Sunday, March 3, 2013

Neighbour’s envy, owner’s ‘Dell’ight!

As a report indicates, Dell has moved from being just about an also ran to a leading position in the Indian PC space; and an internecine tussle with HP for the top slot is now in order. B&E analyses the current and future dynamics of this competition. by Virat Bahri

All it takes is one leak of a report and all guns come out blazing; more so when it’s a question of the Indian PC market. For the quarter ending June, after five years of unrivalled domination in the Indian PC market, HP has actually been upstaged; by its very own compatriot from the US – Dell Computers!

Reportedly, Dell in India cumulatively sold 353,000 PCs in India for the Apr-June 2010 quarter compared to 331,000 for HP. As per figures from another IMRB ITOPS study for H2 2009-10 (Sep 09-March 10), Dell had a market share of only 13.2% compared to 17.2% for HP-Compaq. Seen together, it’s clear that Dell’s first quarter lead has taken everybody by surprise. Strangely, while Dell was not willing to comment to B&E, HP was decently acquiescent while sharing with B&E in their defence of the current situation (read HP’s Sunil Dutt’s interview after this article; HP still maintains its global lead in PC shipments,). While a quarterly statistic just reveals the iceberg’s tip, developments leading to this coupé of sorts do portend exciting transformations in the landscape.

There was little that one could expect from Dell in India initially. One of the favourite case discussions in b-schools had been how Dell’s largely ‘American’ direct marketing model was so out of synch here. For starters, one could easily point out to the ‘touch and feel’ approach of Indians towards buying, more so with technology intensive products like computers (compared to Dell’s pervasively online sales approach; successful in the US). Secondly, when you look at the vast and tough Indian terrain beyond SEC A, it looked even more daunting sans a channel-driven model. But interestingly, the ‘heartbreaking’ shift for Dell happened in US itself, when the company was going through difficult times a few years back. Analysts and practitioners alike questioned the relevance of Dell’s (over?)reliance on direct selling. Even academicians (like Sunil Chopra, Senior Associate Dean, Kellog’s School of Management) had pointed out that the maturing of the PC industry had made exclusive direct selling obsolete, even in the developed world; and more so due to the typical aspect of deliveries being delayed (relatively, that is). Dell was advised incessantly to adopt a dual channel strategy to cater to both types of customers – those who wanted to purchase offline versus those who preferred online purchases (In markets like India for example, customising product configurations – or at least giving the consumer such a perception – was expected to work brilliantly). Dell clearly was not the favourite for Indian customers a few years back. Then where did the change occur?


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.


 
Posted by at
Labels: , , , , , , , , , , ,