The case discusses Dell Computer’s (Dell) initiatives to build and strengthen its presence in the Chinese Personal Computer (PC) industry. It briefly details Dell’s evolution over the years and examines the rationale for its entry into China. The case also examines the measures adopted by Dell to succeed in China and the ways in which it overcame the problems it faced while implementing its famous ‘Direct Model’ in the country. The reasons for Dell’s rapid growth in China (especially the marketing initiatives) have been discussed in detail. The case ends with a brief note on the competition faced by Dell (from players such as Legend) and its future prospects in China.

Dell's ability to capture value in the very competitive global PC business has generally been attributed to its Direct Model. A closer look at Dell, however, reveals the fact that the Direct Model is only part of the story. The origin of Dell's success can be traced to its sharp focus on `the educated PC buyer,' operationalized as large corporations and government agencies that required minimum hand-holding following a sale. The Direct Model in its various incarnations, ranging from reliance on a large salesforce comprising outside and inside sales representatives to its current form (web-based e-commerce), was developed and refined to best serve the targeted customer. A particular advantage of the build-to-order Direct Model was that Dell could deliver a customer-configured computer within a very short time while ensuring minimum risk of product obsolescence and inventory carrying costs. The presence of an excellent supply chain and logistics infrastructure was key to the successful execution of the model.

Following their initial success with the targeted group, Dell consistently improved its value proposition to this group by finer segmentation and by tailoring its offer to these segments. Dell was then able to extend its Direct Model to adjacencies such as servers.

When Dell's competitors such as IBM, Compaq and HP entered the PC business, their go-to-market model sought to leverage their existing strategic assets. Thus, IBM approached the corporate customer primarily through its salesforceone that had long established relationships with corporate IT/MIS departments. IBM and Compaq also utilized the Value added resellers (VARs), firms that could provide a range of complementary services such as installation, software selection etc., to novice customers. The success of the PC industry was due in no small measure to the "assurance" provided by IBM's brand in an emerging industry, its decision to go with an open architecture and the value-added services provided by VARs.