©Prof. Karen Clay Dell Online Manufacturing –What is the Dell model? Pull parts into factory, made to order, cell production –How does it compare to its competitors? Very efficient –Is there room for improvement? Where? Routing orders via and having to direct them to different units was very inefficient

©Prof. Karen Clay Dell Online Who are the customers? –Small and large business, individuals, government –Most are in the Americas What customer segments are likely to offer the greatest opportunities for growth? –Small, fast growing internet companies –Big companies that need lots of servers –Possibly Europe

©Prof. Karen Clay Dell Online What are the customers buying? –Desktops, notebooks, servers What product segments are likely to offer the greatest opportunities for growth? –The server and notebook markets Server sales up 72% from 3Q 1998 to 3Q 1999 Notebook sales up 55% during this period

©Prof. Karen Clay Dell Online Why was Dell Online successful early on? –Natural extension of the business Customization easier Offers huge amounts of information Offers business customers greater speed control, coordination –Low cost way to reach retail and small business market

©Prof. Karen Clay Dell Online Did Dell Online give Dell a competitive ‘edge’ over other OEMs? Why? –Is Dell reaching more customers than it otherwise would? –Is it offering first time customers a reason to buy? –Is it offering repeat customers a reason to stay? –What is happening on the cost side?

©Prof. Karen Clay Dell Online How important have the relationship pages been? –How do they differ from the personalized pages that Broadvision and others deliver?

©Prof. Karen Clay Dell Online How sustainable has the competitive advantage been?

©Prof. Karen Clay Dell Online Where does Dell go from here? –Improving the current model Seamless integration with factory –Using the current model in new locations Europe, Asia, etc. –Moving into related areas Servers, now have 25% market share Internet consulting, web hosting, application service provider