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Dell rethinks direct sales strategy

Posted on Thursday, May 03 2007 @ 03:45:45 CEST by

Last week Michael Dell said he's now thinking about changing the way Dell markets its computers. Dell is known for only doing direct sales to customers but last week Dell said "The direct model has been a revolution, but it is not a religion".
It is the first time that Mr. Dell or any other senior executive has publicly conceded that the business model that was crucial to the company’s success could — and should — be altered. Until now, the company responded with an adamant no when Wall Street analysts or customers asked whether the company would consider other ways of selling.

While Mr. Dell’s memo was short on specifics, he also told employees, “We will continue to improve our business model, and go beyond it, to give our customers what they need.”

As Dell faced slower sales and increased competition, it experimented with minor variations of the model. For example, late last year it opened a showroom in a Dallas mall that displays, but does not sell, computers, printers and TVs. The products still had to be ordered for delivery.

Mr. Dell took back the responsibility of running the company in late January in an effort to reinvigorate slowing sales. He put a new management team in place with some promotions and by hiring from outside. And while he encouraged employees to start thinking of new ways of doing business, he stopped short of discussing the basic business model.
More info at NY Times.



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