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Presented By: Group A

Dell pioneered an innovative direct sales model in 1996 by launching its website Dell.com which allowed customers to directly configure and purchase computers, fulfilling orders within 36 hours through just-in-time manufacturing. Dell's success was built on its integrated direct sales approach eliminating intermediaries and enabling it to reduce costs while providing customized, high quality computers directly to customers. The direct model also provided Dell insights into customer needs allowing it to tailor products, services, and support.

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Niladri Saha
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44 views19 pages

Presented By: Group A

Dell pioneered an innovative direct sales model in 1996 by launching its website Dell.com which allowed customers to directly configure and purchase computers, fulfilling orders within 36 hours through just-in-time manufacturing. Dell's success was built on its integrated direct sales approach eliminating intermediaries and enabling it to reduce costs while providing customized, high quality computers directly to customers. The direct model also provided Dell insights into customer needs allowing it to tailor products, services, and support.

Uploaded by

Niladri Saha
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Presented by:

Group A
Dell Online

• In July 1996 Dell computers launched its online


website www.dell.com
• Industry analysts agree that Dell Online is an
innovation and is a huge success story, just as Dell
Direct a decade ago
• Dell’s business model is to let the customer
configure the product on the web and fulfill within
36 hours.
• Customers can check the order status and also get
the technical help online.
Milestones…
• Dell is the top provider of laptops and desktops to
schools in several geographies around the world.
• No. 1 healthcare IT Services provider in the world.
• No. 1 provider of PCs to large enterprises around the
world.
• No. 1 provider to public sector customers in the U.S.
• No. 2 provider of computer support to education
customers
The Dell Direct Model

• PC manufacturers generally use the indirect


sales channel
– The distributors or resellers purchase the PCs
from the manufacturer and distribute them to
corporate customers after customization
– Retail chains sell to the consumers
• Dell’s direct model is based on direct sales
to the consumers as well as corporate
customers over the phone and the Internet
DELL’S Business Model
Direct Model: Characteristics

• The Dell model is characterized by


– focus on specific market segments
– high velocity-low cost distribution
– build-to-order and direct-to-customer relationships
– JIT manufacturing and strong supplier management
– Minimum Inventory (13 days): Allows sooner introduction
of new products
– Service and repair through telephone and third parties.
• Each customer order may be unique in terms of
manufacturing, procurement, packaging, and logistics
requirements.
Direct Model: Advantages

• Direct model has several key advantages


– By eliminating the intermediaries, Dell reduced the
channel costs from 13.5%-15.5% to 2% of product
revenue.
– Every Dell system is BTO and so customers get what
they ask for.
– Dell used the customer knowledge for tailoring the
service and also to forecast the future
– Latest technology is used in products since inventory
carried is small
Dell is an Integrated Network

• Dell uses the Internet to achieve high degree of


coordination
– Suppliers are told exactly what the daily requirements are
and are asked to make door delivery.

• It is not, every week deliver wxyz to this warehouse, put it in the shelves
and take them of again to send it to the factory.

– Most of Dell’s suppliers are less than 20 min away.

– Suppliers assign engineers to Dell’s design teams and


these are stationed in Dell plants
– Trust is cemented by Internet. Suppliers have real time
sales data.
WWW.Dell.com
• Internet commerce is a natural and logical extension of
Dell direct and proved to be more efficient.

• Costs of configuration, ordering, tracking, and support


went down by 15%.

• Dell used to mail catalogues to prospective buyers.


On the average 10% of these lead to sales calls and
20% of this number resulted in actual sales.

• 0.5% of site visits resulted in actual sales and 5% in


phone calls.
WWW.Dell.com
• Calls from web customers were shorter and more
productive

• More than 65% phone calls are regarding the status of


shipments and these are now shifted to the website.

• Dell’s web based technical support also resulted in


savings

• Dell designed customized websites called Dell Premier


pages for all its corporate customers.
WWW.Dell.com

• Dell moved all day to day information to the Intranet.


• Using extranets information is given to both
customers and suppliers.

• Dell thus became a virtually integrated enterprise– an


organization linked by information using a private
exchange.

• Dell is a manufacturing enterprise with coordinated


relationships with suppliers, vendors and maintenance
providers
Why Dell Succeeded with the Internet
• Dell is a prominent example of successful
migration to the Internet—a success that is largely due to the
company’s ability to
leverage pre-Internet capabilities.

• Small–to–medium size businesses and home


computer users called 1–800–BUY– DELL, where trained sales
representatives helped them understand the company’s products
and assess the compatibility of the components that they wanted.

• When the customer had arrived at a compatible system


configuration, the sales representative entered the order into the
company’s IT system.
• Payment Options of Dell
Credit card (American Express, Visa, MasterCard and
Discover)
PayPal account (for online orders only)
Dell Preferred Account (personal line of credit)
• Delivery Estimates is provided.
The date of estimated delivery will be send to the customer.
• What Are the Delivery Options?
Next-business-day delivery (fastest delivery option)
Second-business-day delivery (fast delivery)
Three-to-five-day delivery (economy delivery
Seven-day delivery (standard delivery option)
• Emails will be sent to keep the customers
informed about the progress of the order.
Order Confirmation
Order Shipped
Other Emails About Your Order
Competitors
Why Dell??
• Convenient Shopping
chat wit a Dell Expert
find your perfect system
technology advice
• Ships Fast
get a system quickly
fast delivery
• Personalization
customized components
design & color options
Chat wit a Dell Expert
• Award Winning Technology
The latest technology
Advanced systems & graphics
Award winning products
• Flexible payments
Credit card (American Express, Visa, MasterCard and
Discover)
PayPal account (for online orders only)
Dell Preferred Account (personal line of credit)
• Service and support
Experts are available 24/7 to assist with
• 21 Day Return Policy

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