This case study primarily initiates a debate on the prospects of Dell Computers' differentiation strategies in targeting Indian Small and Medium Business (SMB) segment. As a part of its growth initiative, Dell has targeted the SMB segment, armed with clear positioning, differentiation strategies and a huge global advertising budget of $4.5 bn. Will this Indian experiment, considered a big gamble, pay-off? Would Dell achieve its desired success?

With the meltdown of global financial markets, Personal Computer (PC) makers are anticipating softening demand around the world and increasing their focus to penetrate potential growth markets in developing economies. In sync with the global phenomena, the world's second-biggest computer maker, Dell Computers (Dell) has changed its business strategies by adopting a retail model and entering into other segments of business, particularly focusing on Small and Medium Business (SMB) segment in India. Though Dell is cornering 22% of the market share in large enterprise segment, it lags well behind its rivals in the SMB segment, with a market share of just 3% in India.

In terms of PC usage, India is the 13^th largest country, with a market potential of 8 million SMBs and 12-13% of Indian SMBs use technology in their business operations. Dell's most flaunted direct business model in developed countries enabled it to pass the benefits of cost savings to consumers. But the marketing conditions of developing countries are entirely different compared with those of the developed economies. Growing demand from government, education, banking, SMB and consumer segments led Dell to change its strategies from direct business model to retail model to test the untapped Indian PC markets.

Dell's market share of Indian PC shipments rose to 7.6% in the first quarter of 2008 from 3.1% in 2005, snatching a volume of customers from HCL Technologies Limited and other competitors. Despite being a late entrant in the Indian PC market, Dell is confident of creating a niche in the market by customizing the product and adopting best marketing strategies. Its core corporate strategy to pass the benefits of savings to customers resulted, either due to a reduction in component pricing, or structural costs which has been an added advantage to maintain an edge over its rivals. Dell's shift from large corporates to SMB and other consumer segments in India is a strategic move to enter areas of untapped potential markets. How would Dell's revamped marketing strategies help the company in the Indian SMB markets?

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