Final Dell SDM

7/29/2019 Final Dell SDM

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DELL | SA

Submitted To-:

Prof. JSK Chakravarthi

Submitted By -:

Ashish Kumar (12BSPHH010214)

Chandan Kumar (12BSPHH010262)

[DELL-FINAL REPORT ] September 9,

LES & DISTRIBUTION PROJECT

2013

1


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[DELL-FINAL REPORT ] September 9, 2013

DELL | SALES & DISTRIBUTION PROJECT 2

Table Of Contents Page No.

Sales department structure

3

Sales Department say in Marketing activities 6

Sales forecasting 11

Parameters on which quotas fixed 12

Sales force recruitment, compensation methods 13

Sales force performance evaluation - KRAs 17

Distribution of different products/brands 21

Sales Territories 22

Channel Members opinion on Company 24

References 26


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SALES DEPARTMENT STRUCTURE

Organisational Structure of Dell Company

Organisational Structure is the hierarchical framework within which an organisational

allocates rights and duties, and arranges its line of authority. Organisational structure

determines the manner and extent to which roles, power, and responsibilities are

delegated, controlled, and coordinated, and how information flows between levels of

management. In a centralized structure, decision flow from the top down.

In a decentralized structure, the decisions are made at a various different levels. A good

organisational structure can often spell the difference between a smooth operating

organization and one in chaos. By establishing a hierarchical structure with a clear chain of

command, companies are better able to streamline their operations.

Organizational structure is not static, but rather with the internal and external environment

in which companies change and enterprise adjustment strategy for enterprise organization

structure.

Finally from Dell's strategy and the organizational structure of the matching process of

revelation, given the organizational structure of the process of how to adapt to the strategic

principles and policy proposals.

DELL Organisational Structure

Dell (Dell) companies in 1984 by entrepreneur Michael Dell founded the Computer

industry; he is currently the longest-serving CEO. Since Dell entered the Chinese market,

choose a unique Marketing approach allows Dell jumped the sky. Dell's direct sales model,

collaborative supply chain, direct service and efficient marketing system combined into a


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whole for the Dell won the unparalleled competitive advantage to Dell's from a little-known

small company into the computer Industry giant.

Dell Corporations organizational structure is a functional, decentralized structure. The

company encourages different departments and functional components to contribute ideas

to enhance the strength of the organization.

The hierarchical structure provides defines the various functions provided by Dell

Corporation, including Business Development, Education, and Global. A decentralized

structure provides more learning availability for all members of the enterprise, as decisions

come from various levels; in contrast, the centralized structure has more of the decision-

making coming from the upper levels of the enterprise, such as the CEO and Vice Presidents.

In the divisional organization, every division has its own groups to support that specific

division (such as purchasing units and human resources units).

Within Dells organisational Sales and Support divisions, the structure is quite typical of the

technology sector - each division has a senior manager, who oversees the work of the

division with a group of team leaders, who each have responsibility for a group of

employees. The workforce is dominated by Sales and Marketing staff but also includes a

significant Technical Support staff, as well as personnel working in Finance, Business

Operations, IT and Human Resources divisions. The workforce in Dell is non-unionized.

Cross functional teams look at end-to-end repeatable processes with a view to improving

the customer experience, eliminating waste, reducing cost, increasing efficiencies and

removing low or non value-added activities from employees.


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Levels of Dell Corporation

Technical Level

Dell Corporation is a layered organization which consists of technical, management and

community levels (Boone, Kurtz, 1992). The technical level is very important for Dell

Corporation because of the nature of tasks it performs. Technology is the primary driving

factor in this arena. It is concerned with specific operations and discrete tasks, with the

actual job or tasks to be done, and with performance of the technical function.

Within Dell Corporation technical level includes the physical production of goods. Accept

computer technologies, accessories for these types of products are the next major market in

the electronics industry. Along with accessories, the demand for smart appliances for the

home and office will also grow. More and more consumers will want their everyday

appliances to be Internet-ready and able to think for themselves. These areas are where PC

and notebooks can find and exploit opportunities.

Administrative Level

Another level of organizational structure is the Administrative level. In Dell Corporation it is

concerned with the co-ordination and integration of work at the technical level. Decisions at

the administrative level relate to the resources necessary for performance of the technical

function, and to the beneficiaries of the products or services provided.

