Computer maker
Dell is
considering giving up the exclusivity of its direct sales model.
Chief executive Michael Dell said in a leaked internal memo that "the direct
model has been a revolution, but is not a religion", according to reports in
The
Wall Street Journal.
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"We will continue to improve our business model, and go beyond it, to give
our customers what they need," Dell added.
Limiting sales to the web and phone allows Dell to reduce the overheads
associated with retail and channel sales. The model is considered a major
contributor to Dell's success, together with a well co-ordinated supply chain.
But the magic appears to have worn off.
HP has surpassed
Dell as the world's largest PC manufacturer, and Dell earlier this year
replaced chief
executive Kevin Rollins with the company's original founder Michael Dell.
Dell rose to fame building cheap systems, but
Apple and HP
have succeeded in lifting the design of the actual computer to the top of
consumer buying priorities.
Physical appeal, however, requires that shoppers are able to see and feel the
products rather than select them from a catalogue or website.
This increasing need physically to experience new computers prompted Sam
Bhavnani, a research director at
Current
Analysis, to recommend that
Dell add a
retail channel.
Critics have also pointed out that Dell's direct strategy is ill-suited for
emerging markets such as China, where consumers are not used to ordering major
consumer goods online or over the phone.
The leaked Dell memo recommended that the company increase its sales push in
emerging markets, claiming that these are poorly served by existing vendors.
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