Why did Dell Inc. embark on a bold global growth initiative in 2007?

BUILDING A BILLION DOLLAR BUSINESS IN INDIA THE DELL INC. WAY

Why did Dell Inc. embark on a bold global growth initiative in 2007? In the words of Steve Felice, former president of Dell Asia-Pacific and Japan, “Our success was going to be largely dependent on our ability to expand globally.”

Dell’s global initiative focused on emerging economies in Asia, Africa, and Latin America. Compared with mature economies in North America and Western Europe, emerging economies offered significant growth potential, according to Michael Dell, Dell’s founder and chief executive officer. And Dell’s global strategy has proven successful. India is a major growth market for Dell Inc. and posts annual sales over $1.5 billion. In 2013, Dell employed some 25,000 people in India, which represented about one-fourth of its global workforce.

Dell’s global initiative was bold in its departure from prior product development practices. Prior to its global initiative, Dell designed products for global requirements and distributed the same product globally. The company now routinely designs low-cost notebook, laptop, and desktop personal computers for customers in China, India, and other emerging economies.

Dell’s global initiative also required many changes in its signature direct sales, service, and distribution strategy. The company built its U.S. business with telephone- and Internet-based sales—without retailers. However, in emerging economies and India, customers prefer to see, touch, and use a personal computer before they buy. In response, Dell uses individual sales affiliates who reach out to customers in person and give them a firsthand product experience at their doorstep.

At the same time, Dell has joined hands with Indian chain retailers such as Croma and eZone for a shop-in-a-shop counter for its products. Dell backs this hybrid retail model by offering extended onsite service (technicians who visit individuals’ homes) in over 650 cities to both retail and small business customers.

Dell also opened Dell exclusive stores in 2008. According to a company spokesperson, “The exclusive Dell store is a step towards enhancing the overall purchase experience for consumers in India. We have rapidly increased our presence in the consumer market here with new products and by expanding our reach. With the launch of Dell exclusive stores, we offer our customers the touch and feel for Dell branded products within a unique shopping experience.”

Each Dell exclusive store offers the advantages of Dell’s direct purchasing model with the additional benefit of retail availability—allowing customers to browse, touch, and feel the product. Dell’s approach makes it possible for customers to see the products on the retail shelves and then place an order for the preferred model with the choice to customize the looks and configuration of the unit. By early 2013, Dell had 60 exclusive stores in India.