In 1997 this Texas based company was converting every $1 invested into $1.54 - well ahead of IBM who could only offer $0.47. (McWilliams, 1997). Today (2006-02-17) it's stock opened at $31.99 with almost 40m trades.
In his book Direct From Dell Michael Dell describes his moment of epiphany. In the first 6 months of 1993 the company made a $65 million loss from inventory write-downs partly due to an industry wide price war started by Compaq. At this time it had moved from its original direct sales model to a retailer model (Kraemer and Dedrick, 2001).
Dell subsequently returned to a business model for minimizing inventory and maximising return on investment. Dell complemented this with its vision of a 'virtually integrated business' in which information is more important than assets. Dell used the Internet to bring customers and suppliers into the business. Dell already provided its clients and partners with a time-conscious, customer-centric approach. It was this low-cost, fast-paced customer-centric business model philosophy which Dell translated to the Internet and which ultimately led to increased dividends and market share.
This is the key point; it is not enough simply to add technology - it must be evaluated to ensure that poor processes and practices are not replicated. ...Show more