Administrative level is concerned with those activities involved in recruiting of professional

staff, training, and development within the organization and infrastructure, namely the

systems of technology planning, finance, quality control, etc. which are crucially important

to an organizations strategic capability in all primary activities

Decisions is concerned with mediating between the organisation and its external

environment, such as the users of the organisations products or services, and the

procurement of resources; and the administration of the internal affairs of the

organisation including the control of the operations of the technical function.

Institutional level

Institutional level is concerned with broad objectives and the work of Dell Corporation as a

whole. Decisions at this level are concerned with the selection of operations, and the

development of the organisation in relation to external agencies and the wider social

environment. It provides a mediating link between the administrative level and technical

level.

It should be mentioned that in Dell Corporation there is not a clear division between

determination of policy and decision making, co-ordination of activities and the actual


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execution of work. Most decisions are taken with reference to the execution of wider

decisions, and most execution of work involves decision.

Decisions taken at the institutional level determine objectives for the managerial level, and

decisions at the managerial level set objectives for the technical level. Dell Corporation

performs effectively having clear objectives and good communication.

Marketing Activities of dell

The Core Elements of DELL marketing activities strategies are -:

Build-to-order manufacturing and Mass Customization

Dell built its computers, workstations, and servers to order; none were produced for

inventory. Dell customers could order custom-built servers and workstations based on the

needs of their applications.

Desktop and laptop customers ordered whatever configuration of microprocessor speed,

random access memory (RAM), hard-disk capacity, CD-ROM drive, fax/modem, monitor size,

speakers, and other accessories they preferred.

The orders were directed to the nearest factory. Until recently Dell had operated its

assembly lines in traditional fashion, with workers each performing a single operation. An

order form accompanied each metal chassis across the production floor; drives, chips, and

ancillary items were installed to match customer specifications.

As a partly assembled PC arrived at a new workstation, the operator, standing beside a tall

steel rack with drawers full of components, was instructed what to do by little red and green

lights flashing beside the drawers.

When the operator was finished, the components were automatically replenished from the

other side of the drawers and the PC chassis glided down the line to the next workstation.


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Partnerships with suppliers

Sales Department believed that it made much better sense for Dell Computer to partner

with reputable suppliers of PC parts and components rather than to integrate backward and

get into parts and components manufacturing on its own.

Management also believed long-term partnerships with reputable suppliers yielded severaladvantages.

First, using name-brand processors, disk drives, modems, speakers, and multimedia

components enhanced the quality and performance of Dell's PCs. Because of the varying

performance of different brands of components, the brand of the components was as

important or more important to some buyers than the brand of the overall system.

Second, because Dell committed to purchase a specified percentage of its requirements

from each of its long-term suppliers, Dell was assured of getting the volume of components

it needed on a timely basis even when overall market demand for a particular component

temporarily exceeded the overall market supply.

Third, Dell's formal partnerships with key suppliers made it feasible to have some of their

engineers assigned to Dell's product design teams and for them to be treated as part of Dell.

When new products were launched, suppliers' engineers were stationed in Dell's plant. If

early buyers called with a problem related to design, further assembly and shipments were

halted while the supplier's engineers and Dell personnel corrected the flaw on the spot.

Fourth, Dell's long-run commitment to its suppliers laid the basis for just-in-time delivery of

suppliers' products to Dell's assembly plants in Texas, Ireland, and Malaysia

To help suppliers meet its just-in-time delivery expectations, Dell openly shared its daily

production schedules, sales forecasts, and new-model introduction plans with vendors.


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Just-in-time components inventories

Dell's just-in-time inventory emphasis yielded major cost advantages and shortened the

time it took for Dell to get new generations of its computer models into the marketplace.

New advances were coming so fast in certain computer parts and components (particularly

microprocessors, disk drives, and modems) that any given item in inventory was obsolete in

matter of months, sometimes quicker. Having a couple of months of component inventories

meant getting caught in the transition from one generation of components to the next.

Moreover, there were rapid-fire reductions in the prices of componentsmost recently,

component prices had been falling as much as 50 percent annually (an average of 1 percent

a week).

