Dell Case Essay

1148 words - 5 pages

Dell Case 1. Dell?s Online Success inevitably resulted in a complete alteration of their business strategy, which focused on making every decision ?customer-driven,? while increasing efficiency across the company. With the formation of the Dell Direct Model, which focused on made-to-order products, a low cost distribution system, rapid lead times, and the maintenance of customer relationships, this new concept needed strong sales and marketing opportunities, as a customer could get a made-to-order computer shipped to their home in about 36 hours, which was a model time within the computer industry at the time. With the Internet craze of the 1990?s, the Internet presented the ease of a new information channel, which was the perfect mode of extension for the new Dell Direct Model into customer?s homes. On behalf of Dell?s original position within the PC market, as Dell did not have a distribution channel, but always directly dealt with the customers themselves, Dell?s marketing force believed that Dell?s venture of expanding retail sales, support help, an order tracking system, and other services directly into the homes and businesses of its customer base, would be extremely profitable through Dell Online. They were right, as sales revenues from the website generated about $3 million a day a year and a half preceding it?s launch (mostly coming from business customers), which were accompanied by high levels of customer satisfaction concerning their purchases online. With these high levels of customer satisfaction came goals to further reduce costs, which were saved by reducing the telephone calls between customers and sales reps and also by making possible higher sales quotas for sales reps as a result of the leads that were achieved as a direct result of online usage. Further success came as a result of the satisfaction accompanying customer-tailored services, such as ?Dell Premier Pages,? which directly allowed large institutional customers to do such things as buy, price and construct systems, as well as track order status. Dell?s online success can be seen as an overall company makeover tailored more towards understanding their customers as well as setting them up for other market opportunities such as going global, without the need for large capital investment in a sales force.2. The advantages that Dell derived from its Online success includes wider expansion to the limits of their distribution channel, as Dell has always dealt directly with customers, without relying on any other extensive distribution channels. As the number of households with the internet increased, so did the possibility of obtaining new customers, who never would have went through the trouble of finding Dell Sales reps and ordering a computer from them. This advantage is significant, as Dell did not have to interrupt or anger fellow supply chain players, but simply expanded their range of possible customers that could now more easily deal with Dell. Dell also became more...

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