This was the actual birth of the company and it was from here that Michael Dell moved on to build one of the world’s largest PC manufacturing companies. Dell at present holds as much as 13.2% of the total markets of the world, however the company has slipped down from its major position in the market over the past few years (Krangel, 2009).
Dell uses a business model which is direct and very transparent and simple. The company’s business model is one which is focused on better execution and minimum inventory. Considering the various attempts in the markets where companies try and imitate other companies it has been noted that in the case of Dell this has not been the case (Liker, 2003). There are several underlying reasons for the fact that other companies do not imitate the products of Dell and these have been discussed as below:
a) Economies of Scale: Dell has over the years been able to develop the operations to a level where the company faces Economies of scale. The term Economies of scale refers to the advantage that a company gains with the expansion of its business. This is an microeconomic theory and here the businesses are faced with a reduced costs in terms of per unit when the scale of production increases. The concept is a long term concept and is based on the level that businesses reach over years. Dell started with a very small operation however over the years the company has been able to gain a major part of the markets and by doing this the company has been able to also reduce the costs that they incur in terms of each unit of production. The company has built a strong image for itself and a strong level of suppliers across the world within each of the local markets.
b) Highly Effective and Efficient Processes: Dell’s overall processes are very effective and efficient. Here the company has been able to follow a business