Intel, for example, regularly cut the prices on its older chips when it introduced newer chips,

and it introduced new chip generations about every three months. And the prices of hard-

disk drives with greater and greater memory capacity had dropped sharply as disk drive

makers incorporated new technology that allowed them to add more gigabytes of hard-diskmemory very inexpensively.

Collaboration with suppliers was close enough to allow Dell to operate with only a few days

of inventory for some components and a few hours of inventory for others. Dell supplied

data on inventories and replenishment needs to its suppliers at least once a dayhourly in

the case of components being delivered several times daily from nearby sources.

In a couple of instances, Dell's close partnership with vendors allowed it to operate with no

inventories. Dell's supplier of monitors was Sony. Because the monitors Sony supplied with

the Dell name already imprinted were of dependably high quality (a defect rate of fewer

than 1,000 per million), Dell didn't even open up the monitor boxes to test them.

Direct sales

Selling direct to customers gave Dell salespersons firsthand intelligence about customer

preferences and needs, as well as immediate feedback on design problems and quality

glitches.

With thousands of phone and fax orders daily, $5 million in daily Internet sales, and daily

contacts between the field sales force and customers of all types, the company kept its

finger on the market pulse, quickly detecting shifts in sales trends and getting prompt

feedback on any problems with its products.

If the company got more than a few similar complaints, the information was relayed

immediately to design engineers. When design flaws or components defects were found,

the factory was notified and the problem corrected within a matter of days.

Management believed Dell's ability to respond quickly gave it a significant advantage over

rivals, particularly over PC makers in Asia, that made large production runs and sold

standardized products through retail channels. Dell saw its direct sales approach as a totally


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customer-driven system that allowed quick transitions to new generations of components

and PC models.

Market segmentation

To make sure that each type of customer was well served, Dell Salesperson had made aspeco finer, more homogeneous categories.

In 1998, 90 percent of Dell's sales were to business or government institutions and of those

70 percent were to large corporate customers who bought at least $1 million in PCs

annually.

Many of these large customers typically ordered thousands of units at a time. Dell had

hundreds of sales representatives calling on large corporate and institutional accounts.

Its customer list included Shell Oil, Exxon, MCI, Ford Motor, Toyota, Eastman Chemical,

Boeing, Goldman Sachs, Oracle, Microsoft, Woolwich (a British bank with $64 billion in

assets), Michelin, Unilever, Deutsche Bank, Sony, Wal-Mart, and First Union (one of the 10largest U.S. banks).

However, no one customer represented more than 2 percent of total sales. Because

corporate customers tended to buy the most expensive computers, Dell commanded the

highest average selling prices in the industryover $1,600 versus an industry average under

$1,400.

Dell's sales to individuals and small businesses were made by telephone, fax, and the

Internet. It had a call center in the United States with toll-free lines; customers could talk

with a sales representative about specific models, get information faxed or mailed to them,

place an order, and pay by credit card.

Internationally, Dell had set up six call centers in Europe and Asia that customers could dial

toll free.The call centers were equipped with technology that routed calls from a particular

country to a particular call center.

Dell began Internet sales at its Web site (www.dell.com) in 1995, almost overnight achieving

sales of $1 million per day.

Customer service

Service became a feature of Dell's strategy in 1986 when the company began providing a

guarantee of free on-site service for a year with most of its PCs after users complained

about having to ship their PCs back to Austin for repairs.

Dell contracted with local service providers to handle customer requests for repairs; on-site

service was provided on a next-day basis. Dell also provided its customers with technical

support via a toll-free number, fax, and e-mail.


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DELL | SA

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activities both to improve produ

[DELL-FINAL REPORT ] September 9,

LES & DISTRIBUTION PROJECT

ajor selling point for winning corporate accou

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Dell Forecasting

Sales forecasting plays a very important role in setting the objectives of the sales

department. The accuracy in forecasting becomes the backbone for planning the company

operations and business plans. Sales forecast provides the organization the information

about the future sales which can help to plan the marketing mix and generate required

leads. Let us look at the need of sales forecasting and the benefits it provides to theorganization.

