"Growth down," "personnel changes", "customer satisfaction down", creating a brilliant performance after 20 years, Dell's direct sales model in the first 21 years of the third quarter was an unprecedented challenge.
From 1984 to 1000 U.S. dollars grassroots Michael Dell started the company, Dell sold directly to consumers on PC, rather than as competitors like HP and IBM through a multi-level retailers. This direct sales approach, providing support services to consumers is relatively limited, but effectively reduced PC prices. So, while Dell PC sold less than its competitors, but still won the high rate of return.
This mode achievements of the past 20 years, sustained high growth in the myth of Dell, Dell CEO Kevin Rollins has to change until the political situation has also reiterated two or three months before such a dream - Dell's business in 2008 income to exceed 80 billion U.S. dollars, per cent more than the current number of nearly 300 billion dollars.
However, Rollins's voice down, IDC latest data on the display: third quarter 2005, Dell in addition to market share in Asia outside of Japan fell 1.8 percentage points, down 7.8%. This sudden decline in growth, with Asia accounting for more than 80% of the China Business incompetent directly related to the subsequent October 25, Dell Foo Piau Phang sudden departure.
Earlier, Dell's market saturation in the United States and European markets fell, once want to see China and India emerging markets. Dell Chairman Michael Dell in April this year, an analyst at the reception, said: "China's market demand for Dell products and services is very great, but 99% of China's economic strength is reflected in large cities." Appears in the Dell, Direct Marketing is a done deal, and does not need to make any changes.
Objectively speaking, Dell entered China since the results have been achieved since it is not easy today, just a few years, turnover has increased by 300%, and entered the Chinese computer industry's top four list, which is the Foo can Chinese companies in the Dell "ruling" the reason for four years. "However, China's market is very complex, some cities are not less developed markets in Europe and America, in China's vast internal market, there have been from big cities to small towns gradient metastasis, Dell is not able to adapt to these changes. "analyst who asked not to be named to the PC," Business Week "of Dell's Chinese process, that the slowdown in growth Dell is saying too much emphasis on long-term major cities, large customers and large procurement, the actual situation in China is the first tier cities become saturated, hundreds of small cities and small towns in the PC business is booming.
Dell has been continuing concern, "Business Week" October 28th is also the author pointed out that Dell wants to continue in the Chinese PC market place, it must be pursued by the current direct sales model to adjust, at least in the short term it should be. Dell journal criticized the targeted only to sales in large enterprise and government customers, and that Dell's competitors in growing these large customers, after eating, in the "retail" and the small town market's performance is overshadowed.
China's small urban users, their spending habits is often required before the purchase can be seen the product in kind. Dell implemented the "Direct" mode can not meet the basic needs. In contrast, local manufacturers such as Lenovo and Founder way through the retail sales were achieved good results. HP executive vice president of 瀹夊埄寮楄帿灏?is to ask themselves these questions: "you can imagine, in the economically underdeveloped areas, how could be effective direct model it?"
Analysts believe that the long term, Dell's direct model may also be successful in the Asian market, but users have to wait until the second purchase boom in Asia. Judging from the recent interest, Dell may need to adjust the current market strategy. Compared with commercial users, ordinary consumers, the current emphasis on Dell's efforts not enough.
But the question is, if Dell's emphasis on consumers, then we must face the challenges direct sales model, which seems to be a paradox, because the closer to the manufacturers and consumers from the Dell model was born with such a flaw - the lack of the traditional sales model services of many channels.
In fact, Dell's experience in China and Asia are synchronized with the world. First, China's 24 provinces in the user group complaints and Dell salesman forged orders outstanding residual sound the occasion of the event, August 17, the U.S. ranked institutions ACSI customer satisfaction survey released by Dell customer satisfaction has been decreased.
Oct. 31, Dell released in the United States, "revised third-quarter earnings expectations," the announcement said the company will optimize profitability at the same time, continue to focus on higher value products and services. This was the second consecutive quarter Dell's lower earnings expectations. Wall Street's reaction was allowed to share in July this year the highest price of 42 U.S. dollars per share fell to the current 32 U.S. dollars less.
Dell is now faced with three choices: First, continue to uphold the direct sales model, waiting for China, India and other emerging markets is technically mature; Second, as companies like IBM, Dell will sell PC business to a third party; third, in the future within a few years in developing countries to build more retail stores to reach consumers. However, the more people that, at least in China, Dell's top priority is to make your computer more in retail stores.
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