Dell Company Business Model

There is no use denying the fact that technologies and different digital devices play very important role nowadays. People accustom to the comfort and wide range of possibilities which the usage of devices of this sort provides. With this in mind, it is possible to say that there is a great number of different companies which try to fulfill the need of people in these technologies.

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Moreover, because of the high level of rivalry companies try to find a certain business model which will be able to guarantee success and make company beneficial and recognizable for people to buy its products. Dell company is one of them. With this in mind, it is possible to analyze the main aspects of its functioning in order to understand its business model and perspectives better.

The company was founded in 1984 by Michael Dell, while he was just a student. The beginning of his business was quite simple. Having no money for blistering start, he just bought computers at local sellers, added several unusual features to them, such as extra memory or additional disk drivers and sold them with the help of his car.

In such a way he managed to earn a certain sum of money which allowed him to hire few friends and place advertising in a newspaper. This event can be taken as the start of the whole Dell company. The first annual income was about 600,000 $ and it was just the beginning (Wheelen, Hunger, Hoffman and Bamford 32-1).

It is obvious, that such tempos of development guaranteed great success of the company. By 1995 Dell became one of the most popular and efficient PC sellers in the world with sales over 3,5$ billion (Wheelen, Hunger, Hoffman and Bamford 32-1). Dell Inc started to offer some additional services and became one of the most beneficial companies in the world. However, it should be said that increasing level of competition and the world financial crisis stroke the company and recession in it incomes could be observed.

First of all, it should be said that one of the main reasons of Dell company’s problems was its blistering growth. The company increased its incomes twice and it resulted in the appearance of disorganization. It was rather difficult to organize sells and mange company efficiently at the same time, that is why, even the help of a specialist, who replaced Michael Dell was needed to align the mechanism of distribution of Dells goods and products.

It should also be said that the business model of the company was rather simple. Dells computers were made to order and delivered directly to the customer without any distributors or retail stores. It is obvious, that with the development of the company some extra facilities became needed and, that is why, factories were opened in Asia and Mexico. However, the model remained the same as all other models turned out to be less efficient. Additionally, some new products were introduced to the markets.

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These products were printers, software and different kinds of services. Moreover, a company was reorganized into four units which became Large Enterprise, Public, Smal & Medium businesses and Customer. (Wheelen, Hunger, Hoffman and Bamford 32-3). These changes were needed to replace the old system and try to improve the whole state of the company. Remaining the main manager, Michael Dell tried to find new ways and methods which would be able to make his company beneficial..

However, nowadays the company continues to suffer from the aftermath of crisis and the level of its incomes significantly decreases. In response to this tendency the company applied several strategies which main aim was to stop decline and promote further development of the company. First of all, a decision to create and distribute new products was accepted.

Additionally, within the framework of the world crisis Dell Inc. also added some changes to its image as it stopped to be the company which provides high quality and expensive goods for customers changing its priorities to economy. However, this step should be doubted. Being the CEO of the company, it is possible to say that return to the previous image of the company is needed.

There are several reasons for this step. First of all, it should be said that chosen strategy, which main aim is to make Dells products cheaper and, as a result more affordable for a mainstream audience, turned out to be inefficient. Companys customer service rating fell to a score of 74 while the number of complaints connected with the quality of goods increased (Wheelen, Hunger, Hoffman and Bamford 32-5). This tendency has a pernicious influence on the whole image of the company.

For years people have been associating Dell products with the high quality and reliability. That is why, its image was recognizable and popular. Additionally, this feature helped to differentiate Dell company from the rest of the manufacturers. However, new policy shifted priorities. Nowadays. Dell became one among many manufacturers which work with digital devices. That is why, one of the first strategic steps to improve the state of the company should be return to its recognizable and clear image.

People should associate Dells products with quality again. There are several ways to do it. First of all, a company should return to the quality standards which were peculiar to it even several years ago. It will obviously increase the cost price and make the final price higher. However, it is possible to suggest that this step can be rather beneficial. This change will result in the increase of quality of Dells products which, in its turn, will help to return the company its image.

It is also obvious, that Dells products will be not such affordable as they used to, however, the change of the targeted audience will bring benefits to the company. Dell computers could be presented as unique devices for people who could afford and buy them. With this in mind, it is also possible to say that a good advertising company is needed.

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Nowadays, Dell company has lost its unique status. That is why, the main aim of the company should be to renew it, outlining the fact that the company returns to its old values preferring quality to quantity and making digital devices for people who could afford them. The brand should become one of the main elements of the image of a successful person. Under these conditions, a company will be able to become beneficial again and continue its further development.

With this in mind, having analyzed the main aspects of Dells business model, it is possible to make certain conclusion. Having started as the manufacturer of outstanding digital devices, Dell company managed to win the market. That is why, nowadays, return to the company’s roots is needed to increase the level of its incomes.

Work Cited

Wheelen, Thomas, David Hunger, Alan Hoffman and Chuck Bamford. Strategic Management and Business Policy: Globalization, Innovation and Sustainablility. New Jercey: Prentice Hall, 2014. Print.

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