Background On Dell Incorporation

The most critical shifts in Dell’s contextual factors, including industry dynamics, trends, technology changes and shift of the competitive landscape are following: The industry has changed significantly over the last 20 years. The traditional business model in the PC industry was inside-out, supplying machines based on orders from distribution, resell and retail channels, thus following the indirect selling concept. Dell’s direct model was at this time a new, challenging concept, taking orders directly from the end-consumer, and thereby, eliminating the middleman, costs and time. This was the initial crucial shift away from the traditional schema, allowing Dell’s quick

Present CEO and chairman of the board Michael Dell founded Dell in 1984, as a leading technology provider that designs, develops, manufactures, and supports PCs, software and peripherals, storage and servers, and associated services. With operations in four geographic areas and additional business centers and manufacturing sites in more than 20 locations around the world, Dell is able to reach more than 24,000 retail locations worldwide. Dell’s ability to process in-depth customer knowledge and the tailoring of solutions to the specific customer, through a direct customer sales model, catapulted the company in 2008 to the top PC provider in the United States and second worldwide in terms of sales.

There looks to be a growing demand for computers in the household, and Dell would like to accommodate that need. Dell has felt the need to

Removing multiple layers and working closely with customers and suppliers removes the possibility of misinformation, reaction time and ability to not only react, but to make more accurate forecasts. Dell has been able to streamline their customer response times by helping the customer ‘decide’ what they need. They make it easier for the customer to make the decisions and are ultimately preparing for it while the conversation is happening. Dell acts as a consultant and trainer getting direct feedback and key information for planning, research and development. They include key people from a wide range of responsibilities in regular meetings to ensure communication, ideas and overall commitment from the entire supply chain. Virtual integration goes even further to merge the traditional roles and boundaries of the supply chain.

The proposal presented herein gives the background information of Dell Computers Corporation highlighting the current operation for the manufacture of computers. The proposal highlights the potential of the company to increase its market share and profitability through change of its culture from order based to inventory base.

Affordability of latest technology through Direct Sales Services - Dells uses direct customer relationship or as it calls it “customer intimacy” as its distribution strategy. This means meeting customer needs directly and cutting middleman interference as much as possible. This is done either through dedicated sales representatives, telephone based sales and online at www.dell.com. As a result, the purchase price would be lower than other competitors.

This situation was different to Dell’s supply chain, were by using new technologies Dell shared information in a real time fashion with its suppliers, helping them know Dell’s daily production requirements making the supplier more responsive to Dell’s needs.

Essay 1 : Introduction to Dell 3 Parts - Look at the Business Model in Particular (Is it fit for purpose?) – Then the Ecosystem – The Modularization and mention licensing Look the Paradigm of Dell Conclusion

Dell was more capable of maintaining the Direct Model strategy than most, if not all, of its competitors. The resources that supported this advantage were the close relationship Dell had with its suppliers, a solid just-in-time inventory management system, and proximity of warehouses and production facilities to assembly operations. In addition, Dell’s computers developed a reputation of reliability and the company excelled at customer service. While the Direct Model seemed to challenge competitors, many other companies were able to imitate Dell’s reliability and customer service.

“Dell doesn’t want to pass on the secrets of the direct model to subcontractors. Dell is bringing in more of the box with more stuff in it from suppliers, but keeps control of the complex and proprietary parts of the process.

Dell has always been one of the largest PC makers in the United States. Recently, though its share of the PC industry has been declining. It went from the number one low cost provider of PCs in the world to number 3. Its inability to adapt to the new markets that have emerged has caused the company to fall behind other hi-tech companies such as IBM, Apple, and even HP. I feel this is an important topic because it is an example of a large company that has lost touch with what consumers want and is currently trying to restructure itself in order to gain back the dominance they once had. Consequently, Michael Dell has announced his decision to attempt a leverage buyout in order to retain control of his company. Furthermore,

The business model of dell which concentrates on a built to order framework where the middleman is removed and PCs are sold directly to the end buyer

▪Dell does not offer new innovations; they offer products and services to improve existing technologies 3

Dell has a distinct distribution strategy that disintermediating any middlemen as finished goods are delivered directly from plants to end customers by third-party logistics partners (figure 1)

Dell is among the world's leading computer manufacturers that has transformed and diversified into variety of business segments over the years. Products range from Dell PowerEdge servers, Power Vault, Dell EMC storage systems as well as PowerConnect switches for corporate clients. For individuals and professional customers products range from Dell Precision workstations, OptiPlex desktops, Dimension desktops, Inspiron and Latitude notebooks. Apart from these core products, the company also offer products and services range including printers, projectors, Axim handhelds, and other accessories. More recently, the company has announced intentions to explore LCD television/computer monitors as well as digital music players