Dells Direct Business Model Essay -- essays research papers

Subject Dells Direct Business fashion modelWill Dells direct business model continue to provide a competitive advantage as fellow competitors Compaq, IBM, and HP emulate Dells direct model? Dells direct business model bypasses the dealer in the supply chain and sells computers directly to customers, structure each to target. Dell does not manufacture the computer components they merely assemble computers based on components that are available in the market. Dells intent 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 Dells system and their employees participate in design teams and product launches. Dell measures inventory velocity which is defined as the joint of the average amount of time a product spends in inventory. Accumulating inventory is the fast moving PC computer industry is very risky payable to the fact that many components quickly become outdated. In 1998 Compaq, IBM, and Hewlett-Packard all announced plans to mimic portions of Dells direct business model, with various build to order plans. All have had difficulty in making the transition. These companies are moving towards a target inventory level of four weeks, conversely, Dell maintains just cardinal days of invento...