Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Term Paper:
Because of this, in less than two decades, Dell became the number-one retailer of personal computers. Michael Dell still remains wary of having extra parts building up in a warehouse that should handle items built and ready to ship ("A Revolution of One," 2001). That inventory obsession continues to reduce Dell's inventory while increasing the profit on cost of goods sold.
Dell's concept of direct marketing is a critical key to success. Most computer companies sell their products to retailers, who sell them on to customers. This indirect distribution process obviously adds cost since there is profit needed for the manufactured, shipping costs, store sales and inventory costs, and associate taxes. Dell's model eliminates this through direct selling. Furthermore, this approach brings a number of other critical business advantages. By dealing directly with its customers, Dell is able to more accurately judge consumer trends and react quicker to market changes, style issues, memory needs -- and a true snapshot of demographic market research. This also ensures greater customer satisfaction and experience. Dell also collects the views and needs of thousands of consumers, whether they purchase or not, and gains a greater (and deeper) understanding of individual consumer requirements.
Figure 1 -- Overview of Dell Financial Performance, 2009-2011
In essence, each computer is built to order with the features each individual wants -- a true customized experience. This is highly personalized, one individual may want more features for gaming, the other graphics, and the other internet speed -- Dell ensures that each product is built so that the end user "feels" better about their Dell experience. For Dell, the model is on a just-in-time (JIT), build-to-order (BTO) basis. Therefore, if a new technology emerges it can be included in the product immediately, simply by adding that option to the order screen. In addition, changes in chip pricing can be more accurately reflected and increase margins for Dell. The JIT/BTO approach also means that Dell does not have to keep stocks of components or ready-made computers, increasing inventory costs, lack of price elasticity, and waste. Dell has chosen to pass these savings on to the consumer, which in tandem with the customized experience increases both volume and customer loyalty. In the Dell Direct Model, the customer is the beginning and end of the process. As a result, Dell can deliver high quality computers to satisfied customers at the best possible prices. Furthermore, Dell can do this all over the world. Thus, for Dell, the five basic tenets to their paradigm are:
Find the Most Efficient Path to the Customer
Provide a Single Point of Accountability
Build to Order (eliminate large inventory)
Be the Low-Cost-Leader (while still retaining quality)
Be the Industry Standard and Adapt to Changing Technology
Conclusions and Paradigm Shifting -- We have established that the Dell model has been successful because it allows for fiscal dollars to be used in other ways than inventory. Dell has not been stuck with brick and mortar in the United States and EU, but we have seen some erosion in Dell's profits over the last few years. Now, analysts are asking Dell to consider shifting its paradigm by offering certain product lines through Sam's Club and Wall-Mart, and placing its products in large retailers in China and other Asian countries. And, it a complete industry surprise, the increasing maturity of the Dell model necessitates moving into more brick and mortar stores in Russia, Eastern Europe, and the developing world (Chopra, 2007). Globalism and the combination of decreasing prices for desktops and increasing needs within the developing world will, in fact, continue to change Dell's paradigm if they are to survive.
Revolution of One. (April 14, 2001). The Economist Retrieved from:
Dell -- Fortune 20 Most Profitable Tech Companies. (2008). Fortune Magazine.
Dell's Cloudy Future. (November 29, 2007). Fortune Magazine. Retrieved from::
Chopra, S. (2007). A New Channel Strategy for Dell. Kellog Insight -- Focus on Research. Retrieved from:
Davidson, W.H. (2003). Breakthrough: How Great Companies Set Outrageous
Objectives and Achieve Them. New York: Wiley.
Dell, Michael and Catherine Fredman. (2006). Direct from Dell: Strategies that
Revolutionized an Industry. Collins Business.
Holzner, S. (2005). How Dell Does It. New York: McGraw-Hill.[continue]
"Dell Computers Incorporated Is A" (2011, December 05) Retrieved October 23, 2016, from http://www.paperdue.com/essay/dell-computers-incorporated-is-a-48196
"Dell Computers Incorporated Is A" 05 December 2011. Web.23 October. 2016. <http://www.paperdue.com/essay/dell-computers-incorporated-is-a-48196>
"Dell Computers Incorporated Is A", 05 December 2011, Accessed.23 October. 2016, http://www.paperdue.com/essay/dell-computers-incorporated-is-a-48196
Dell Computers Incorporated is a global technological corporation that develops, manufactures, sells, and supports personal computers and computer and electronic-based devices. Dell was indeed the first company in the IT sector to ordain that no computer should be built without first being sold in advance. This also ensures that Dell holds no extra surpluses. The stock in the company does not stick at a place for a long time. Dell
(Microsoft Solutions) Constraints to Success Achievement As mentioned earlier, Dell Computers was just another second-tire personal computer maker in the early months of the year 1994, and like all other PC makers, it had to order all the components in advance, and therefore had a large inventory of components. Then Michael Dell decide to implement his brand new business model, wherein the initial process by which he would use a build
Dell Computer Corporation Expansion Overseas In the past ten years, foreign expansion has become a major part of the business community. Many companies are seeking to expand globally in an attempt to maximize profits. This research paper will explore the foreign expansion of the Dell Computer Corporation. We will explore the ways in which this relatively young company has expanded overseas. We will examine the history of the company, the industry
e-Business Models of Dell Computer and Gateway The e-business models of high tech manufacturers that combine quoting, pricing, and product configuration systems with production, Enterprise Resource Planning (ERP), and fulfillment systems exemplify how advanced multichannel selling has progressed over the Internet. The intent of this analysis is to evaluate Dell and Gateway's e-business models, as each have real-time integration of their customer facing quoting, pricing and product configuration systems with
[...] transaction customers, which represent 30% of U.S. sales, are small and medium size enterprises (about 20%) and home office customers and consumers" (Kraemer, Dedrick and Yamashiro, 2000) Built-to-Order Production The built-to-order production strategy was implemented to the great success of Dell Computer Corporation as it aided it differentiate itself from competing PC manufacturers. It ensured customers of the highest levels of interest in satisfying their needs and it as such
Dell business model and strategy is one of the best strategies that can be employed by various organizations for them achieve their set goals and business objectives (Hall, 2000). In this paper we describe how the auto industry might work differently if it were designed in accordance with the Dell Model. The Dell model The Dell Model (Hall,2000,p.6). The strategy comprises of three main components namely the best direct customer experience, virtual
Dell Case Study and Business Strategy Comment by Sabina: Dell is one of the leading industries for computer production and sales globally. The brand is highly recognizable and the company is mainly known for its personalization of computers for customers. In 2004-2005 Dell became one the leaders in the industry for PC sales, by overtaking Hewitt Packard. However since 2007 sales have dropped and Dell is struggling to keep its market share.