Dell Inc: Moving Beyond Direct Sales Model
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Case Details: |
Price: |
| Case Code |
: |
BSTR280 |
For delivery in electronic format: Rs.
400;
For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extraThemes
Business Strategy/ Sales & Distribution Management/
Supply Chain Management |
| Case Length |
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26 Pages |
| Period |
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2006-2008 |
| Pub Date |
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2008 |
| Teaching Note |
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Not Available |
| Organization |
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Dell Inc. |
| Industry |
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Computers |
| Countries
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Global |
Abstract:
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This case is about one of the leading personal computer (PC)
manufacturers Dell Inc.'s (Dell). The case discusses Dell's business model and
distribution strategy. Dell, which was known for its direct selling model that
was backed by strong supply chain management practices, lost its market
leadership to HP in 2006. In the mid2000s, some analysts had criticized Dell for
sticking to its direct-only business model. According to them, the business
model that had made Dell so successful in the past was not as effective as
before and the company was losing its competitive edge. In 2007, Dell announced
its intention of moving beyond the direct-only model that it had zealously
followed until then.
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Subsequently, the company rolled out its retail as well as channel partner initiatives. Though some analysts welcomed the move others felt that significant challenges lay ahead for the company.
Issues:
» Study Dell's direct-only business model and understand the
advantages and disadvantages of such a business model.
» Understand the reasons behind Dell's decision to move beyond its direct-only
model.
» Understand the issues and challenges faced by companies in managing the supply
chain and in launching new channel strategies.
» Understand the issues and challenges faced by companies making a transition
from a direct selling model to a multi-channel model.
» Gain insight into the fast changing global PC market and understand the
competitive landscape.
Contents:
Keywords:
Distribution strategy, Direct selling, Business model, Supply
chain management, Direct model, value web model, Lean manufacturing, Channel
strategy, Competitive advantage, Low cost leader, Retail, Retail strategy,
Channel partner program, Positioning, Emerging markets, PartnerDirect, Dell, HP,
Lenovo, IBM
A Gatling-Gun Approach?
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