To successfully forecast demand, Dell maintains a constant flow of data in two information

loops:

1. One between customers and the Dell sales team

2. And the other among sales, procurement, and suppliers.

Key metrics Dell shares with suppliers include:

1. Forecasted sales dollars,2. Sales quantities and parts requirements.

In return, it receives data about how well suppliers can support these forecasts.

Demand Forecasting Management believed that accurate sales forecasts were key to

keeping costs down and minimizing inventories, given the complexity and diversity of the

companys product line. Because Dell worked diligently at maintaining a close relationship

with its large corporate and institutional customers and because it sold direct to small

customers via telephone and the Internet, it was possible to keep a finger on the pulse of

demandwhat was selling and what was not.

Moreover, the companys market segmentation strategy paved the way for in-depth

understanding of customers current needs, evolving requirements, and expectations.

Having credible real-time information about what customers were actually buying and

having firsthand knowledge of large customers buying intentions gave Dell strong capability

to forecast demand. Furthermore, Dell passed that information on to suppliers so they could

plan their production accordingly. The company worked hard at managing the flow of

information it got from the marketplace and quickly sending that information to both

internal groups and vendors.

Forecasting was viewed as a critical sales skill. Sales-account managers were coached on

how to lead large customers through a discussion of their future needs for PCs,workstations, servers, and peripheral equipment.

Distinctions were made between purchases that were virtually certain and those that were

contingent on some event. Salespeople made note of the contingent events so they could

follow up at the appropriate time. With smaller customers, there was real-time information

about sales, and direct telephone sales personnel often were able to steer customers

toward configurations that were immediately available to help fine-tune the balance

between demand and supply.


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Parameter on which Dell fixed their quota

Planning the sales quotas involves identifying the right quota depending upon several

factors and assigning them to the sales representatives. We know that sales representatives

of each region or territory may not be assigned the same sales quota. Let us understand the

list of factors which help in setting the sales quotas to sales representatives. Some of the

parameter given below:

Market size and potential

For each territory or region the market size and potential must be analysed by Dell. The

market potential can be known by the forecasting techniques which were discussed earlier.

The Once the existing market size is determined, quotas have to be planned accordingly so

that the market potential is fully utilized to achieve the maximum productivity levels.

It must be remembered most of the times that the sales quotas would be proportional to

the size and potential of the market. The quotas would not only depend upon the size and

potential because various other factors have to analysed which will be discussed in thissection.

Level of competition

Even if the market size and potential is huge, the sales quotas may not be high due to the

level of competition. For example, if the potential for the Dell computer in a particular

region is 0.1 million, then you cannot assign quotas to grab that 0.1 million. Quotas must be

realistic in nature taking the account of competition. If there are 5-6 Dell computer

customer then assigning the quotas to generate 30 40 percent of the potentials practical.

Again the quotas depend upon another factor current position of the organization in that

region.

Current position of the organization

In the previous example, gaining a 30-35 percent market potential is a practical task if the

Dell is one of the top players in that region. But if the Dell is a low level player or an entrant,

then getting 10 percent of the potential also would be a huge task. Hence the sales quotas

have to be planned accordingly based upon the current position of the organization.

Skills of the sales person

All the employees within the company may not be able to generate huge number of leads.Hence, setting same quotas for all the employees may not be achievable and may become a

de-motivating factor. The sales manager has to plan the quotas according to the skill of the

sales manager and may increase it in future.

The new employee may need to have a different sales quota while compared to the already

existing employee. If the quotas are not achievable, some time should be given by the sales


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manager to improve the selling skills and help in achieving the sales quota by the sales

representative. If required necessary training should also be provided.

Organization/ market objectives

When an organization expands to new territories or launches new products, it needs to,

plan the sales quotas very carefully. When it enters a new territory, the organization

objective may be to test the market or to become a leading player.

Hence sales quotas have to be planned accordingly with the objectives. If the organization

objective is to hold in the market in difficult times, the sales quotas may not be necessary to

increase from year to year as the objective of the organization is to generate the same sales

each year.

Hence, the organization objectives have to be kept in mind by the sales manager before

planning the sales quotas to the representatives.

