In late 2006, Dell lost its lead in the PC business to Hewlett-Packard globally . Last year, it slipped further, to No. 3, as Acer barged into the No. 2 spot.
Surprisingly, in India, roughly during the same period , Dell was moving precisely in the opposite direction . It went steadily up the ranks and became the biggest seller of laptops in the second quarter of this year. In the third quarter, it also became the biggest seller of desktops in India, toppling HP from the spot it had retained for five years.
The fact that this happened in a relatively short period, and against competition that also includes aggressive Asian players such as Lenovo and Acer and Indian players like HCL, makes Dell India's achievement all the more creditable . This, combined with the $53-billion company's previous record of establishing a successful global customer service and support division in the country, has raised Dell's ambitions in India. The company now wants to challenge the likes of IBM, HP and the Indian IT majors in the services and solutions space.
To that end, Ganesh Lakshminarayanan, who helped create Dell International Services a decade ago and who now heads the global consumer, small and medium business (CSMB) services for Dell, has just been given an additional role—that of president, Dell India. It's a new position for the company, and the 42-year-old Lakshminarayanan will have the responsibility of leveraging all its divisions—manufacturing , sales, contact centre, analytics , managed services, R&D , IT, and back-office processing—to offer complete solutions to Indian enterprises , not just PCs and servers.
Lakshminarayanan, a US citizen but born and brought up in India, can speak good Tamil and a bit of Malayalam as his "parents are from Kerala".
Last week, when we met Lakshminarayanan soon after he took on the new role, he was excited. "India is at the top of Dell's strategic geographies. If there is a time to be in India, it is now, and if there is a place to be at Dell, I would say India is that place," he said. India, he said, is called the engine of Dell's global growth, and noted that 23,000 of Dell's global employee base of 96,000 or its every fourth employee is now based in India, and every arm of the company is represented in the country.
Since the news about Dell becoming No. 1 in PCs in India is still fresh, we decided to begin with that. He attributed the success to, more than anything else, Dell's talent in India. "The first is we built a phenomenal team. People underestimate the talent we have built over the last five years," he says.
He refers in particular to Mahesh Bhalla, the head of the CSMB business in India; Sameer Garde, GM of Dell's global OEM solutions segment ; and Ravi Bharadwaj, responsible for sales of software & peripherals and after point-of-sale products in the Asia-Pacific region.
"All these guys that we hired in the first phase of our operations in customer service, they went on to lead market facing divisions in India, and are now in global or regional roles. So we are a local Indian brand, building the local India market. Companies often bring in expats, external leadership teams. But we have no expat, other than me, and people don't consider me an expat," says Lakshminarayanan.
Investing in a manufacturing plant is seen to be the second big reason for the company's success in the PC segment. Dell invested close to $30 million in its Chennai plant. Today, it produces around a million units a year. That has helped bring costs down significantly. "It also enabled us to cut our cycle time by half."
The innovations in the distribution Ram network were another differentiator . Dell is globally known for its direct business model, under which it bypassed traditional distribution channels and sold personal computers (PCs) directly to customers. This helped the company save on costs like reseller margins and high inventories. It also helped in giving customers customized products.
That model worked well in selling to the Indian corporate sector. But from 2008, when it started focusing on the Indian consumer and SMB (small and medium business) markets, Dell recognized that the Indian consumer , unlike the one in mature markets, was wary of buying online. So the company began several new initiatives . It launched retail stores and introduced a direct model within retail, which allowed you to walk into a store and configure your PC. You see only a red laptop there but want a blue one, you could get it the way you did through Dell Direct.
"Consumers often want to see and touch, but after that they want to have the experience of configuring it to their requirement. And within 5-7 days, it is delivered to them. Others don't have a supply chain that allows them to do the kind of direct model we do," says Lakshminarayanan.
Dell also found that people in tier II and III towns are often intimidated by large companies and that they prefer to buy from channel partners. So it abandoned its traditional strategy of avoiding channel partners and embraced them.
TOI
