Mis Case - Dell
1|Page Dell 's Direct Business Model
Dell 's Direct Business Model
Presented by Riti Behal – FT 14459 Gagan Dawar – FT 14221 Vaibhav Agarwal – FT 14276 Great Lakes Institute of Management, Chennai
Riti Behal, Gagan Dawar, Vaibhav Agarwal
2|Page Dell 's Direct Business Model
Describe the “Direct Business Model” The direct model has become the backbone of our company and the greatest tool in its growth. – Michael Dell. Dell 's direct business model bypasses the dealer in the supply chain and sells computers directly to customers, building each to order. Dell does not manufacture the computer components; they merely assemble computers based on components that are available in the market. The focus is solely on the customer. There are ten key elements in dell’s strategy that has made has successful today: Go Direct – by eliminating the dealer in the supply chain and selling computers directly to customers, eventually letting them customize the laptop they want. Provide the Best Value – You have to just say Michael Dell has done a hell of a job. No one has pulled the levers of cost, quality and service better than Dell. – Jack Welch, former CEO of GE. Focus Fanatically on customers – The do it the customers way mantra has created for Dell the tightest – and the most envied – relationship with buyers in the PC business. – Business Week, 1988. Celebrate Standardization – Dell has thrived as downward-spiraling prices and commodification washed over the company’s customers and bashing its competitors. – Fortune Magazine. Have Zero Tolerance for Inventory – The longer you keep inventory, the faster it deteriorates – you can literally see the stuff rot. Because of their short product life cycles, computer components depreciate anywhere from a half to a full point a week. Cutting inventory is not just a nice thing to do. It’s a financial imperative. – Kevin Rollins, former President and CEO of Dell. Always adapt, always execute – Dell is an execution
Dell 's Direct Business Model
Presented by Riti Behal – FT 14459 Gagan Dawar – FT 14221 Vaibhav Agarwal – FT 14276 Great Lakes Institute of Management, Chennai
Riti Behal, Gagan Dawar, Vaibhav Agarwal
2|Page Dell 's Direct Business Model
Describe the “Direct Business Model” The direct model has become the backbone of our company and the greatest tool in its growth. – Michael Dell. Dell 's direct business model bypasses the dealer in the supply chain and sells computers directly to customers, building each to order. Dell does not manufacture the computer components; they merely assemble computers based on components that are available in the market. The focus is solely on the customer. There are ten key elements in dell’s strategy that has made has successful today: Go Direct – by eliminating the dealer in the supply chain and selling computers directly to customers, eventually letting them customize the laptop they want. Provide the Best Value – You have to just say Michael Dell has done a hell of a job. No one has pulled the levers of cost, quality and service better than Dell. – Jack Welch, former CEO of GE. Focus Fanatically on customers – The do it the customers way mantra has created for Dell the tightest – and the most envied – relationship with buyers in the PC business. – Business Week, 1988. Celebrate Standardization – Dell has thrived as downward-spiraling prices and commodification washed over the company’s customers and bashing its competitors. – Fortune Magazine. Have Zero Tolerance for Inventory – The longer you keep inventory, the faster it deteriorates – you can literally see the stuff rot. Because of their short product life cycles, computer components depreciate anywhere from a half to a full point a week. Cutting inventory is not just a nice thing to do. It’s a financial imperative. – Kevin Rollins, former President and CEO of Dell. Always adapt, always execute – Dell is an execution
Bibliography: http://supplychainbeyond.com/why-your-supply-chain-needs-a-many-to-many-networkfrom-vertical-to-virtual-integration/ http://www.studymode.com/essays/Dells-Direct-Business-Model-51913.html http://sellingchange.com/discussion/vertical-integration-or-virtual-integration/ http://www.cs.colorado.edu/~homaei/projects/files/ITM-Dell.pdf http://stuff.mit.edu/afs/athena/course/15/15.823/attach/Dell%20CASE.pdf How Dell Does It – Steven Holzner Riti Behal, Gagan Dawar, Vaibhav Agarwal