FACTORS AFFECTING RECRUITMENT

Organizational /internal factors

Environmental /external factors

SOURCES OF RECRUITMENT-Internal Search

Job portals

HRIS

Notice boards

Circulars

SOURCES OF RECRUITMENT-External Search

Employee referrals

Advertisements

Educational institutions

Employment agencies

Internet


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Dell recruitment Process

Selection Process

Resumes/CVs Review

Initial Screening Interview

Analyze the Application Blank

Conducting Tests and Evaluating performance

Preliminary Interview

Core and Departmental Interviews

Reference checks

Job offer

Medical Examination

Placement


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APPLICATION FORMS

Gathered in standardized manner

1. Educational background

2. Past employment record

3. Extracurricular

INTERVIEWS

Dell personal interview is crucial part of dell for selection sales position because of that

interviewer must have skill for that.

Pattern interview

-question and Record

Semi-structured interview

-veteran salespeople for a major account

Field observation

-For shown the prospects what the job

SELECTION TESTS

Intelligence tests- That measure the minimum mental capability

Personality tests -Evaluate each personality characteristic

Aptitude tests -understand that employee interested to do task and this type activates


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Compensation Plan

Dell employs three types of compensation plans as followed -:

1. Straight -Salary Plan

This is the simplest compensation plan. Under it, salesperson receive fixed sums at

regular intervals(usually each week or month but sometimes every two

weeks),representing total payments for their services.

It is the logical compensation plan when the selling job requires extensive missionary or

educational work,when salespeople service the product or give technical and

engineering advice to prospects or users,or when salespeople do considerable

promotion work.

For example-Dell employs this compensation plan in which a fixed salary is given to the

salesperson who provide valuable information to the customer who visits Dell outlets to

buy the product.

Moreover, in after sales service the Dell salesperson comes and sorts the problem and

provide technical and useful information to the customer.

2. Straight Commission Plan

The theory supporting the straight compensation plan is that individual sales personnel

should be paid according to productivity.The assumption underlying straight commissionplan is that sales volume is the best productivity measure and can, therefore, be used as

the sole measure.

For example-Dell uses this compensation plan in which the salesperson are assigned a

certain no. Of units of PCs are to be sold in a particular month and on that basis

commission are assigned.

Now Dell Straight Commission Plan are broadly classified in two categories -:

Straight commission with sales personnel paying their own expenses.

Straight commission with the company paying expenses.

3. Combination Salary -andincentive

Most sales compensation plans are combinations of salary and commission plans.

In this the sales personnel have both the security of stable income and the stimulus of

direct financial incentive.


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According to the demand of the Dell product the combination plan keeps on varying like

(70%+30%) or (80%+20%).

This plan basically depends on the technology that the Dell has employed and the demand

for that product in the market.

With using this compensation plan Dell management has both financial control over sales

activities and the apparatus to motivate sales efforts.

SALES FORCE PERFORMANCE EVALUATION

The main objective of Dell to monitor the sales force is not about finding faults in the

performance of the sales team but the process of monitoring and evaluation should be used

as a mechanism to identify the problems and areas of improvement. Once the areas of

improvement are identified they have to be inculcated into the sales force through the

proper training methodologies.

The ideal question which comes to every sales manager while monitoring and performanceevaluation is what factors need to be measured to identify the true potential of his/her

sales force? In this unit we shall identify the two ways of measuring the sales force efforts

in terms of quantitative and qualitative factors.

We shall also understand the advantages and disadvantages of measuring only quantitative

factors. Ultimately at the end of the day it is the sales target which matters to most of the

sales managers. We shall understand the relationship between the efforts and the sales

target achieved in this unit.

Role of job description in performance evaluation

Job description as discussed earlier units informs the employees about their duties and

responsibilities at the work place. One must identify the set of tasks he/she needs to

perform according to the job description.

Objectives have to be set and employees have to work towards achieving them. In most of

the job descriptions the nature of work and various accountability factors will be

mentioned. In some of the job descriptions you may find the working conditions also such as

extensive travelling, working on the net all the time, taking continuous phone calls etc.

In this section let us understand about the job description which helps in setting the

objectives for the employees. Company makes a practice that monitoring and performanceevaluation would be on the objectives set according to the job description. Let us now look

at the direct and indirect sales force job description or activities they need to perform.

