Dell Spells Success in China

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Case Details:

Case Code : BSTR066
Case Length : 15 Pages
Period : 2003
Organization : Dell
Pub Date : 2003
Teaching Note :Not Available
Countries : USA, China
Industry : PC

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"Dell's customer benefits of direct, personalized relationships, a single point of accountability, cost leadership and better value are particularly relevant to customers in China looking to maximize their IT investments. Many see 'direct' as the preferred way of doing business once they've experienced it."1

- Foo Piau Phang, Managing Director (Dell China), in July 04, 2002.

Winning Praises in China

In June 2003, Dell Computer Inc (Dell), the US-based computer software and hardware solutions provider, emerged the winner in the '2003 Customer Satisfaction Review of Major Brands in Various Industries of China,' for the performance quality of its desktops.

The review was jointly organized by The Chinese Association for Quality, and the Tsinghua University Chinese Enterprise Research Center. This was the first exercise of its kind in China. The Tsinghua University had developed a 'China's Customer Satisfaction Evaluation System' under the guidance of the State Bureau of Quality and Technical Supervision. The model had received the approval of the Chinese Ministry of Science and Technology. The review covered five different categories of products: television sets, refrigerators, kitchen fans, microwave ovens and desktops. It was carried out in 50 major Chinese cities and the brands were evaluated on parameters such as brand image, value experience, quality experience, expected quality, loyalty and customer satisfaction through a telephonic survey.

Dell was ranked first among desktops on parameters such as brand image, quality, and customer satisfaction. Commenting on the recognition it received, Foo Piau Phang, Managing Director of Dell's Chinese Division, said, "The results of the customer satisfaction index survey objectively and impartially reflect the trust and recognition of Chinese customers for Dell products."2

While this recognition was a matter of delight for Dell, it came as a surprise to critics and company watchers. Back in 1998, when Dell had first introduced its legendary 'Direct Model' in China, its detractors had claimed that the company would not be able to replicate its global success in China. However, in the next five years, Dell's focus on customers and incremental growth helped it become the leading foreign player with a 5.8% market share in China, leaving behind players like IBM and HP-Compaq (Refer Exhibit I for a note on Dell's competitors). More significantly, many analysts believed that in the near future, Dell would pose stiff competition to the market leader, Legend, a domestic player.

Dell Spells Success in China - Next Page>>

1], July 04, 2002.

2] 'Taking Lead in Brand Image, Quality Experience and Satisfaction Index,', June 19, 2003.


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