Dell Spells Success in China

The review was jointly organized by The Chinese Association for Quality, and the Tsinghua University Chinese Enterprise Research Center. This was the first exercise of its kind in China. The Tsinghua University had developed a 'China's Customer Satisfaction Evaluation System' under the guidance of the State Bureau of Quality and Technical Supervision. The model had received the approval of the Chinese Ministry of Science and Technology. The review covered five different categories of products: television sets, refrigerators, kitchen fans, microwave ovens and desktops. It was carried out in 50 major Chinese cities and the brands were evaluated on parameters such as brand image, value experience, quality experience, expected quality, loyalty and customer satisfaction through a telephonic survey.

While this recognition was a matter of delight for Dell, it came as a surprise to critics and company watchers. Back in 1998, when Dell had first introduced its legendary 'Direct Model' in China, its detractors had claimed that the company would not be able to replicate its global success in China. However, in the next five years, Dell's focus on customers and incremental growth helped it become the leading foreign player with a 5.8% market share in China, leaving behind players like IBM and HP-Compaq (Refer Exhibit I for a note on Dell's competitors). More significantly, many analysts believed that in the near future, Dell would pose stiff competition to the market leader, Legend, a domestic player.