Direct sales force

Direct sales force involves mainly a one to one selling scenario. Several tasks need to be

performed in order to effectively handle the sales such as:-


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a) Contacting the prospect

b) Communicating with the prospect

c) Ensuring logistics during the sales process

d) Performing after sales service activities

e) Building rapport and keep in touch

It can be observed that no where the objectives indicated to generate revenues to the Dell.

It is intrinsically implied that when all the objectives are performed well, it leads to the

maximum revenue generation. Hence the main objective of evaluation process should be to

identify the efforts rather than the revenues.

The main objective is to create demand for the products by performing all the tasks in an

efficient and effective way possible. Whenever the sales force doesnt perform well, various

factors needs to be analyzed. Less revenue generated need not be exactly due to the

inefficiency of the sales force. Various internal and external factors might be responsible forthe low revenue generation. Some of the internal and external factors that can be

responsible are:-

Poor performance by the marketing department

Change in market dynamics

Change in the customer preferences

Inefficiency of the MIS division

Indirect sales force

In direct sales, the sales force are not directly employed by Dell but are entitled by acontract to sell your product. Indirect sales force of Dell are resellers, whole sellers, retailers

etc. to whom company sales force sells the product.

Lets us now understand some of the factors which needs to be analyzed in making up the

conclusion on performance evolution of the sales force who sell the products to the indirect

sales force. Some of the factors are:-

Availability of product

Visibility of stock

Stock piling in the pipeline

Primary Secondary Tertiary

Fig 1: Indirect sales force pipeline

Company CustomerRetailerDistributor

Dell Customer


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In the above diagram it can be understood that in indirect sales the company produced

goods will reach the distributor through the company sales force. The distributor is known

as the primary customer, the retailer as the secondary customer and finally the customer

who consumes the product is known as the tertiary customer.

The distributor distributes the goods among various retailers who in turn sell the goods to

the final customer. In such cases the sales figures are determined by the number of

products sold to the distributor. In the start the sales might be less but as time progress the

sales figure might improve drastically showing almost double or triple figures in sales

volume.

This increase might be due to the efficient work done by the sales force and can be used to

determine the performance of the sales force. But sometimes the increase in sales might be

just due to the piling of the stock. When the products are sold to the distributor they might

get piled up at that level and may not move to the retailer due to various reasons.

Sometimes the good might get piled up at the retailer in his/her store due to low sales.

Hence it is important to analyze these situations before arriving at a conclusion about thesales force performance. Sales manager has to look at how many products have be sold to

the tertiary consumer rather than just looking at the sales to the primary consumer.

In some other models of the indirect sales, you might also have the whole-seller within the

pipeline. Irrespective of the number of intermediaries in the sales process, the sales figure

should be arrived by looking at the sales done to the final customer who consumes the

product.

Role of a sales manager in monitoring and performance evaluation

One of the main objectives of the recruitment process is to hire a sales team whichperforms well as per the organization expectations. Once the recruitment process is finished

it is the role of the sales manager to duties to various sales representatives within the team.

Once the jobs are assigned, they need to be monitored and evaluated to identify the true

performance of the sales representatives. Identifying the true performance of the sales

force is an important task because of the following factors-:

Identifying the performance helps in identifying the areas of strengths and weakness in

the sales force

Proper training can be provided to improve the performance of the sales force

When performance evaluation identifies the true potential of the sales force, it wouldbe easy to identify the ideal goal setting

Unrealistic goal setting can be avoided and the motivation levels can be kept high

The attrition rate of the organization can also be decreased if realistic goals set and the

sales force could achieve them with their efforts.


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Quantitative and qualitative factors of monitoring

To determine the performance of the sales force, sales managers make use both the

qualitative and quantitative factors. Most of the time quantitative factors play a major role

in deciding the performance of the sales force.

There are many reasons why the sales manager prefers the numbers. One of the reasons is

that the quantitative factors lead to an unbiased way of performance evaluation process.

It should be understood that the evaluation process shouldnt just rely on the quantitative

factors and we also need to analyze certain qualitative factors as well in determining the

true performance of the sales force.

Quantitative factors

Some of the quantitative factors monitoring and performance evaluation include the

following:-

Number of sales

Revenue generated

Qualitative factors

Some of the qualitative factors monitoring and performance evaluation include the

following:-

Improved customer satisfaction levels

Improved team management skills like taking responsibilities, being accountable.

