Business Model Case Study

Dell's Business Model: Is it Time to Reinvent?

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Abstract:
Dell Inc. has become the world's largest PC manufacturer through its direct selling business model. Despite criticism and skepticism about its business model, it has enabled the company to revive and reinforce its market leadership on different occasions. However, during FY 2005-2006, Dell missed its own revenue projections for two consecutive quarters. This has raised concern among analysts about the viability of Dell's business model in the maturing PC industry and whether Dell would be able to sustain its sales growth

Pedagogical Objectives:

• To understand the direct selling model of Dell and identify the key drivers of the model that have enabled Dell to become the leader in the global PC industry
• To discuss the limitations associated with Dell's direct selling model
• To analyse the possible reasons behind Dell missing its revenue forecasts
• In the light of impending challenges, to debate whether it is time for Dell to reinvent its business model

Keywords :  Competitive scenario of the global Personal Computer (PC) market; Dell's direct selling model; Dell's strategies to keep costs low; Dell's business model vis a vis other PC makers; Growth of Dell; Dell's business challenges; Managing in Troubled Times Case Study; Dell's logistics management; Dell's supplier management; Dell's support centres across the globe; Dell's leadership in the global PC industry; Dell's competition with Lenovo; Dell's business strategy for retail customers