We have been told about Direct Business Model and I was interested in learning more because, at first, I did not see how this would be successful. I looked into Dell Computer’s business model and I came away with a new understanding.

Michael Dell wanted Dell Computers to offer customers a customer-centric philosophy that would serve them with respect. He also wanted to cut costs, improve delivery time, all while maintaining supreme customer service. This combination, before Dell, was almost an impossible combination and Michael Dell had to innovate to make it possible.

He quickly established the “direct model”, which he owes almost completely to his success in the computer industry. The direct model improved efficiency by removing all intermediaries thereby allowing the company to speak directly to the customers which allowed Dell to customize orders according to the customers needs. The direct model can also be attributed to the lower costs Dell can offer because they do not have the operational costs competitors may have.

http://seekingalpha.com/article/15477-dell-finally-improving-its-business-model