Second stage: strategic transformation phase (2006-present)
As the market's changing, a direct sales model to a Dell company the advantage may turn into disadvantages. Main reasons are as follows:
1) personal consumer computer market developments
As personal consumer computer market, Dell direct mode focuses on enterprise customers, through the mass customization to realize economies of scale marketing methods are faced with challenges.
2) direct sales channel market sales ratio of decline
According to the data IT consumer products sales channel trends as shown in the diagram, direct selling is the proportion of sales channel has been from 2005 of 15% to 10% in 2009, further forecast will decline to 2011 9% of the market sales ratio.
From an it product sales trends, Dell Inc. to rely on the professional development of direct marketing model has been experiencing a bottleneck. Limited direct marketing prospects will certainly affect the Dell company market share of development, extending beyond the direct distribution channel is bound to be Dell's rapid development of choice, of course, coordination and mutual is increasing market share.
3) cultural differences in emerging markets
In emerging markets such as China, India), due to cultural differences, the consumer is more likely to be substantial and product exposure. At the same time, the network ordered awareness and computer knowledge of penetration are relatively low, so Dell in the market of a direct sales model.
Not only the market in change and Dell proud direct and efficient supply chain also gradually lose contrast advantage, an intuitive example: 1997, Dell and Hewlett-Packard computer per sale one cost $ 1000 PC, Dell's inventory cost is $ 10, and HP inventory cost is US $ 160. In 2005, Dell's inventory costs or $ 10, and Hewlett Packard cost has dropped to $ 70. With Dell's supply chain advantage, the advantages of industry competitors.
Faced with the challenges of market changes and the comparative advantage of Dell itself, Dell Inc. 2006 strategic transformation:
1) established distribution channels in the United States, Wal-Mart and Sam â notation s Club has started selling Dell computer; in China, the United States also has begun to sell Dell computer. To direct marketing, distribution and secondarily to double sales.
2) back pay attention to individual consumers
Dell Inc. began listening to the voice of the consumer and media, respond to consumer demand for product appearance. Early 2007, Dell from Motorola and Nike recruit senior designers, improving the design of human resource reserves. In the second half of 2007, Dell launched with personalized color shell notebook and monitor host machine, it is in this new strategy for the realisation of transformation.
3) are more specific market Division and brand integration
The consumer business and emerging markets, notebooks, Enterprise and SME market, is the core of the new strategy. On the product brand for restructured after consumer PC products will be fully integrated into the Inspiron brand, the original Dimension brand will gradually withdraw from the stage of history. Dell PC product brand consists of four to three, which is mainly for the enterprise market OptiPlex brand; positioning high-end gamers and PC enthusiasts XPS; and focused on the consumer market for Inspiron brand.
4) integrated marketing and brand image
By the end of 2007, Dell announced and British advertising giant WPP Group signed a three-year cooperation agreement in advertising and marketing, Dell will all advertising, direct marketing, public relations, media planning and related total and WPP. In order to meet the demand, Dell WPP will be setting up a new company, responsible for research on consumer behavior, online advertising, and the television and the quick ads are working. This is known as the "Leonardo da Vinci programme by Dell, Dell is changing to" fashion new people ".
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