Dell's Problems in China

            
 
Strategic Management|Management Strategy |Business Strategy Case Study|Business Strategy|Case Study|Case Studies

ICMR HOME | Case Studies Collection

Case Details:

Case Code : BSTR193
Case Length : 18 Pages
Pages Period : 1995-2005
Organization : Dell Computers
Pub Date : 2006
Teaching Note : Available
Countries : China
Industry : IT Hardware

To download Dell's Problems in China case study (Case Code: BSTR193) click on the button below, and select the case from the list of available cases:

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies

OR


Buy With PayPal

Amount to be paid:



Prefer to pay in another currency ?
Select Currency for Payment



Exchange Rates: Click Here
Delivery Details: Click Here

Price:

For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extra

Business Strategy Case Studies
Case Studies Collection
Business Strategy Short Case Studies
View Detailed Pricing Info
How To Order This Case
Business Case Studies
Case Studies by Area
Case Studies by Industry
Case Studies by Company

Custom Search


Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



Chat with us

Strategic Management Formulation, Implementation, & Control, 12e

Please leave your feedback

Leave Your Feedback

ICMR India ICMR India ICMR India ICMR India RSS Feed

<< Previous

EXCERPTS Contd...

The Problems

With the urban markets in China almost saturated, the sales of PCs were growing faster in semi-urban and rural areas. However, in these areas, the use of Internet and credit card was not widespread. This was a major hindrance to Dell's direct model, as the model depended on pre-orders from consumers.

Dell received only 10% of its total orders through the Internet in China, because of low Internet usage. The number of e-commerce transactions was also low owing to low credit card and Internet usage. Dell had mainly concentrated on urban cities like Shanghai and Guangzhou. In these markets, PC penetration was higher and growth was around 2-3% a year as of 2004. In smaller cities and townships, growth was projected at 40% per annum. Lenovo's line of desktops had fared particularly well in these cities, helping the company capture a major chunk of market. In contrast, Dell's direct model had not done well in these regions...

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

The Future

China's PC shipments reached 3.56 million in the third quarter of 2005, 10.8% up compared to the third quarter of 2004. The market was worth RMB 20.26 billion with revenue growth of 6.9% as compared to the corresponding quarter of the previous year.

With the price of PCs going down, Chinese consumers had begun showing a preference for branded products and so small vendors were struggling to survive. With several foreign players entering the arena, the focus had shifted to 4th and 5th tier cities. According to Wang Tow from Analysys International, "The concentration degree in China's PC market is increasing and channel sales become the breaking point for vendors. Some local vendors in certain areas still has some market potential to explore due to the regional protectionism, but vendors who haven't enough strength while spread their sales channels aimlessly will face severe crisis for survival..."

Exhibits

Exhibit I: Market Share Of Pc Vendors In China (Third Quarter of 2005)
Exhibit II: Top Five Vendors - Worldwide PC Shipments
Exhibit III: DELL Stock Price (1996 -2005)
Exhibit IV: DELL - Financial Highlights (1987-1996)&(1997-2005)
Exhibit V: Benefits of the Dell Direct Model
Exhibit VI: Factors Influencing Growth of Computer Industry in China
Exhibit VII: DELL - Major Competitors in China


Custom Search





Economics for Managers Textbook
Textbooks Collection

Economics for Managers Workbook
ICMR books Collection

Case Studies in Business Strategy Volume VI

Case Studies in Business Strategy
e-Book on Business Strategy

Case Study Volumes Collection


 

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.