKE TO BE THE BRAND

MANAGER FOR THIS BRAND ?

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WHY ?y Me as a brand manager of dell :-

y I think there are also lessons for establishedbusinesses in Brand new in terms of the ability totranslate a single person's creativity into ascalable capability and into powerful demand-

side connections with consumers.

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Thank you

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dell's computer presentation nov. 09 arvind kumar

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