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Dell Harvard Case

In: Business and Management

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Dell Online
Case Presentation

Introduction & Challenge
Dell has emerged as one of the biggest sellers in the PC market. From humble beginnings in 1983, when Michael Dell worked out of his campus dorm room, to 1996 when we reached $7.8 billion in sales, the source of our amazing success has been our unwavering focus on the customer, termed the “Dell Direct Model.”
The Dell Direct Model was ingenious. Michael Dell took a simple concept, selling direct to the consumer (Appendix. 1), and built a business model that, quite simply, outclassed his competitors. By selling to the customer direct, eliminating the traditional dealer channel and using a just-in-time (JIT) production procedure, Dell has created unparalleled efficiencies in operations. This allows us to provide high quality products at a lower price than our competitors. In addition we have leveraged supplier relationships to build a supply chain that is unmatched; our relationships with our suppliers have facilitated our JIT production model which allows us to enjoy a significant competitive advantage in price, product reliability and product delivery.
It appears that we are perfectly positioned to take advantage of the new online market having sold direct to customers for the last decade and already establishing ourselves as the leader in internet sales. Michael Dell has presented a strategic objective for our company, to “…do at least 50% of our business over the web…” Despite our initial success selling online, we face significant challenges in this new online era: i) How can we encourage more online purchases? ii) Our competitors are fully aware of the business practices that are responsible for our success and may attempt to duplicate our practices iii) How can Dell Online bring value & efficiencies to our customers? iv) Our profit margins in the PC market are…...

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