Case: Dell Computers (A): Field Service for Corporate Clients [HBS 9-603-067] 1. What are the key challenges DELL should be concerned with as it enters the large scale server market?
Support service in server market is more critical than in personal computer market, especially when the server is a large scale one, since a problem in server even for a short time could cause serious problem in the customer’s business. Having realized the importance, competitors such as Hewlett-Packard and IBM reduced their response time to enhance the quality of their support service. Dell also is extraordinarily committed to high-quality service, they proposed the response time as short as four hours. In order to accomplish their guaranteed lead time in highly volatile situation, Dell has two big challenges. (1) They should train number of technicians for a high cost. Support service for servers cannot be mainly depended on call center or service website as Dell did for personal computers. (2) They have to keep their inventory higher than desired in their operating philosophy where they believed there is an inverse correlation between the amount of inventory and the quality of information.
2. Should DELL outsource the four hour service level support or should DELL provide the service with in-house resources? Why or Why not?
Dell should provide the service with in-house resource if they are to “win” in the server market because it has been successful in personal computer market with the strategy of “Dell direct model”. The computer manufacturer’s strength in personal computer market was to deliver high quality products and services tailored to meet customers’ needs. Potential corporate customers will consider purchasing Dell’s server expecting the same thing for servers. Just like Kapoor was wondering, the customers will not buy their servers, if the quality of Dell’s products and services were worse than its competitors’. If Dell outsources the support...
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