Dell in China: The Strategic Rethinking
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Code : BSM0017
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Region : China
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Introduction:Dell, the world’s largest computer vendor, offers network servers, workstations, storage systems, and ethernet switches for enterprising customers in addition to desktops and notebook PCs for individual consumers. The company also sells handheld computers andmarkets third-party software and peripherals. Dell, with revenues of $41 billion in fiscal year 2004, generates about 80%of its sales fromdesktop and notebook PCs. Dell operates in 13 Asia Pacificmarkets,with plants in China andMalaysia, and had sales of $4,346 million in that region in fiscal year 2004 . The company started focussing on China since 1998.With a population of 1.3 billion, the number of PCs sold in China in 2003 reached 22million (second after US) . About 40%of the world’s computers were made inChina. Dell's share of the PC market in China rose from less than 1%in 1998 to 7.4%in 2004. But the local PC vendors like Legend and Founder in China, began to give stiff competition to Dell in pricing. Due to this, Dell decided to change its strategy by withdrawing from the consumer market and to focus on servers and other high end products. |
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