Of all the companies in the computer sales arena, few are as storied
as Dell Computers. In just twenty years, the founding of Dell has become
the stuff of IT industry legend. Started by university freshman, Michael
Dell, in 1984, the Texas company is now one of the largest sellers of PCs
and hardware in the world, with more than 40,000 employees. This success
is based on a "direct-to-consumer" model that skeptics claimed could never
work in the computer sales industry.
The direct model of computer retailing involves selling Dell products
(primarily PCs, but increasingly other products as well) directly to the
end consumer. This consumer targeting has led to an extremely efficient
organization with near record growth since its founding.
Frequently compared to another customer-oriented retail giant, Wal-
Mart, Dell Computers has claimed such a large market share of PC sales by
reducing costs through the supply chain and passing on savings directly to
the customer. Their direct model also allows consumers to customize the
product they order to suit their particular needs. "While other companies
had to guess which products their customers wanted, because they built them
in advance of taking the order, we knew." (Dell, 1999).
When Dell entered the market in 1984, their focus was selling
customized PCs to large corporate, government and educational account.
This target market has grown to include individual users and the products
offered now include printers, storage, PC peripherals such as projectors
and PDAs, and a recently-launched consumer electronic branch.
Additionally, Dell has a service component that advises companies on
"Dell is the master of selling direct, bypassing middlemen to deliver
PCs cheaper than any of its rivals." (Park & Burrows, 2003). The direct
model of retailing employed by Dell has several advantages that have helped
the com...