Dell’s case: the build-to-order business model

Type :

Research papers

Pages :

5 pages

Format :

.doc

Published date :

01/12/2009

Category :

Business & market

Sub category :

Business strategy

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Summary :

Company background.
Dell and the technology complex: The build-to-order business model.
The role of IT and Internet in coordinating Dell's value chain: Dell as an e-commerce company.
1. Direct PC value chain: Dell' s hardware delivery system.
2. Primary activities.
3. Support activities.
The strategy-technology relationships.
Conclusion.
References.

Abstract

Michael dell founded the company in 1984 while he was at the University of Texas at Austin. He began by selling improvements of IBM-compatible PCs and started to sell his own brand of PCs one year later (the Turbo). The concept was very simple: from the beginning dell's business model was based on direct sales. Taking order by telephone or today thanks Internet, PC's fitted exactly customers' needs by selling computers directly to customers at very competitive prices. This direct business model eliminates retailers that add unnecessary time and cost, or can diminish dell's understanding of customer expectations.
« At dell, our approach to innovation focuses on customer requirements. Customers define what is important. dell innovates internally and through collaboration with others in the industry. Many of dell's innovations are shared through standards, rather than locking customers into proprietary solutions. Customers gain flexibility and real value. This approach is direct, customer-driven innovation." Kevin Kettler, Chief Technology Officer.
dell also introduces the latest relevant technologies much more quickly than its competitors. For example, in 1987, dell was the first computer systems company to offer next-day, on-site product service. Moreover, in 1996, dell launched its website www.dell.com and customers started buying computers online.