Dell

1. PRODUCT DEVELOPMENT AT DELL COMPUTER CORPORATION PRESENTED TO: PROF. SUBIR GUHA PRESENTED BY: MOHD.ARISH

3. The company is also facing problems with their existing design of portable computer as they had some technical problem relating to battery life.

5. Micro computer revolution started in 1970’s, with machine catering to hobbyists and hackers.

6. In July 1974 an electronic magazine promoted a printed circuit board that came with instruction book for simulation.

7. In late 1970’s and 1980’s apple computer California based firm successfully commercialized an intuitively “easy to use” interface.

8. Initially Texas Instruments and Zenith entered in the business segment of microcomputer.

9. To play catch-up, IBM rapidly leveraged-off its traditional corporate base and strong direct sales and services organization.

11. He soon started buying and assembling components himself in order to sell computer his name directly to customers.

12. High growth and attractive margins allowed him to fund growth internally and he began to get number of orders from large oil companies and government agencies.

13. In order to promote dell product , dell started 24 hour complaint hotline & offer a supply of back up replacement equipment.

15. Dell assured product quality by extensively pretesting all the configuration options it offered.

16. A 24-hour telephone support system comprising well-trained technical representative provided the first post-shipment level of support.

17. Dell serviced its customers with combination of home based telephone representative and field based representative.

19. Company got stuck into Cash Crunch.

20. Dell stock plunged to $7 a share.

21. Profit slashed to $10 million.

22. Retail Selling proved contrary to dell.

23. Senior management unable to guide the firm to maturity.

26. Confidence = 100% (likelihood that it works as expected)

27. Net margin = 825,000 units * $600/units- $10m =$485m

28. Option 2: Go with the new battery technology (LiOn)

29. Confidence = 60% (likelihood that it works as expected): nsky

30. Net margin (if LiOn works) = 990,000 units*$600/unit-$10m =$584m

31. Net margin (if LiOn fails) = (825,000 units*0.5) * $600/units- ($10+0.3*$10) =$234.5m

32. If LiOn fails at launch, a switch to NiHi would require substantial rework (70% of original schedule and 30% of cost). Because competitors would have an established product on the market before them. Dell would lose about 50% of projected units sold.

35. Time(Months) Profile Planning Impementatiion Qualification Launch Acceptance

37. In 1992, with portables accounting for 17 percent of Dell’s sales, rumors circulated about quality problems.

38. Early in 1993, Dell canceled a new line of laptops under development, since these were deemed too slow and expensive.

39. By May 1993, notebook sales had slipped to just 6 percent of Dell sales previously account for 20-25 percent of sales.

42. By the end of the decade, the quality of the portability itself gave these machines gross margins that were typically 3 to 5 percent above desktops.

43. In 1993 portable were classified as laptops if they weighed between 4.5 & 8 pounds & sub notebooks if they weighed under 4 pounds.Portable computer Market Size (millions of units)

44. DELL FINANCIAL DATA

Dell

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