In 2006, Dell Ranks No. 8 in Fortune magazine’s annual list of the most-admired companies in the United States. My analysis shows this is mostly due to dell’s direct business model.
Firstly, Dell can greatly improve efficiency by speaking directly to the customer. They can adjust their offer in response to the customers’ request in a shorter time. Secondly, by eliminating the intermediaries, Dell could dramatically reduce its channel costs. Finally, this also creates more options for customization. The establishment of www.dell.com has opened up the company’s product to a considerable number of potential customers. By visiting the site, not only can customers order their PC, get technical support, but they can also download updates to their software. The more channels there are for the customers to buy products, the greater revenue the company will get.
Even though going direct to the market has many advantages, not a lot of company actually do this because of the high responsibility and the variable service the company itself has to offer. However, Dell’s business has proved that going straight to the market can lead to success for the company.
Sources:
http://www.gaebler.com/Dell-Direct-Model-to-Success.htm
http://www.cs.colorado.edu/~homaei/projects/files/ITM-Dell.pdf
Recent Comments