Dell 's Direct Selling Issues

In 1994, Dell made the bold decision to remove their products from retail stores and focused on direct to customer sales. In 1996 Dell began selling through their website which is to this day their most successful sales channel. By eliminating their retail store presence Dell was able to reduce costs on multiple fronts, reduce inventory, and maximize profits. Dell created an order system which allowed customers to specify and select options, components and features they wanted on their Dell device. Dell 's just in time inventory system lowered inventory holdings to just 3 days from 9 days and storage costs were thus minimized significantly. In 1995, Dell entered the Chinese market where a population of 1.3 billion was a great opportunity to create a significant market presence; IBM, Compaq, and Hewlett-Packard had all penetrated the Chinese market prior to this date and had opened offices in China during the early 1990’s. It wasn’t long before Dell proved to be worthy competition with not only international companies but also with local companies like Toshiba, Samsung, NEC and Acer. With so

Dell’s company strategy is to deliver a quality product to their customer and the company will not hold inventory. The orders come in through the internet and that is how purchasing orders the parts that are needed to supply the customers with orders. Because Dell wanted to be able to touch the world with their product the internet was their best way of achieving this. The internet gave Dell the ability to surge in their sales. With the surge in sales, Dell had to take the production of Dell products to other countries. To do this they had to do research to ensure that they could bridge the cultural differences and obtain the ability to open plants in major cities where the product could be sold saving cost in transportation to get the

Dell. Dell’s products—computers, servers and printers—are commodities. Dell tends not to develop the technologies underlying these products. Instead, it purchases the components from firms that develop the technologies (semiconductors and computer software). Dell’s direct-to-customer marketing strategy is not unique, but the extent to which Dell performs this strategy better than anyone else in the industry gives it a competitive advantage. Its size, purchasing power, quality control, and efficiency permit it to operate as a low-cost provider.

Dell is a computer corporation recognized for manufacturing computer systems through parts assemble. In 1983, Michael Dell saw an opportunity in using IBM compatible computers for a new assembly line that can be sold to local businesses. The idea as explained by Michael Dell, in one of his interview, is that in the early days of computers' manufacturing, companies had to be able to produce every part of the system. As the industry matured, companies started to focus on single parts and to become specialized in creating items that can be assembled with other parts to prepare a computer. As a result, Dell understood that to have a competitive edge in the market, they needed to

In 2007, Dell decided to change the supply chain strategy to support the use of retailers for selling a standard configuration computer for customers. Customers could visit their local Wal-Mart or if in China, the local GOME retail store to pick from the standard computer models available (Chopra, 2012, Pg. 6). The changes Dell made to support the retailer to end customer model helps increase the revenues and provides a low cost solution at retail points of sale. Dell utilizes the retailer’s distribution and retail store facilities which keeps the costs low for Dell and also sees lower outbound transportation costs compared to the online supply chain model (Chopra, 2012, Pg. 21).

Having the low cost advantage Dell is able to expand the gap between cost and customer's willingness to pay. Therefore, they are able to satisfy their end-consumers, who are educated want product stability, high-end performance and low lifetime costs. They have served the US market and started to expand their market worldwide; in addition, they have

Dell’s target market consists of personal computer users and corporate users. Dell is known for their ability to build computers suited to their customers needs. Because their largest customer base is marketed online, their geographic area is unlimited. Since technology is rapidly progressing and moving away from traditional PC’s, Dell has to diversify their products.

For some consumers it is an inconvenience that Dell PCs cannot be purchased through retail outlets

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

Dell 's Competitive advantage lied in its very low or negligible inventory that it held. Also, because of its direct sales strategy it eliminated the intermediaries. Dell also had a first mover advantage in the direct selling model.

The efficient roll-out of new products may be impacted negatively due to lack of communication between these two key departments. Also suppliers were picked based on cost, and little regard was given to the overall supply chain cost.

The biggest area of expansion for Dell is the consumer market. In order to develop more sales in this market Dell needs to focus more advertising on the needs and wants of the consumer. Currently Dell promotes its direct model, which is a key factor Dell needs to create a better position for itself in the consumer market. With all of the PCs in the market being more or less equal, Dell needs to focus on what differentiates its products from the competition, namely service and support.

The company has come a long way in the last 32 year from Michael Dell 's Texas dorm room. From that time on Dell has been a dedicated player producing quality personal computers for homes and businesses, as well as government and private organizations. Dell currently manufactures, designs, and sells an extensive range of computing products globally. Dell also support several office applications include security software, antivirus, laptop accessories, and televisions, networking entertainment software, keyboards, mice, printers, and power adapters, digital cameras etc. Dell’s mission doesn’t stop there. They also provide technical support in the company wide with excellent financial services, infrastructure technology services, and Information Technology consulting services. Dell’s serves several different groups which include Government, education and health care

In a bid to capture the market share Dell deviated form its direct-only model to indirect selling using mass market retailers like Compa USA,Staples etc and using resellers in foreign market s where due to timing and infrastructure obstacles direct distribution was complicated.

Dell is a computer corporation recognized for manufacturing computer systems through parts assemble. In 1983, Michael Dell saw an opportunity in using IBM compatible computers for a new assembly line that can be sold to local businesses. The idea as explained by Michael Dell, in an interview with Joan Magretta[1], is that in the early days of computers' manufacturing, companies had to be able to produce every part of the system. As the industry matured, companies started to focus on single parts and to become specialized in creating items that can be assembled with other parts to prepare a computer. As a result, Dell understood that to have a competitive edge in the market, they needed to focus on