Improved behavioural skills within the team

Decreased conversion rate i.e. improved success rate in gaining the customer

Improved time management skills

It is important that both the qualitative and quantitative factors must be analyzed before

making a conclusion about the performance of the sales force.

It is observed that the team management skills and better team work would have a direct

affect on the performance of the sales force. Hence, let us understand in the final section of

the unit about the steps in developing a better team work in the organization.


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Distribution of Dell

Dells revenues had topped an astounding $25 billion. The meteoric rise of Dell Computers

was largely due to innovations in supply chain and manufacturing, but also due to the

implementation of a novel distribution strategy.

By carefully analyzing and making strategic changes in the personal computer value chain,

and by seizing on emerging market trends, Dell Inc. grew to dominate the PC market in less

time than it takes many companies to launch their first product.

No more middleman

Dell started out as a direct seller, first using a mail-order system, and then taking advantage

of the internet to develop an online sales platform. Well before use of the internet went

main stream, Dell had begun integrating online order status updates and technical support

into their customer-facing operations.

Dell offered superior customer choice in system configuration at a deeply discounted price,

due to the cost-savings associated with cutting out the retail middleman. This move away

from the traditional distribution model for PC sales played a large role in Dells formidable

early growth.

Additionally, an important side-benefit of the internet-based direct sales model was that it

generated a wealth of market data the company used to efficiently forecast demand trends

and carry out effective segmentation strategies.

This data drove the companys product-development efforts and allowed Dell to profit from

information on the value drivers in each of its key customer segments.

Virtual integration

On the manufacturing side, the company pursued an aggressive strategy of virtual

integration. Dell required a highly reliable supply of top-quality PC components, but

management did not want to integrate backward to become its own parts manufacturer.

Instead, the company sought to develop long-term relationships with select, name-brand PC

component manufacturers.

Dell also required its key suppliers to establish inventory hubs near its own assembly plants.

This allowed the company to communicate with supplier inventory hubs in real time for the

delivery of a precise number of required components on short notice.

This just-in-time, low-inventory strategy reduced the time it took for Dell to bring new PC

models to market and resulted in significant cost advantages over the traditional stored-

inventory method.

This was particularly powerful in a market where old inventory quickly fell into

obsolescence. Dell openly shared its production schedules, sales forecasts and plans for new


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products with its suppliers. This strategic closeness with supplier partners allowed Dell to

reap the benefits of vertical integration, without requiring the company to invest billions

setting up its own manufacturing operations in-house.

The following are some key lessons from the story of Dells incredible rise:

1. Enhancing customer value

Foregoing the retail route allowed Dell to simultaneously improve margins while offering

consumers a better price on their PCs. This move also gave customers a chance to configure

PCs according to their specific computing needs.

The dramatic improvement in customer value that resulted from Dells unique distribution

strategy propelled the company to a leading market position.

2. Process and operations innovation

Michael Dell recognized that the way things had always been done wasnt the best ormost efficient way to run things at his company. There are countless examples where

someone took a new look at a company process and realized that there was a much better

way to get things done.

It is always worth re-examining process-based work to see if a change could improve

efficiency. This is equally true whether youre a company of five or 500.

3. Let data do the driving

Harnessing the easily accessible sales and customer feedback data that resulted from online

sales allowed Dell to stay ahead of the demand curve in the rapidly evolving PC market.Similarly, sales and feedback data was helpful in discovering new ways to enhance customer

value in each of Dells key customer segments.

Whether your company is large or small, it is essential to keep tabs on metrics that could

reveal emerging trends, changing attitudes, and other important opportunities for your

company.

SALES TERRITORIES

Territory

Segment of the market for which a salesperson is responsible. Territory assignments may be

exclusive, meaning no other salesperson can sell in that territory, or nonexclusive.

Territories may be defined in terms of geographic or market segments, product or product

lines, size of customer or by specific target customers or prospect.


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The reason for setting up or reviewing sales territories in Dell Company ?

Increase their coverage

Control the selling expenses specially travel expenses.

Better evaluation of sales force performance

Improve customer relation.

Improve sales force effectiveness

The process of designing sale territory ?

