why Dell has been so successful
... its “Direct Model” to take orders directly from customers. As the machines were made on demand of clients, Dell achieved more client satisfaction for the products sold than its competitors. Another advantage of this direct distribution strategy lies in the fact that Dell kept little or no inventory, which has large impact on production efficiency and save the costs of inventory buy-back or of price protection that are usually carried heavily by its competitors with larger inventory. Dell’s successful marketing strategy shows that it understands deeply the customer needs and is positioned comfortably to meet those needs with its competitive prices. Dell targeted its market on large corporations and government institution that accounted for 77% of its sales revenue in 1998. Moreover, the subdivision of its customer into finer categories eased the company to maintain its good customer relationship through Customer Web Pages. It had barely direct competitors in its strategy group because it differentiated from its competitors either by distributions pattern or by its target market, or by its services even if some of its products were overlapped with its rivals. For example, Gateways adopted the same direct distribution model with Dell but target its market primarily on home & small office. As a result, Dell was capable to take control of the bargaining power of its buyers through its market segmentations policy. Another important competitive advantage is the control of bargaining power of its suppliers. For instance, Dell maintained close links with its suppliers and directed some suppliers’ shipments straight to its customers without stocking the parts in its own plants. The co-location strategy with its suppliers improved the efficiency of production. Using just-in-time operation management of its purchase, it whittled its days of inventory down to 7 in 1998, which gave it a finan...