Power of the Direct Business Model

I found the 13th class of Comm 101 interesting, especially the rise of Dell in the early 90s. Dell was the number 1 computer manufacturer and controlled more market share as compared to their competitors. The reputation and success of Dell seemed to be increasing and no other company seemed to be able to compete with Dell. Yet, Apple, who  faced rocky sales and low market share at that time gradually rose and ousted Dell as the number 1 brand in consumer electronics. How that became possible in the short span of 10 years or so is just intriguing.

One of the main reasons why Apple became successful in terms of profit and reputation is  through the excellent use of the Direct Business Model (DBM). Although not the first to sell directly to their customers, Apple has implemented the use of the DBM efficiently, hence leading to more profit due to the double margin effect.

Apple is also known for their immensely strong customer relationship. Having friendly and helpful Apple staff, along with the inclusion of AppleCare with the purchase of any Apple product, Apple has indeed given customers the ability to engage with the company directly, leading to a higher degree of trust and increased loyalty.

There is more to be said of Apple’s rise to fame, but unfortunately I have run out of words. However, if you are keen to know more, do read about Apple’s history and also, Apple is the new Dell to gain an insight of Apple’s achievement.

Author: Loh Wil Fred

First year student studying in the Sauder School of Business

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