What is the "direct business model"?
Dell is one the largest technological corporations in the world. Dell was founded by its very own Michael Dell and it’s the third largest computer vender in the market after HP and Lenovo. Dell believes is their direct business model, hence the reason why they are number 41 in the Fortune 500 companies. They have sold the most pc systems on a hold than its competitors from 1999-2006. The direct business model of Dell is simple- They have this price effective method put in place, where they cut out the middle man, like the wholesalers and prefer to sell they products directly to their customers. Their build to order method has been a part of their structure for a long time, which help minimizing their stock …show more content…
It’s always good to cut out the middle man especially for a product like PCs, which is sold via the internet and not a brick and mortar store or other online outlets. The process is simple, its coast effective, provides direct relationship with customers, easy inventory and quicker product. Building a relationship with customers is a very important way of having a large customer base. You will be widely known in a short space of time. For example, if I BUY a pc on Dell and my friends and family ask me where I bought it, I will recommend Dell instead of a third party. Now, can you imagine buying a Dell pc from let’s say Walmart, there is a 100% chance you will recommend Walmart instead of Dell; even if it’s a Dell PC. So doing business directly with consumers increases returns on investment and keep Dell in business for a long …show more content…
It’s always more difficult describing features for such a product like a pc. The wait time if you have to return the product and receive another can be very tiring and can cost money especially if it’s a business. Maintaining consumers’ confidence for the product they want is very important, and this could pose as a limitation for this model also. It’s said that Dell is planning on showcasing its products in some outlets, which is a smart move, because consumers’ are getting wiser and want to actually see or sometimes feel the product they are buying. So as long as they stick to their old business model, they will continue to lose potential
Dell is one the largest technological corporations in the world. Dell was founded by its very own Michael Dell and it’s the third largest computer vender in the market after HP and Lenovo. Dell believes is their direct business model, hence the reason why they are number 41 in the Fortune 500 companies. They have sold the most pc systems on a hold than its competitors from 1999-2006. The direct business model of Dell is simple- They have this price effective method put in place, where they cut out the middle man, like the wholesalers and prefer to sell they products directly to their customers. Their build to order method has been a part of their structure for a long time, which help minimizing their stock …show more content…
It’s always good to cut out the middle man especially for a product like PCs, which is sold via the internet and not a brick and mortar store or other online outlets. The process is simple, its coast effective, provides direct relationship with customers, easy inventory and quicker product. Building a relationship with customers is a very important way of having a large customer base. You will be widely known in a short space of time. For example, if I BUY a pc on Dell and my friends and family ask me where I bought it, I will recommend Dell instead of a third party. Now, can you imagine buying a Dell pc from let’s say Walmart, there is a 100% chance you will recommend Walmart instead of Dell; even if it’s a Dell PC. So doing business directly with consumers increases returns on investment and keep Dell in business for a long …show more content…
It’s always more difficult describing features for such a product like a pc. The wait time if you have to return the product and receive another can be very tiring and can cost money especially if it’s a business. Maintaining consumers’ confidence for the product they want is very important, and this could pose as a limitation for this model also. It’s said that Dell is planning on showcasing its products in some outlets, which is a smart move, because consumers’ are getting wiser and want to actually see or sometimes feel the product they are buying. So as long as they stick to their old business model, they will continue to lose potential