Case Study: Business Model Innovation and Customer-Driven Innovation at Dell

Dell Computers have been the leaders in computer world for more than two decades. Dell has been empowering countries, communities, customers and people everywhere to use technology to realize their dreams and possiblities. Since the first Dell PC was introduced in 1986, Dell has continued to shape the industry by breaking new ground and pioneering critical developments in home, small business and enterprise computing. The Dell business connects with more than 5.4 billion customers every day with earnings of $14.9 billion comprising a net profit of $584 million. Dell’s continuous research and development (R&D) have proven efforts to reach the globe, which is driven by some of the industry’s foremost product designers and engineers. The core of Dell computers is always been in innovation approach with a commitment to deliver new and better solutions and technologies that fulfills and meets demands and customer needs.

Business Model Innovation and Customer-Driven Innovation at Dell

They accept Partnerships with varied industry such as software, hardware and component suppliers and by generating a uniquely broad perspective on the computing world and the accessories. Dell believes in innovations which begin in-house supported by global team of top engineers, product designers and technical experts. Along with a team effort with Dell’s strategic partners to formulate and implement the different strategies. Their mission is to deliver innovative and cost-effective solutions that meet today’s customer requirements and innovative work seamlessly is carried out in existing environments and their products.

Dell is uniquely positioned into the market which has a strong impact of and on the industry trends. They maintain strong internal and in-house development capabilities. They have a strategy to be partners, rather than to compete, with top technology suppliers and manufacturers. They enable industry standards and technologies through industry groups and strategic partners. In such a way Dell innovates and delivers value and needs of customers.

Business Model Innovation at Dell

Michael Dell did not devise the laptop computer, but he did invent a new business model for the industry: Build computers to order and fill orders by operating a highly automated and digitized supply chain. IT is the great enabler of these changes. Dell saw the disorganization in the computer industry and found a new way of producing profits.

IT managers are well positioned to confront conventional ways of doing business. There are ways to consolidate operations and reduce inventory to redeploy capital to growth opportunities. It will help business processes and also customers be linked to reduce errors and increase the speed at which orders are filled and problems solved. This is a radical approach for Dell — a new way of operating and dramatically lowering the costs of doing business.

To deliver effective solutions that meet customer challenges, Dell concentrates on pivotal standards that drive future technology innovation. Dell’s industry leadership places it in a unique position to help set up the core building blocks for the future innovation – in the home, the office and the enterprise. With a long track record of pioneering work and wide network of strong industry alliances, Dell can drive implementation of open standards that give customers more choices, lower costs and complexity, and interoperability.

Working collaboratively with foremost suppliers and standards organizations, Dell has driven standards that not only benefit customers, but often result in industry-changing developments such as:

Focus On the Best Solution, not the Best Technology: Dell really a superb product integrator and also tremendously good sales-and-logistics company. As Fortune magazine wrote: “A Dell mantra is that today’s technology is tomorrow’s commodity. Dell waits until the cost of that technology falls low enough for it to be stuffed into computers at state-of-the-art factories and then sold direct at a cheap price, which allows the company to drive for share.”

Teaching Innovative Thinking: Michael Dell says “It is really dangerous if everyone in a company starts thinking the same way. The danger comes when you fall into the trap of approaching problems too similarly. You can encourage your people to think about your business, your industry, and your customers innovatively.” By approaching a problem, a response or an opportunity from a different outlook, you create an opportunity for new understanding and new learning. By questioning all the aspects of our business, we continuously bring in improvement and innovation into our culture. How can we teach people to be more innovative? Ask them to approach a problem in a holistic sense.

Customer-Driven Innovation at Dell

Dell has continued to provide distinctiveness to the industry, giving new products, pioneering critical developments and innovations in home, small business and enterprise computing. Dell’s R&D efforts now extend to all over other industries, driven by some of the industry’s leading product designers and engineers. The focus point of Dell’s innovation approach, however, remains an unwavering commitment to delivering new and better solutions that directly address customer needs. Dell start their innovation process with asking their customers, “What would you really want this thing to do? Is there a different way to accomplish that?” Then they meet with their suppliers and ask, “Can we do this in a different way?”   Then they try to come up with a totally different approach that exceeds the original objectives. To constantly bring information from the outside world into Dell, with an eye towards staying as competitive as they can, Michael Dell employs a range of innovative approaches. He says, “I also enjoy roaming around outside the company to see what people think of us. On the Web that is best platform to get feedback through communities at Facebook, Twitter etc, nobody knows I’m a CEO. I’ll hang out in chartrooms where actual users commonly chat about Dell and our competitors. He listens to their discussions as they talk about their purchases and their likes and dislikes, this is a wonderful learning opportunity and also getting Feedback from Customers and Suppliers

Listen: Dell understands the necessity directly through tens of thousands of customer interactions, organized events, social media venues such as Ideastorm, communities and customer panels. Partnerships with a wide variety of key industry software, hardware and component suppliers give them a unique viewpoint on Dell future products and Services.

Solve: Many innovations commence in-house, led by a global team of top engineers, product designers and technical experts. Others begin as a team effort with Dell’s strategic partners. The mission is to deliver innovative and cost-effective solutions that meet today’s real-life customer challenges and work seamlessly in existing environments and with other products.

Impact: Dell is uniquely positioned to impact industry trends. We maintain strong internal development capabilities. We associate, rather than compete, with top industry technology suppliers and original development manufacturers. We steer enabling industry standards and technologies through industry groups and strategic partners. In this way, Dell spurs innovation and delivers value to customers.

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