Business Model Innovation at Dell

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTA058 For delivery in electronic format: Rs. 500;
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Case Length : 15 Pages
Period : 2004
Organization : Dell
Pub Date : 2004
Teaching Note : Not Available
Countries : Global
Industry : Computer


Dell (formerly Dell Computer) has emerged as one of the leading players in the PC industry through its direct selling model. Dell's build-to- order format has got a big boost with the arrival of the Internet. The company has maintained momentum in a rapidly commoditising industry, where most other players are still struggling. As a cost leader, Dell has concentrated on activities where it can add most value and on market segments where profits are highest. Dell has ensured that customer service is not diluted in the process of cutting costs. Many players in the PC industry have attempted to replicate Dell's business model but failed. It is Dell's disciplined execution that has driven Dell's success. Dell has also demonstrated that it is not R&D spending alone which determines a company's success.

This case can be used to understand how an innovative business model evolves.


  Page No.
Introduction 1
Background Note 3
Operations 5
Globalisation 9
Human Resources 9
Leadership 11
Future Outlook 14
Exhibits -


Dell, Dell computers, Strategy, PCs, Michael Dell, Direct from Dell, Business model innovation, Compaq, IBM, Commoditising industry, Fortune 1000 companies, Customer relations, Cost leader, Build-to-order, Direct selling

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