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GroupNo.07_NPD7.pptx

  1. 1. PRODUCT DEVELOPMENT AT DELL COMPUTER CORPORATION GROUP 7
  2. 2. About DELL computer corporation Background Michael Dell founded Dell in 1983 by updating IBM-compatible computers with cutting-edge peripheral and CPU technology at a reasonable cost. Mr. Dell dropped out of school at the conclusion of the year to pursue his local company. He sold $180,000 in personal computers in the first month.High growth rates and excellent margins fueled internal expansion, allowing the company to handle orders of up to a hundred computers at a time.In 1985, he achieved $6 million in sales and established his own brand of personal computers. Business Model Getting rid of middlemen - offering personalised products to clients directly through mailDirect marketing employs both home-based and field-based telephone agents.Extensive pre-testing-customized configuration details demanded by clients are ensured, and quality checks are performed at multiple lines during the assembly line production process.A 24- hour telephone tech support service capable of diagnosing and resolving 90% of customer problems.Maintains a month's supply of components to assure timely delivery.
  3. 3. Personal Computer Industry ● Charles Babbage created the first digital computer in the 1830s. ● The microcomputer revolution began in the 1970s, resulting in smaller computers.An electronic magazine advertised a printed circuit board in July 1974. ● Following the introduction of computers such as the Mark 8 Computer, the market for smaller computers developed. ● Apple Computer, a California-based company, successfully popularised an intuitively simple-to-use interface in the late 1970s and early 1980s. ● Apple's engineers set the technological pace by packing as much new technology as possible into their devices. ● Only a few major companies, including as Texas Instruments and Zenith, first joined the commercial portion of the microcomputer industry.
  4. 4. Portable Computer Industry In 1981, Osborne released the first portable computer. The majority of them weighed more than 20 pounds and were referred to as luggables Gross margins: 3% to 5% higher than desktops because of their mobility. Many firms started entering the market indicating that growth was expected Portable computer development was based on a number of technological advances, including: flat liquid crystal display screens developed in Japan that required significantly less space than conventional cathode ray tubes, energy-efficient compact hard drive discs, and improved battery technology that allowed for more than an hour of operation before requiring recharging. Portables required less hardware customization than desktops. Laptops, on the other hand, frequently had more feature differentiation than desktops In 1993, portables were classified as laptops if they weighed between 4.5 and 8 pounds, sub- notebooks if they weighed under 4 pounds.
  5. 5. Product development at Dell ● Planning phase: thorough business case for the product. ● Profile phase: two to three page product features guide where product and market definition are given. It assures that the product developer paid adequate attention to commercial concerns. ● Product development planned, produced, and tested working prototypes of the proposed product throughout the implementation phase. ● The prototypes are delivered to key clients for input throughout the qualification phase. ● Launch Phase: At the end of this phase, production is scaled up and early customer shipments are made. ● Acceptance phase: Gathering user input on the product for up to three months following its release.
  6. 6. Early Setback ● Dell released their first portable computer series in 1991. ● When portables accounted for 17% of Dell's sales in 1992, reports arose concerning quality issues ranging from defective battery packs to unreliable displays to frequent power outages to broken hinges. ● Dell discontinued a new line of laptops under development in early 1993, in what was shaping up to be the company's annus horribilis, since they were regarded too sluggish and pricey. ● Following a write-off of $20 million in associated charges, the portables division was reorganised.According to one Dell insider, the company's portable division suffered from "severe underinvestment" and a "shrunken desktop attitude.“ ● Meanwhile, competitors reported excellent portable sales. Dell went on to report a second-quarter loss of $75.7 million.
  7. 7. • Maintain a tried-and-true battery technology (NiHi). Use the latest battery technology (LiOn)Postpone your commitment to either battery technology. The team "overdesigned" the battery compartment and the remainder of the device.Adopt a "dual path" strategy in which two distinct products are produced independently. Which Battery?
  8. 8. The October Meeting Suggestions for discussion: If you can't afford the risk of delivering one bad product after another, stick with NiHi. LiOn is required to provide value to the full line. Need for new technology to increase market share -> Include LiOnWorst case scenario, if LiOn does not function, we will revert to NiHi and lose some internal space -> Postpone the decision.Dell has a strong commitment culture, and postponing decisions will not help. LiOn is a cool technology -> Choose LiOn. Solution: The LiOn should be used by the firm. Reason: The PC market is fast-paced; if we make a mistake, it would be difficult to recover. More in favour of LiOn If the first attempt fails, there is an option.
  9. 9. Dell Computer Stumbles ● Dell's success spawned imitators such as Gateway 2000 and CompuAdd in 1990, which benefited from minimal overhead through mail order sales. ● IBM and Compaq both announced intentions to join the direct mail order sector. Compaq triggered a pricing war by proposing a 30% price increase. ● As competition increased, Dell attempted to enter the retail industry in order to gain small consumers. ● Dell was caught off guard by the quick speed.In 1993, after 14 straight quarters of growing profitability.
  10. 10. Thankyou !

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