Dell changes business model
Dell was a pioneer in the build-to-order way of selling computers. It also had the advantage of selling only by telephone or on the Internet without the costs of a brick-and-mortar store. Dell prospered and became number one in selling PCs. But then Dell stumbled and lost its way. The founder, Michael Dell, came out of early retirement to head his company again and started changing the business model that had once been so profitable. Dell started selling in stores like Staples. And now it is reported that build-to-order is giving way to pre-built products:
Dell Inc. may have made its name building PCs customized to buyers’ specific demands, but the company plans to rely more on pre-built products for future growth opportunities.
The move is part of a large-scale restructuring effort at the PC maker which has seen its business come under fire from strong competition and a cost structure that many analysts consider “bloated,” which has hurt profitability.