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Dell business model
Dell's business model involves selling computers directly to customers by building computers based on customer orders rather than maintaining large inventories. This allows Dell to minimize costs and bring new products to market quickly. Dell's direct sales and build-to-order model has proven more successful than traditional manufacturers' strategies and enabled Dell to increase its market share and profitability. The document outlines Dell's business model and compares it to traditional manufacturers, and notes how Dell's customer-focused model gave it an advantage in the PC industry.
Dell business model
- 1. Dell’s Business Model Created by Mihika Baisya PRN: 12030141003 MBA IT
- 2. DELL • Was founded by Michael Dell. • One of the largest technological corporations in the world. • The third largest PC vendor in the world after HP and Lenovo • Listed at number 41 in the Fortune 500 list. • From 1999 until 2006 Dell delivered more complete computer systems worldwide per quarter than any other PC manufacturer.
- 3. What is aBusiness Model? • Model – A model is a plan or diagram that is used to make or describe something. • Business Model – A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, or other forms of value). The process of business model construction is a part of business strategy. – The term “business model” is used to include all the activities that defines how a firm competes in the marketplace.
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- 5. The Business Modelcontd.. • Dell created a cost-efficient way to sell their computers by “cutting out the middle man” and selling their computers directly to the customers. • Dell’s strategies of direct sales and build-to-order production have proven successful in minimizing inventory and bringing new products to the market quickly, enabling it to increase its market share and achieve high returns on investment.
- 6. Dell’s Business ModelVs. Traditional Manufacturers
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- 8. A Success Story •The exceptional performance of Dell Computers in recent years illustrates an innovative response to a fundamental competitive factor in the personal computer industry—the value of time. • The Dell case illustrates how one business model may have inherent advantages under particular market conditions, but it also shows the importance of execution in exploiting those advantages. • Tailoring their computers to their customers’ specifications and selling the item directly to their customers is what makes Dell’s business model superior • Dell’s business model has ignited a spark that is not likely to be extinguished in the near future.
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