Abstract

Dell (formerly Dell Computer) has emerged as one of the leading players in the PC industry through its direct selling model. Dell's build-to- order format has got a big boost with the arrival of the Internet. The company has maintained momentum in a rapidly commoditising industry, where most other players are still struggling. As a cost leader, Dell has concentrated on activities where it can add most value and on market segments where profits are highest. Dell has ensured that customer service is not diluted in the process of cutting costs. Many players in the PC industry have attempted to replicate Dell's business model but failed. It is Dell's disciplined execution that has driven Dell's success. Dell has also demonstrated that it is not R&D spending alone which determines a company's success. This case can be used to understand how an innovative business model evolves.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Dell, Dell computers, Strategy, PCs, Michael Dell, Direct from Dell, Business model innovation, Compaq, IBM, Commoditising industry, Fortune 1000 companies, Customer relations, Cost leader, Build-to-order, Direct selling