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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Tim Luke who wrote (10378)	1/29/1999 12:26:00 AM
From: Junkyardawg	Read Replies (1) \| Respond to of 90042

Remember all: After you go to my guestbook scan down until it says tim's pick then you will see it. You may have scan down through some post to see it. I hope it will not be long till we will have a much better place to do this:-) smiles dawg

To: Tim Luke who wrote (10378)	1/29/1999 12:31:00 AM
From: puborectalis	Respond to of 90042

Direct Dell: A Winning Strategy in Asia January 26, 1999 3:24 AM PST By Lucy Weldon Special to worldlyinvestor.com Although most know about Dell Computer's (quote, chart, profile) runaway success in the US, the computer company is enjoying phenomenal success in Asia, too, despite the region's economic woes. Dell has redefined the computer industry rules on how to sell a personal computer. It has pioneered what the company describes as its direct business model. And this is how Dell operates around the world - direct selling over the telephone and Internet. In addition, it does provide corporate customers with account managers with whom they can meet. It's the Internet in particular, which is the signpost for the future as far as Dell is concerned. Dell has the company goal of achieving 50% of sales online by the year 2000. At the moment, it generates about 15% to 20% of total revenue from Internet sales. To get to the 50% target, it has invested and revamped its current Web site to make it more user-friendly. In Asia, Dell has direct sales established in 12 countries. Its direct business model has few cultural and language barriers with 16 country specific Web sites in Asia, which can use Chinese, English, Thai, Korean or Japanese. Asia generates about 6% to 7% of total revenues. In 1996, Dell opened its Asia-Pacific Customer Center (APCC) in Penang, Malaysia. From there it manufactures and sells desktop and notebook computers, workstations and network servers and ships them to customers throughout Asia except China. From APCC, it also provides local language technical and sales support throughout the region including Japan. Like many multinationals, business eyes are fixed on the market place in China. Dell has recognized its strategic importance as potentially being one of the largest PC market places in the world. International Data Corp (IDC) have estimated that China's compound annual growth rate in personal computers is 28.5% over the next five years. Not surprisingly, Dell describes China as "critically important" and has established its second important site in Asia in the coastal city of Xiamen. Dell's China Customer Center (CCC) is wholly dedicated to the China market. It offers direct sales and technical support operations in nine major metropolitan areas. It is the only market where Dell has compromised its direct business model and has a parallel authorized distributors program in other provincial markets. These are people that customers can get in touch with locally. Currently, Australia, China and Japan are Dell's fastest growing markets. And, Dell appears confident about the competition. Says Judy Low, spokesperson of Dell Corporation Singapore, "A number of the US competitors like IBM (quote, chart, profile) , Compaq (quote, chart, profile) and Hewlett-Packard (quote, chart, profile) have talked about going direct in Asia. But there's no evidence of it yet. Only Gateway (quote, chart, profile), a smaller competitor, is a direct supplier in some parts of Asia. "We think that the big providers who use physical outlets will have difficulty introducing another type of sales and marketing channel such as our direct channel because it looks too much like a conflict." The Internet Is the Future Dell has catapulted up the market capitalization league table thanks to a share price that over twelve months has soared more than 250%. And analysts think there is more to go with recommendations to hold and even buy more. With a market cap of around US$107 billion, it has shot past competitors like Compaq, Hewlett-Packard and puts Sun Microsystems (quote, chart, profile) well into shadow. Only IBM is ahead - standing at $182 billion. Chief Executive Officer Michael Dell is sure about two things: firstly, to stay focussed on the customer and the customer's needs and secondly the Internet. "The Internet holds great promise for us to enhance efficiencies as we ultimately move toward a goal of virtual integration with our customers and suppliers," he says. Lucy Weldon is a journalist based in Kuala Lumpur, Malaysia. She is the author of Private Banking - a Global Perspective.