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Direct from Dell

Direct from Dell. Micheal Dell. Michael Dell. Saw an opportunity and grabbed it Turned a $1000 venture into a multi billion dollar industry. Dell’s Direct Model v1.0. From product development to sales, everything revolves around CUSTOMER Interactions through telephones and Internet

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Direct from Dell

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  1. Direct from Dell Micheal Dell

  2. Michael Dell • Saw an opportunity and grabbed it • Turned a $1000 venture into a multi billion dollar industry.

  3. Dell’s Direct Model v1.0 • From product development to sales, everything revolves around CUSTOMER • Interactions through telephones and Internet • Helped Dell to align production with customer needs

  4. Loyalty is the key • Cannot compete on cost in long term • Highest levels of services needed to sustain customers

  5. Disdaining Inventory • Inventory is the worst thing to carry • Especially in the case of DELL

  6. Order of Business • In 1993, Dell was in a spot of trouble. • Very high levels of growth • Instead of focusing on growth, they changed their priorities • LIQUIDITY  PROFITABILITY  GROWTH

  7. A New Approach • Salesmen were able to see the profit margins on each product • Commissions were based on the levels of profitability rather than total volume

  8. 3 Golden Rules • Disdain inventory • Focus on customer • Never sell indirect

  9. Product Development • Agreement from all departments • Phase review process • Monitor progress

  10. Strategies for Managers • Dual reporting for managers • Segmentation of business units

  11. Dell Direct Model v1.1 • Eliminate reseller • Reduce inventory inefficiencies • Dell keeps inventory of 6 days, compared to competitors of 25 days

  12. Inventory Velocity • Try to cover maximum market by keeping minimum variety • Just in time approach is necessary

  13. More strategies • Information and ideas sharing • Encourage innovative thinking • Don’t try to perfume a pig

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