By:

Jagjyot Singh Chadha Shaswati Sen Poulomi Sen Priya Khurana Chaitanya Bansal
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Introduction
Founded by: Michael Dell (CEO) in 1984
Revenue $57.4 billion (2007) Net income $2.6 billion (2007) Employees 90400 Operate in 34 countries. Slogan: Uniquely You
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History
Dell grew through the 1980s and 1990s to become at one

stage the largest seller of PCs and servers. In 1992 Dell first time enter into the Fortune 500 list. In 1996, Dell began selling computers via its web site. In 1999, Dell overtook Compaq, to become largest seller of personal computers in US. In 2006 rank of Dell is 25th in fortune 500. It currently holds the second spot in the hardware computer industry behind Hewlett-Packard after the latter's merger with Compaq in 2002.

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Traditional Business Model

Dell sold its product to End user customer /corporate customers. Using direct sales model via Internet and Telephone network.

Dell Online
Started in 1996

website www.dell.com
Dell online is a high success story industry analyst Millions of people visit the website each week and

generate millions of dollars revenue. Dells 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.
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DELLs VALUE WEB MODEL

DELLs VALUE WEB MODEL

Component Suppliers

Component supplier
The suppliers of high-tech components, such as

microprocessors and software provided by firms such as Intel and Microsoft, The low-tech, low-differentiation components manufacturers who compete on prices and availability. High tech components Low tech components Rely only on big players Small multiple players
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DELLs VALUE WEB MODEL

CMs/OEMS

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Original equipment Manufacturer(OEM)

The OEMs traditionally would receive all the parts from their suppliers, assemble the computers in their production lines and ship them over to their distributors, or Corporate resellers. e.g. Company XYZ receive parts from Intel (processor), Microsoft (software) then this company assemble the computer to Santech computer.

Microsoft, Intel
Supplier

XYZ
OEM

DELL
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DELLs VALUE WEB MODEL

Distributors

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Distributors
They generally supply to corporate resellers and other

distributors. They carry large quantities of different products, to increase their leverage when dealing with their customers. They also provide specific software, peripherals, furniture, etc, as well as service. e.g. Ingram Micro, Tech Data, Computer 2000, and Santech .
DELL

Distributor

Other distributor & customer

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DELLs VALUE WEB MODEL

System integrators

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Corporate resellers/System Integrators

The corporate resellers or systems integrators generally buy

systems directly from manufacturers and install these systems at their corporate clients. These are firms whose main purpose is to provide customization to their clients.
integrate software, hardware, and network capabilities

Manufacturer

System Integrators

Customer

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Manufacturer

consumer
Manufacturer

commercial

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Particular Component parts

Name of companies Intel(microprocessors), Sony(picture tube),

Third party hardware and software supplier Microsoft

Distributors Retailers

Ingram Micro, Tech Data, Computer 2000, and Santech . Wal-Mart, Office Max, Computer City, CompUSA and Micro-Center Wang, Unisys, and IBM Wang, Unisys, IBM and BancTec

System integration Repair and Support companies

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 Dells model looks surprisingly simple.

Behind this simple model is the complex hard to imitate

core capabilities developed over 15 years.

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Benefits to company by such distribution

CASH: Dell maintains a negative cash conversion cycle

means the payment receive for product before it has to pay for material. COST: 1. Dells direct sales and build-to-order model has achieved superior performance in the PC industry in terms of inventory turnover, reduced overhead, cash conversion, and return on investment 2. Bypassing the reseller channel that causes further cost reduction to company.
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 CRM: Direct customer relationship is the key to Dells

business model, and provides distinct advantages over the indirect sales model. DEMAND FORECAST: Dell additional advantages over indirect PC vendors who must try to forecast demand and ship products based on those forecasts.

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Benefits to customer by such distribution

Tailored offerings from Dell in terms of add-on products

and services. Very customizable systems at an affordable rate, since Dell manufacturing builds specifically for each customer.

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Thank You
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