Select control unit

Find location and potential customer

Decide basic territory

We have two type of decide basic territory ? Break down method

Build up method territory.

Dell forms its sales territories on the basis of two aspects -:

On the basis of consumer prospect

On the basis of distributors/dealers

Conclusion

We know that Dell has attempt hard to extend its market share and it has been successful interms of capturing its target and increase its sales by applying and implementing of right

decision making and in computer industry we see that it has used online selling by

customizing its customer and providing good service by using of special salespeople who

also can lead their customer on the phone to help them because they want to lure back

their customers the best factor for evaluating the dell company growth, in my point of view

is fiscal statement.

If company performance and productivity be high their profit and revenue which they can

gain is higher as a result we can say dell performance has been good and dell company has

estimated by 2011 they will increase their revenue up to 20 percent so we can conclude dell

has taken the good and right way to boost itself.


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Dell Channel Members View

The activities in the Dell distribution channel can be carried out by the marketer himself or itcan be carried out by specialist organizations. The specialist organizations and the channel

members can be categorized into two types.

Resellers

Specialty Service Firms.

Resellers are the companies which usually buy and take the ownership of the products from

the manufacturer with the intention of selling to end consumers. Dell can have one or more

than one reseller in the chain. The network or chain of resellers is known as reseller

network.

The resellers can be further classified into:

Retailers: A retailer sells the product directly to the end customer.

Wholesalers: Wholesalers buy the products from manufacturer or other wholesalers and

then they sell the products to the retailers.

Industrial Distributors: They are the ones who sell products from one business to other,

they are suppliers who buy the goods and sell it to another firm.

Specialty service firms are organizations that do not take the ownership of the products.

They also provide additional services along with the products. Specialty firms can be:

Agents and brokers: They are the firms which bring together the suppliers and buyers and

mediate the sale and they charge a fee for this kind of service.

Distribution service firms: They provide services which help with the movement of goods in

the distribution channels like transportation, processing and storage of goods and products.

Others: They are the firms which provide other services to the channels in distribution like

insurance, routing assistance etc.

Dell channel members views are as followed -:

The main key to success to Dell has been because of its two innovative practices that

is direct sales and build-to-order business model. This model is simple as a concept

but highly complex to execute, especially in the present conditions of rapid growth

and change. Dell has continually renewed and extended its business model while

striking a balance between control and edibility.


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Dell made changes in its design, manufacturing, procurement, and logistics processes

to reduce the costs, and to speed up the entire distribution system. It has expanded

into International markets and it started making notebook and server product lines

which has led to extraordinary profits for dell, and has given a great market value for

the company.

Dell is driven by rapid technological improvements in components, particularly

microprocessors, other semiconductors, and storage devices. The improved

performance of hardware has been matched historically by increased complexity of

software, creating demand for the latest hardware.

For Dell time is a critical competitive factor in the industry in two ways:-

I. Firstly, excess inventory loses value (at an estimated 10% per month andcosts money;

II. Secondly, products incorporating the most advanced technologies are in high

demand and carry a price premium.

The distribution approach of dell is very different. It assembles different technological

means such as telephone communications; internet, and call centres, local shipping

logistics to gain competitive advantage over other and at the same time provide

satisfactory service and products to the customer (Achieving Competitive Advantage

Through Sales and Distribution Strategy).

Kanban process adopted by Dell increases the efficiency of the Distribution channel.

Kanban Process is defined as "a technique for work and inventory release, is a major

component of Just in Time and Lean Manufacturing philosophy".Any alternative

components are acquired through the time of the production process by making use

of the 'Kanban' System. The suppliers of Dell deliver parts when they receive the

request or an empty transportation giving request for refill.

Apart from the company also makes use of 'integrated Kanban' process to be more

efficient, the integrated Kanban process is divided into two parts. The first part is the

transport Kanban and the other is the production Kanban and the key differencebetween both of them is the schedule, the transport Kanban works on every day

basis where components are manufactured by the suppliers based on the specific

order for that particular day. Because of made to order system at times it can be

challenging for Dell to identify or forecast the components which would be required

which justify the use of Kanban process.


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REFERENCES

www.google.com

www.Scribd.com

Sales & Distribution- Richard R. Still

Final Dell SDM

Documents