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Dell has been successful due to its differentiated strategy compared to its competitors.
The ?Direct Model? that Dell adopted has been highly successful in reducing its bottom line costs. Comparing the margins in 1994, Dell retail had 7% gross margin and Dell direct 19%; despite higher operating expense in the direct channel overall income was higher through this channel. By reducing the costs of using resellers and distributors, Dell was able to sell at lower prices which were attractive consumers.

Through its direct interaction with customers, Dell was also able to understand the needs of its customers better than the competitors. With this key information Dell subdivided its customers into categories where it could target them with specific products and services which ultimately boosted sales. This market focused initiative with customized products differentiated Dell from its competitors. Dell also tied up contracts with large companies and institution which......

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Approximate Word Count: 669
Approximate Pages: 3 (250 words per double-spaced page)

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