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DELLdirectbusinessmodel background 1 DellComputerwasfoundedasPC sLimitedin1984byuniversitystudentMichaelDell 2 By1991 sevenyearsaftersellingit sfirstcomputer DellComputerCorporationwaslistedintheFortune5003 Withmuchexperienceinmailordertelephonesales DellwasoneofthefirstcompaniestooffercomputersformailorderviatheInternet TheDellCouponprogrammademanyInternetmodelscheaperthanotherbrands andcontinuestobepopulartothisday 4In1998 starttointroducethe direct modelintoChina andquicklybecomeChina slargestinternationalcomputerbrand Themainproducts DirectBusinessModel 1zeroinventory2In timeproduction3Productionorders DirectBusinessModel Directbusinessmoderndon thavemiddlebusiness sotheycansavealotofsalescost Foundaprofessionalsalesgroup thesemembershavemoreproduct sknowledge theycanmakepromisewithclientDirectcontactwiththeClient DELLcandirectlygettheinformationabouttheproductserviceandcompetetion Process SparePartssuppliers dell Advertisingcompany Transportationcompanies Servicecompanies RepresentativeOffice Client Advantage 1 Reducethestoragecostsandinventorymanagementworkerssalary2Reducinginventory moreflowcapitalcanusedwithinvestmentinotherwaysorusedforscientificresearch3Toavoidalargebacklogofoutdatedproductscausedasaresultoftherapidchangesinthetechnologymarket theprovisionfortheinventory ImpairmentOfAsset Measure Onlybuildacloserelationshipwithafewandsupplierandshareimportantcustomerandeveryproductioninformationwiththem DELL ssuppliersstrategy SuppliersoftennearlybyDellfactory ortheycannotbetheDellsupplier ByDellwebsiteDELL COM suppliersandDellvirtualsynchronizationSupplierscangettheprofittotal3 5 fromDELL Quicklysatisfiedthedemandofcustomers Inordertoavoidcustomerwaitinganddeliverytimedelay Dellhasestablishedapowerfulorderprocessingandcustomerservicesystem Ensureproductionrunningsmoothly theimplementationofcomprehensivequalitymanagement Routinemaintenanceofproductionlines trainingofskilledworkersoperatingmachineryandequipment Also theprogressinproductalsohavesomeproblem forexample 1Shutdownproblemmeasures makethegoodrelationshipwiththesupplerandensurethequalityofsupply 2DiscountandpricesproblemMeasures ascloseaspossibletocontactwiththefewofsupplier Makethelong termcontractstohelpreducethecostofordering Directbusinesscost First directbusinessmodernspentmostadvertisingoverhead becauseithaslessopportunitytocommunicatewithcustomerandmostsalesnetsit sodirectbusinessmustincreasepropagateontheotheraspect althoughDELLdon thavethemiddlebusiness theycansavemoresalescost but infactcompanyfirstlymusthaveahugeandcomplexglobalinformationsystem includingfreefaxandcall forexample everydayDELLmustdealwith50 000callfromcustomer atthesametimetheymustbuildaexcellentsalesandservicedgroup NextcomparewithnormalPCfactory theyneedmorestrongplanandtrainninginvestmentandmanagementability andthisisamountofcost Zeroinventoryapp
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