5/21/2007

Dell goes Retail?

Micheal Dell says, "Direct Marketing is a revolution, not a religion". For a company that had fostered a revolutionary business model in the computer industry, and a very successful one (for it atleast) to say this is a BIG thing.

What happened to the business model that they worshiped for almost 20 successful years? Personally, I don't think there was anything wrong with it given the fact that it gave customers customizability and configurability that was unmatched by competitors. They have been market leaders for the last many years, till recently when their woes started pouring in the form of battery recalls, laptops bursting into flames, SEC inquiries. At the same time HP has been doing great and has been continuously eating into Dell's market share.

Dell's latest act almost seems like an act of desperation, a need to garner more visibility and a means to take on competitors head on in their own space. Dell might come out with it's own retail outlets like what Apple has or just sit side by side on a BestBuy shelf along with the HP's, Sony's etc...whatever it is, I think it will be a good move for Dell. If it can contain costs and still sell for the same price on the shelves, it can beat the punch out of the competitors...sometimes, being pushed into a corner brings out the best in us...hope that it does that for DELL!

4 Comments:

At 2:33 PM, Anonymous JohnP@Dell said...

Hi VC --

As a member of Dell's digital media team, I enjoyed reading your perspective on the company and some of many things we're doing to complete our turnaround. Indeed, there will be some interesting news over the next several quarters as our retail strategy, an agressive one, BTW, unfolds in the US and other major countries. We are certainly not backing away from our direct business model. As Michael Dell explains it, we have two separate business: direct and indirect. Both will be integral to supporting a wider range of choices for our customers.

 
At 2:21 PM, Blogger Vijay Challa said...

Cool..what I would ideally like to see are Dell Kiosks in their retail stores/ Best Buy kinds that would allow users to configure their computers themselves apart from having some models "in stock". Dell has been the leader for quite some time..so it can pull details about what the "standard" configurations are and have them stocked in the retail outlets....
Dell has everything in place to enable this...just needs the right front ends, points of sale :)

Ofcourse, it can do bring the heat onto the competitors and take it away from the customers ;)

 
At 2:26 PM, Blogger Vijay Challa said...

Meant ...

Dell can "do better" by bringing the heat onto it's competitors and taking it away from it's customers..

 
At 8:39 AM, Blogger Vijay Challa said...

Good news! They will be selling in Walmart..the electronics section in Walmart has recently been buzzing with a lot of activity...in the walmart near my apartment, that section is always the busiest!!!! Good move Dell.

 

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