DELL France

1. DELL France Best in France Case Study January 2005 - March 2005 By: Marie Ledru, Rachid Dray, Benjamin Hakoun and Pierre-Emmanuel Pegues

2. Dell: corporate profile • Dell computer corporation was grounded in 1984 by the 19 year-old Michael Dell • The world leader in computer manufacturing (since 2001) and data processing solutions • 50000 employees around the world, including 1350 in France (coming from 30 countries) • An annual turnover of 50 billion $ in 2003 • A market share of 16,4% in 2004, 31 million computers sold • And almost: a specific business model

3. A brief overview • 1984: Dell is grounded in Texas • 1989: The company comes to France (Paris, currently 350 employees) • 1992: Setting up in Montpellier (call center, currently 1000 employees) • 2003: Setting up of a new call center in Casablanca, Morocco • 2003-2005: the target is to double the turnover

4. Why Dell came to France • A predominant market in Europe for 15 years • A “stategic market” for Dell for 2 years • A strategic platform for South Europa, especially Italy and Spain • But no plant…

5. DELL’s core values • DELL’s values are the result of its success story based on the entrepreneurial personality of Michael Dell • A post start-up spirit: a top-down organization with plenty of room for creativity and innovation • The importance of execution • Transparency and constant performance assessment: an obsession • Closeness of management to their teams: 1 manager for only 10 employees • Outstanding competitiveness

6. DELL’s challenge: to instill these values in the French unit • Child care unit in Montpellier: a way to demonstrate the long-term commitment of DELL to the French market • Recruiting of adequate staff, in particular • people with international profiles (middle and top management) and • through the setting up of DELL’s first sales school in Europe

7. DELL’s challenge: to instill these values in the French unit • The constitency of DELL’s policy is a crucial asset to help instill its US-flavoured values in France • The revision of the agreement « les 35 heures » • Cost containment and investment optimization as a daily battle at DELL • Work trips of managers • Close scrutiny of the ROI of advertising…

8. DELL’s products • DELL does not produce its computers in France and rumors about France being chosen as he location for the second assembly plant to be set up were denied by one of our interviewee (confidential). • France is one of DELL’s strategic market: the firm could not do without being in France, contrary to Spain and Italy • DELL’s location • Paris • Montpellier • …Casablanca

9. DELL’s products • Hardware, software and peripherals • Desktop • Workstation • Notebook • Servers, storage and networking • Software and peripherals… • Business services: solutions • Outrageous deals !

10. DELL's clients • DELL targets 3 market segments • Small and medium size businesses • Large firms => access to a dedicated private webpage, personalized advice, cost efficiency • Private customers: the best computer at the lowest price • A French presence is an essential condition to access a French speaking workforce, offer a tailored service and be close to clients to deliver real value.

11. Human Resource Policy in Dell France • A special kind of recruitment • A specific sales school. • The Comp&Ben System • The French workers always have to be reassured with long-term projects • Child care unit in Montpellier • International transfers • The board of the Montpellier site is composed of Anglo-Saxons. • In Dell, there is a high mobility of talents.

12. Constraints in France • The Dell’s distribution model require a high sense of work • The revision of the agreement « les 35 heures » highlights the will to keep the investment margin, as the work productivity of the Montpellier unit is too low according to the managers. • Cost of work ( social security and contributions , tax level…) • The traditional problem of the trade unions • No strikes, but tense negociations with trade unions when the opening of the Casablanca unit was announced. • The mentality of the French Workforce • Qualities required to work for Dell : adaptability, flexibility, evolution, mobility, creativity. • Transparency: the performance of each worker has to be estimated. • These constraints are a real hurdle to settle in France • A new plant is needed for the European market but France won’t be chosen. • Dell set up its EMEA headquarters in London…

13. Key Benefit Numbers • What are the key benefits of being in France? • A high quality of life: very important for the establishment of foreign managers • Location benefits ( Montpellier: easy access and equal distance between Paris, Italy, Spain) and a quite cheap real estate market • Government assistance: subsidaries, tax credit • High quality of Infrastructures: airport, road, communication network • A high qualified pool of competences (both technical and commercial) The establishment in France answers 2 logics: • A logic of market: France is a dominating market in Europe with worlwide firms (Accor, Axa…) • France constitutes a European platform especially for the markets of the South (Italy, Spain, Portugal, Greece).

14. Essential Advice… • Dell has a unique business model based on the need to be close to customers. Its competitive advantage is based on the distribution. By the way it’s hard to set up rules and solutions from our case study Dell = Outlier

15. We thank • The Dell company, and especially • Mr. Patrick Thill, HR manager for France and top manager in charge of Montpellier’s operations • Miss Audrey Caillaud, HR assistant • Mr. Franck Penot Senior Marketing Manager

16. Our team Rachid Dray rachid.dray@mailhec.net Benjamin Hakoun benjamin.hakoun@mailhec.net Marie Ledru marie.ledru@mailhec.net Pierre-Emmanuel Pegues pierre-emmanuel.pegues@mailhec.net