Dell Online Manufacturing What is the Dell model

Dell Online • Manufacturing – What is the Dell model? • Pull parts into factory, made to order, cell production – How does it compare to its competitors? • Very efficient – Is there room for improvement? Where? • Routing orders via email and having to direct them to different units was very inefficient ©Prof. Karen Clay

Dell Online • Who are the customers? – Small and large business, individuals, government – Most are in the Americas • What customer segments are likely to offer the greatest opportunities for growth? – Small, fast growing internet companies – Big companies that need lots of servers ©Prof. Karen Clay – Possibly Europe

Dell Online • What are the customers buying? – Desktops, notebooks, servers • What product segments are likely to offer the greatest opportunities for growth? – The server and notebook markets • Server sales up 72% from 3 Q 1998 to 3 Q 1999 • Notebook sales up 55% during this period ©Prof. Karen Clay

Dell Online • Why was Dell Online successful early on? – Natural extension of the business • Customization easier • Offers huge amounts of information • Offers business customers greater speed control, coordination – Low cost way to reach retail and small business market ©Prof. Karen Clay

Dell Online • Did Dell Online give Dell a competitive ‘edge’ over other OEMs? Why? – Is Dell reaching more customers than it otherwise would? – Is it offering first time customers a reason to buy? – Is it offering repeat customers a reason to stay? – What is happening on the cost side? ©Prof. Karen Clay

Dell Online • How important have the relationship pages been? – How do they differ from the personalized pages that Broadvision and others deliver? ©Prof. Karen Clay

Dell Online • How sustainable has the competitive advantage been? ©Prof. Karen Clay

Dell Online • Where does Dell go from here? – Improving the current model • Seamless integration with factory – Using the current model in new locations • Europe, Asia, etc. – Moving into related areas • Servers, now have 25% market share • Internet consulting, web hosting, application service provider ©Prof. Karen Clay