rs and web hosting companies) Health Care business Government agencies Education facilitiesDell has characterised its relationship with the market segments above under one broad heading that is The Dell Direct Model.The Dell Direct ModelThis model involves several factors namely: Build to order manufacturing Low cost high speed distribution and procurement system Direct relationship with customersThese three factors are essentially the backbone of Dells operations and the means through which the organisation is able to differentiate itself from competitors, therefore sustaining a significant competitive advantage. Dell is the entire distribution channel from the procurement to the delivery of the finished product/service to the consumer. By eliminating the middleman in the supply chain Dell is able to exert greater control over cost and quality in the product and the efficiency of the lead-time. The organisation realises that each of its market segments has different characteristics – different support costs, margins, levels of investment and capital growth. Dells Direct model has brought about the following advantages: Tailored support needs and services for each market segment, there by avoiding the cost associated with the traditional distribution channel. There is no wholesaler or retailer support cost to bear, only customer support costs. As a result of not using a traditional distribution channel of manufacturer –wholesaler –retailer, Dell does not have to contend for shelf space for its products. Building to order means that the organisation operates on just eight days of inventory, if at all any. This is significantly advantageous in a dynamic technology industry. By having a limited stock of goods Dell reduces the risk and cost of associated with products becoming obsolete. Thereby, providing customers with the most up to date te...
