Case3_Notes2

Case3_Notes2 - Whats the story of the case? Dells top...

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What’s the story of the case? Dell’s top management in China was leaving the company for its primary competitor, Lenovo because they wanted to drop the direct model and bring in retailers. The US headquarters insisted on keeping the direct model, which had worked well in urban and corporate markets but not in smaller towns and rural areas. Lenovo, on the other hand, was able to reach those markets through their low-cost strategy, aided in part by being partly owned by the Chinese government. But Dell’s direct model did not address the market’s needs, since most rural customers were not familiar enough with computers to custom order, and preferred face-to-face interactions so they could see the machine and learn more about it. They also did not have the distribution channels in place. So in 2004, Dell pulled out of the low-end PC market in China, concentrating on the higher- end market. Who are the important people? 1) David Miller & William Amelio: members of Dell top management who left for its competitor, Lenovo 2) Li Chong: an analyst with Analysys International who maintained that Dell insisted on keeping its direct model 3) Michael Dell: the founder of Dell Computer Corporation 4) Kevin Rollins: CEO of Dell who co-designed the direct model with Michael Dell 5) Mort Topfer: form President of Land Mobile Products at Motorola who joined Dell and helped it return to its direct sales model 6) Phil Kelly: President of Dell Asia Pacific who convinced management that the direct model would be successful in China 7) Xiamen municipal government: cooperated with Dell and formed a committee of six people to help them set up operations
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Case3_Notes2 - Whats the story of the case? Dells top...

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