Refining and extending the business model with information technology: Dell Computer Corporation

The exceptional performance of Dell Computer in recent years illustrates an innovative response to a fundamental competitive factor in the personal co mputer industry-the value of time. Tills article shows how Dell's strategie s of direct sales and build-to-order production have proven successful in m inimizing inventory and bringing new products to market quickly, enabling i t to increase market share and achieve high returns on investment, The Dell case illustrates how one business model may have inherent advantages under particular market conditions, but it also shows the importance of executio n in exploiting those advantages. In particular, Dell's use of information technology (IT) has been vital to executing both elements of its business m odel-direct sales and build-to-order-and provides valuable insights into ho w IT can be applied to achieve speed and flexibility in an industry in whic h time is critical. Many of the insights gained from this case can be appli ed more generally to other time-dependent industries, suggesting that the f indings from the Dell case will have implications for a growing number of c ompanies and industries in the future.