Dell's Rebooted Asian Strategy

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"That's an example of how a distributor or retailer will not need to carry much inventory, but is still able to leverage our supply chain model," he said. "They can have bigger profit margins, split between them and Dell, and consumers also have more choice."

Ferrand declined to elaborate on such revenue-sharing models because the company is still working out the details behind their retail sales strategy for the region.

According to Gartner's Chakraborti, rather than simply take the reseller route in the Asia-Pacific, the company should focus on establishing alliances with large retail chains similar to its partnership with Wal-Mart in the United States.

What Dell must do

Chakraborti said Dell should also consider zooming in on its competition with Lenovo in countries outside the latter's stronghold in China, especially since Lenovo is currently "also a bit shaky". "India would be an ideal launch pad," Chakraborti said.

He suggested that Dell needs to activate a strategy to enter smaller cities in India, as well as China, and expand its AMD-based portfolio to penetrate these smaller towns.

He added the company does not need to abdicate its direct model, which it is "still a master at", as it can help Dell reach smaller towns in countries such as India and China, as well as enhance its visibility and trust among consumers.

IDC's Ma said: "It's not just about having a presence in channels, it's also about building the brand. Dell's brand isn't weak but it needs to convey the message that it's hip and an attractive brand.

"Marketing to consumers isn't the same as to enterprises, which don't usually want change whereas consumers want something that shows their status and [ability] to look cool," he said.

Dell needs to be perceived not as a clunky enterprise box maker, but one that produces products that are hip, Ma said, adding that its latest Inspiron notebook series—available in multiple colors—shows some efforts in moving toward this direction.

Chakraborti added that growing a services division that is as strong as IBM's and HP's will also add to Dell's overall margins.

According to Ferrand, services will indeed be a significant part of the company's growth strategy.

In fact, Dell currently operates a US$6 billion services business and the company believes it can outplay the likes of HP and IBM, he said.

"There's immense opportunity for us to grow, around the box, around client management as well as the IT architecture," he added. "It's a huge business and it's the fastest-growing division in Dell."

The company clocks 38 million technical calls a year, has 55 million systems under warranty, and hires 12,000 service personnel worldwide, Ferrand said.

"It's a massive organization, but we think we can do more," he noted. He added that Dell wants to establish a stronger link between its products and services business, allowing for service offerings such as Dell Connect, to be extended "beyond the box" of its SMB PC customers.

Provided by ZDNet Asia—Where Technology Means Business