Dells Direct Business Model Essay -- essays research papers

Subject Dells Direct Business ModelWill Dells betoken business model embrace 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, building each to order. Dell does not manufacture the computer components they merely entrap computers based on components that are available in the market. Dells use of technology and information to blur the traditional boundaries between suppliers, manufactures, and users is named virtual integration. To come upon 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 gillyflower velocity which is defined as the reciprocal of the average amount of time a product spends in inventory. Accum ulating inventory is the fast wretched PC computer industry is very risky due to the fact that many components quickly become outdated.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 eight days of invento...