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DELL
Strategic Objectives
Vision: Dell believes that its direct model based on an e-business platform is applicable
everywhere and for any customer.
Mission: We make computing easy. We do business directly with customers, one at a
time, and we do it better that anyone in the world.
Objective: Being the premier provider worldwide of computing products and services
using our e-business direct model.
Business Model
Computer Industry Business Model before Dell (Build-to-stock model)
Dell E-Business Model (Build-to-order model)
Dells direct model is based on a break through thinking for computer industry that is
creating a customer-led process where computers are built after the order has been
processed through the internet. Key advantages of this e-business model are:
a) Products are customized;
b) Inventory levels are very lower;
c) No components technological obsolescence.
- Less fixed costs spent in distribution/warehouse centers
All the above advantages come from substituting physical products with information
traveling on an e-business platform.
Dell as Virtual Networked Company: the Strategic Symphony.
A key feature of Dells e-business strategy is its extreme outsourcing that make
fundamental the tight organization among Dell and all its partners both upstream (i.e.
processor manufacturer) and downstream (i.e. after-sale service providers) and the flow
of information which is granted by Dell e-business platform.

E-procurement
Dell has signed an agreement with Part Miner (http://www.freetradezone.com/) which is
a vertical portal in electronic components industry, providing info and making meet the
demand and supply of these components
E-supply-chain
Dell cost strategy asks for an efficient management of its global supply chain. We said
global because Dell needs to exploit location economies and spot best technologies on a
global basis.
The above objectives have to be achieved by minimizing the lead-time to market and
having close relationships with key suppliers worldwide. Dells strategy has been to
transform all the traditional processes in electronic-digital format so that the flow of
information is ubiquitous within any Dells department or divisions and within any
partners department. Dell has built a total Virtual Supply Chain (VSC).
E-logistics
The traditional approach was:
1. Picking up components from suppliers warehouse;
2. Then collecting them in central or regional Dells distribution centres;
3. Finally merge the components in stock to deliver the final product to customers.
Thanks to its e-logistics platform Dell now is able to:
1. Picking up components from suppliers warehouses;
2. Leave the merge of components made during the transit by logistic-service providers
(either USP or Airborne Express).
E-marketing
Dell sends regular e-mails concerning new product launch and promotions only to those
customers by whom it had the permission to do it
E-Database Marketing and E-segmentation.
Dell currently uses a database software called Interactive + Marketing (by Tocquigny
Advertising) that allows a much better profiling though direct marketing activities carried
out on the internet. This best practice has allowed a much better segmenting than offline approaches.
E-crm
Premier Pages.
Key accounts can access these intranet customized pages and ask their product technical
features without making the usual phone call; it is fast, easy and cheap.
Resolution Assistant.
Dell Online Community
Suggestion:
When key competitors will play the same e-game (HP and IBM have just start doing it
according to McKinsey), it will happen that Dells e-business operational advantages will
disappear and the winners will be those able to differentiate themselves.
Dell needs to improve its product differentiation by:
- Controlling R&D patents in key industry technologies, thus abandoning its extreme
outsourcing and standardization strategy;
- Introducing innovative services (so far it has launched standard services based on
software packages of which it does not have any patent).