Dell
Dell's direct model 'is not a religion', according to founder Michael Dell

Dell looks beyond direct sales

Vendor desperate to catch up with Apple and HP

Written by Tom Sanders in California

Computer maker Dell is considering giving up the exclusivity of its direct sales model. 

Chief executive Michael Dell said in a leaked internal memo that "the direct model has been a revolution, but is not a religion", according to reports in The Wall Street Journal.

Advertisement

"We will continue to improve our business model, and go beyond it, to give our customers what they need," Dell added.

Limiting sales to the web and phone allows Dell to reduce the overheads associated with retail and channel sales. The model is considered a major contributor to Dell's success, together with a well co-ordinated supply chain.

But the magic appears to have worn off. HP has surpassed Dell as the world's largest PC manufacturer, and Dell earlier this year replaced chief executive Kevin Rollins with the company's original founder Michael Dell.  

Dell rose to fame building cheap systems, but Apple and HP have succeeded in lifting the design of the actual computer to the top of consumer buying priorities.

Physical appeal, however, requires that shoppers are able to see and feel the products rather than select them from a catalogue or website.

This increasing need physically to experience new computers prompted Sam Bhavnani, a research director at Current Analysis, to recommend that Dell add a retail channel.  

Critics have also pointed out that Dell's direct strategy is ill-suited for emerging markets such as China, where consumers are not used to ordering major consumer goods online or over the phone.

The leaked Dell memo recommended that the company increase its sales push in emerging markets, claiming that these are poorly served by existing vendors.

Tags:

Related whitepapers

Related jobs

Do you agree?

IT white papers

Search vnunet IThound

Top categories

Job of the week

Search thousands of IT jobs :

Search thousands of IT jobs:

Advanced search

Hiring now on ComputingCareers:

Related IT jobs

Search thousands of IT jobs :

Search thousands of IT jobs:

Advanced search

Advertisement

Advertisement

Newsletter signup

Sign up for our range of FREE newsletters:

Existing User

Newsletter user login:

Enter email address to edit your newsletter preferences

Watch

Shaun Nichols

19 Dec 2008

2.93 MBPodcast Special: Views from the Valley More...

Podcast image

18 Dec 2008

17.6 MBComputing podcast - the highlights of 2008 More...

Shaun Nichols and Iain Thomson

15 Dec 2008

4.98 MBPodcast Special: Views from the Valley More...

Poll

All I want for Christmas is...

All I want for Christmas is...

What would you most like to find in your Christmas stocking this year?

Previous poll results

Spotlight

Parliament

UK government to outsource internet tracking

Private firm will monitor all emails, calls and internet use   More...

Dell

Two execs out in Dell reshuffle

Company trims ranks as reorganisation continues   More...

Rosalie Marshall

vnunet.com debrief: 2008 round-up, part two

Part two of our look back at the top stories...  More...

Firefox

Mozilla breaks 20 per cent market share

Bad month for Microsoft and Google   More...

Primary Navigation