DELL Case Study

Table of Contents

INTRODUCTION 1

A . Background to Dell , Inc 1

B . Dell 's Direct Model 1

CHAPTER 1 Dell 's Direct Model Magic

A . Effectiveness of Direct Model 1

B . Beyond the Traditional Supply Chain Model 2

C . Dell 's Competitors 2

D . Tricks of Global Expansion , especially to China 3

CHAPTER 2 . Dell 's Market 3

Segmenting the Market 4

Transactional Customers 4

CHAPTER 3 Dell and Amazon 5

Similarities between Dell and Amazon 5

Differences between Dell and Amazon 6

CHAPTER 4

Avoiding Common Problems 6

CONCLUSION 7

Dell Computer Company began in 1984 when its creator , Michael Dell , was still a student at the University of Texas . He began by selling upgrades for IBM compatible devices and the next year began to sell his own brand of computer . Dell has always operated on the direct sales model , first by phone and now by internet . By 1999 Dell was the top ranked computer company in the United States and ranked second in the international markets . Its closet competitors , Hewlett-Packard and Compaq are still behind Dell 's high rankings in a variety of areas (Kraemer and Dedrich , 2001

Even thought the direct model approach to selling is not new , Dell has taken the practice to new profit levels . He was the first computer manufacturer to employ this sales model . From there , particularly with the internet , he expanded upon this build to process to elevate his company to the top (Lawton and Michaels , 2001 . In 2005 , Dell , Inc was named Fortune Magazine 's Most Admired Company as it achieved the number one ranking among the Fortune 500 Companies (Dell 's View , 2006 So many strategies go into Dell 's success story . An intensive look into the company itself is necessary to analyze these advantages

Dell is particularly effective in its execution of the direct model approach to selling . The direct model approach represents a type of strategy in which the customer buys directly from the company , not through a distributor or a retailer . Dell 's key capabilities here are their direct line to customers without any intermediaries , its single point of accountability model and its policy of building to without conflicts created by retailing channels (Kraemer and Dedrick 2001 . If a problem occurs , Dell can instantly find and correct it without having to deal with representatives from the distributor or the retailer . The customer , as a result , gets more value for less cost and less confusion because there is nobody in the middle to tell conflicting stories or to be paid by Dell (Direct Model , 2006 . Each computer is built specifically for each customer , so the customer gets exactly what he wants . The company boasts several interchangeable parts which means that a huge number of possible configurations is possible . This build-to- approach also allows customers to get the best price possible (Direct Model , 2006

In seeking to give the best value to its customers , Dell goes beyond the traditional supply chain model . Generally , the supply chain for...