Dell's Problems in China

            
  
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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.



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Case Details:

Price:
Case Code : BSTR193 Electronic Format: Rs. 400;
Courier (within India):Rs. 25 Extra
Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Themes

International Business | Globalization Business
Case Length : 18 Pages
Period : 1995-2005
Organization : Dell
Pub Date : 2006
Teaching Note : Available
Countries : China
Industry : Information Technology and Related Services

Abstract:

The case discusses the problems that US based Dell Computers, a leading global manufacturer of personal computers (PCs) and other hardware systems, faced in China. Dell entered China in 1995 and was successful in capturing a considerable share of the Chinese PC market. Dell adopted its 'direct model' for selling its products in China, as it had proved to be successful in several other countries in the world. The company did well in the urban markets in China which, however, witnessed slow growth in 2004 and 2005. High growth in PC business was mainly witnessed in third and fourth tier cities where Dell was unable to successfully implement the direct model owing to low penetration of Internet and low usage of credit cards. By late 2005, Dell's market share dwindled, owning to its inability to capture the semi-urban and rural markets in China.

Issues:

» Evaluate the importance of localizing global business models to suit specific countries
» Examine the importance of growing PC markets in semi-urban and rural areas in China and develop suitable strategies to tap them

Contents:

  Page No.
Introduction 1
Background Note 2
DELL's Direct Model 4
DELL in China 5
The Problems 8
The Future 9
Exhibits 11

Keywords:

Dell Computers, Direct Model, Rural Marketing, Direct Marketing, Value Web Model, Dell in China, Gunaxi, Distribution Network

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