Dells Direct Business Model Essay

This essay has a total of 496 words and 3 pages.

Dells Direct Business Model

Subject: Dell's Direct Business Model
Date: 04/08/05
Will Dell's direct business model continue to provide a competitive advantage as fellow
competitors Compaq, IBM, and HP emulate Dell's direct model?

Dell's direct business model bypasses the dealer in the supply chain and sells computers
directly to customers, building each to order. Dell does not manufacture the computer
components; they merely assemble computers based on components that are available in the
market.

Dell's use of technology and information to blur the traditional boundaries between
suppliers, manufactures, and users is named virtual integration. To achieve the advantages
of an integrated company, Dell treats suppliers and service providers as if they were
inside the company. Their systems are linked in real time to Dell's system and their
employees participate in design teams and product launches.

Dell measures inventory velocity which is defined as the reciprocal of the average amount
of time a product spends in inventory. Accumulating inventory is the fast moving PC
computer industry is very risky due to the fact that many components quickly become
outdated.

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