Dell Business Strategy Change

3956 Words Apr 19th, 2011 16 Pages
DELL Computers, a leading PC supplier to corporate and government customers, today is now among the first companies to provide its customers with the next level of industry-standard Pentium processor power, while many vendors are still struggling to broaden their processor-based product lines. Dell 's unique ability to take a market strategy position during important technology transitions because of its build-to-order manufacturing process. This build-to-order approach allows the company to maintain low inventory levels and integrate emerging technologies into systems. Today 's customers are reducing their supplier bases, providing the opportunity for the most capable suppliers to seize huge market share gains as Dell needs to redefine …show more content…
As it does with in-customer operations, the Web opens both new channel opportunities and new dimensions of customer service. However, this newly created channel must maintain the fit between a company 's account set and its business model. All too many companies lose sight of this critical factor as they indiscriminately pursue incremental revenues. Dell 's direct-to-customer channel strategy certainly is a breakthrough in the industry. In the early stages of a technology product 's lifecycle, distributors are important for supporting new adopters. Dell has discerned a lucrative set of high-end customers that were ready for direct distribution with arm 's length customer support from help lines. An innovative direct channel strategy gave Dell these crucial elements of its powerful business model: Ø Real-time customer feedback and market insights Ø The ability to "sell what you have"--that is, using day-to-day pricing and sales incentives to shift demand toward products that are currently makable Ø Extremely crisp product life cycle transitions Ø Elimination of the obsolete and excess dealer stock that plagues the non-direct competitors Ø The ability to control pricing on a real-time basis. The capabilities were rooted in each company 's core business processes, many of which focused on supply management. The new supply chain masters consolidated their supplier bases in

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