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...
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
[...] 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 Inc. The head office of Dell is at Austin, Texas at the same place where the company was based. Dell Americas is also located in Texas, which is the regional business unit for the United States, Canada and Latin America. The regional headquarters offices of the company are in England, for Europe Middle East and Africa; in Singapore catering to Asia-Pacific; and in Kawasaki, Japan, to serve the market for
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.
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