28-09-2012, 01:11 PM
Be Direct: DELL
Be Direct.ppt (Size: 768 KB / Downloads: 26)
Introduction
Before Michael Dell, innovation was about well-schooled engineers in R&D labs inventing high-margin products and technologies.
Dell instead trained his eye on finding the most efficient way to get tech products into the hands of the consumers.
Perfected the credo— “Cut out the middleman.”
Perfected the credo— “Cut out the middleman.”
DELL eliminated the need for inventory or middlemen and gave itself a built-in price advantage, which it in part keeps as profit and in part passes on to customers.” Fortune 11/28/2005
Case Questions
What impresses you about this company?
What is your assessment of the job Michael Dell has done, as CEO? Senior management?
How did Dell segment its customers? What types of customers? What were they like?
Who’s the competition for “transaction” customers?
Who’s the competition of the other segmented customer?
What are the advantages of this direct marketing and direct manufacturing model?
With its past distribution agreements with Staples, CompUSA, and Sam’s Clubs, why did Dell have a problem with the retail entry?
Wrap Up: Now and Then
Avoiding dealers means less mark-ups, less overhead and delivers lower prices to the customers for DELL.
DELL: Number One in PC Sales
DELL is one of the Most Admired Companies Fortune’s Annual issue
In 2003, generated 80% of profits from sales to businesses.
With one week of parts on hand, DELL turns over its inventory 52 times a year. Compaq and HP turn over is 13.5 and 9.8.