Essay About Provider Of Products And Direct Contact

Dell History
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Headquartered in Austin, Texas, Dell is the number 1 PC company in the world in terms
of total sales. Dell also is also a provider of products and services, including those
required for customers to build their own information technology and Internet
infrastructures. Dells dominant position in PC industry can be attributed to its persistent
focus on delivering the best possible customer experience by directly selling products and
services based on industry-standard technology .
Dell was founded in 1984 by Michael S. Dell, a student at the University of Texas, who
with $1,000 dollars in capital starting selling custom built computers for customers
looking for a lower cost alternative to more mainstream systems. He worked out of his
dormitory room, and would later drop out of school to pursue his small, yet profitable
venture. He based his business around one simple concept: that by selling computer
systems directly to customers, Dell could best understand their needs in a way no
middleman ever could, and thus he could efficiently provide them with computer based
solutions that best suit their requirements. This approach, called the direct business
model, allowed Dell to customize each system to the unique needs of each customer,
while providing them with a competitive price, high quality, leading edge technology and
personalized customer support. Because Dell sells directly to its customers, they do not
need to go through slow-moving, indirect business and retail channels, which allows
them to keep their products as up to date as possible with the most current technology.
This also allows them to keep inventory costs at a minimum, which is made possible
through close, integrated links with their key suppliers. The model also provides them
with direct contact to their customers, which allows them to tailor support offerings to fit
the demands of each customer in a quick, and timely manner. The significance of the
direct business model cannot be underestimated, as it has radically changed the way in
which companies in the computer industry view the ways in which they do business. The
direct business model has been, and will continue to be, the key concept behind Dells
success, as it has proven itself to be an invaluable resource to Dell.
The Internet proved to be a logical way for Dell to expand their reach to their customers
in an unprecedented way that was never possible before. By applying the direct business
model to incorporate the efficiencies and the global reach provided by the Internet, Dell
can enhance and broaden the fundamental competitive advantages provided by the model
in ways never before possible. Dell led the way in commercial migrations to the Internet
by launching www.dell.com in 1994, and adding an e-commerce capability in 1996. The
following year Dell became the first company to record $1 million in online sales, paving
a pathway for others to follow suite.
Dells product line can be divided into three categories:
! Personal computers for home and small business use
Product lines in this category include: Dimension desktops and Inspiron laptops.
Customers of these products desire competitive prices, high quality, fast
performance, and industry standard levels of customer support.
! Computer system solutions for medium to large businesses
Product lines in this category include: Dell Precision workstations, OptiPlex
desktops, PowerEdge servers, PowerApp appliance servers, PowerConnect
switches, and PowerVault storage products. Customers of these products demand
the highest levels of quality, reliability, performance, and customer service.
! Complete consulting, deployment, and support services
The product offered in this category is under the name of Dell Premier Services.
These services provide customers with a full range of computer-based solutions
for their business. Dell Premier clients include industry giants such as Boeing and
Proctor and Gamble.
Dell also sells peripherals from various top manufacturers, including: Microsoft, HP,
Canon, Iomega, and APC. About three-quarters of its sales are from desktop and
notebook PCs, with its enterprise products and services making up the other quarter.
Competitive Strategy Statement
The following two excerpts were taken from Dells FY2001 Annual Report:
! ” However, as proud as we are of our operating results, they dont describe why more and
more customers choose to do business with Dell. That explanation begins with our oneto-
one relationships and determination to provide the best possible customer
experience. ”
! ” The competitive advantages of our direct business model are particularly compelling in
challenging times.