SWOT Analysis on Dell Business Model
Strength
1) Dell 's Direct Business Model which consist of the five principles:
Most efficient path to the customer - through direct relationship with no intermediaries to add cost and confusion
Single Point of accountability - so that resources necessary to meet customer needs can be easily marshaled in support of complex challenges.
Build-to-Order - provide customers exactly what they want in their computer systems through easy custom configuration and ordering. Thus eliminates the maintenance of expensive inventory.
Low-Cost Leader - highly efficient supply chain management which eliminated inventory thus reducing stocking cost.
Standard-Based Technology - unlike proprietary technologies, standards give customers flexibility and choice.
2) Supplier Relationships: Dell 's highly efficient and integrated supply chain allows it to keep only four days of inventory which allow the company to provide customers the declined component prices.
3) Pricing: Dell 's highly efficient supply chain has gain advantage from the reduction of inventory maintenance cost and the depreciation of component price, which allow reduction in pricing for their customers.
4) Strong CRM: Build-to Order gives customers the flexibility to choose the kind of configuration they want, the direct model which sells directly to customer through the internet which gives the customer lower price and higher convenience. Dell is able to gives its support and service directly without the middlemen or resellers and maximum profitability to their customer in pricing, thus enhancing the value of CRM.
Weakness
1) Lacked of solid dealer relationship: Dell does not have a strong relationship with dealer due to their direct model, which sells directly to their customer. This has a big impact their brand name because it has resulted in lack of support from dealers to help promote their brand to consumers.
2) High dependency on component suppliers: Dell 's dependency on component supplier such as
1) Dell 's Direct Business Model which consist of the five principles:
Most efficient path to the customer - through direct relationship with no intermediaries to add cost and confusion
Single Point of accountability - so that resources necessary to meet customer needs can be easily marshaled in support of complex challenges.
Build-to-Order - provide customers exactly what they want in their computer systems through easy custom configuration and ordering. Thus eliminates the maintenance of expensive inventory.
Low-Cost Leader - highly efficient supply chain management which eliminated inventory thus reducing stocking cost.
Standard-Based Technology - unlike proprietary technologies, standards give customers flexibility and choice.
2) Supplier Relationships: Dell 's highly efficient and integrated supply chain allows it to keep only four days of inventory which allow the company to provide customers the declined component prices.
3) Pricing: Dell 's highly efficient supply chain has gain advantage from the reduction of inventory maintenance cost and the depreciation of component price, which allow reduction in pricing for their customers.
4) Strong CRM: Build-to Order gives customers the flexibility to choose the kind of configuration they want, the direct model which sells directly to customer through the internet which gives the customer lower price and higher convenience. Dell is able to gives its support and service directly without the middlemen or resellers and maximum profitability to their customer in pricing, thus enhancing the value of CRM.
Weakness
1) Lacked of solid dealer relationship: Dell does not have a strong relationship with dealer due to their direct model, which sells directly to their customer. This has a big impact their brand name because it has resulted in lack of support from dealers to help promote their brand to consumers.
2) High dependency on component suppliers: Dell 's dependency on component supplier such as
References: Computer Weekly (August 2002). Michael Dell spells out strategy for market defiance.Technology: servers. Access date: 3/1/2004 URL: [www.computerweekly.com] Mehta, V. and Kwinter, Y. and Wohl, A. and Blundo, J. (November 2001). Analysis on Dell Computer Coporation. Access date: 11/1/2004 URL:[http://web.mit.edu/wysockip/www/535/MIT2001/Dell.pdf] Ravi, K. and Marcia, R. (1999). E-Business Roadmap for Success. Addison Wesley Longman, Inc. (1999).