Dell Company’s Successful Business Model Implementation

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Table of Contents

Introduction
Ideation Process
Industry Analysis
Environmental Scan
Works Cited

Introduction

According to Osterwalder and Pigneur, a business model “describes the rationale of how an organization creates, delivers, and captures value” (14). Dell is one of the biggest multinational companies with 165th place in the ‘Global 500″ ranking (Dell’s Competitive Advantage & Strategy par. 1). One of the factors for the success of the company is the implementation of a direct sales business model. Direct selling together with building relationships with suppliers allow the company to regulate the correlation of demand and supply efficiently. However, with the development of the portable computer market, Dell lost its positions. The corporation had to improve its business model and shifted attention to “personalized and remote” customer services and introduced social media to its direct sales model (Dell’s Competitive Advantage & Strategy par. 27). In addition to traditional business strategies, Dell needs more investments in innovative technologies and learning to provide sustainable development of the company and its competitiveness in the market.

Ideation Process

Ideation is one of six business model design techniques. It is usually treated as “a creative process for generating a large number of business model ideas and successfully isolating the best ones” (Osterwalder and Pigneur 136). Dell, similarly to other companies, included ideation into its innovation processes. One of its aspects is crowdsourcing which makes the ideation process at Dell corporation customer-driven (Bayus 226). A method of generating ideas on open innovation platforms involves customers and other stakeholders in the process of the company’s innovative development (Hossain and Islam 613). However, discussions on such platforms need to be directed to result in ideas that can be implemented. A disadvantage of this approach is that it demands many resources from the team managing the platform.

Moreover, only three percent of such ideas are usually implemented (Hossain and Islam 620). Nevertheless, the IdeaStorm Platform managed by Dell is a tool that empowers communication with customers. It provides an opportunity to “understand various issues related to customers’ ideation and idea commercialization” (Hossain and Islam 620). For example, the ideas suggested at the platform and already implemented into practice include investment in mini projectors, children’s PC, rugged laptop for marine use, etc. (Bayus 228). Moreover, the ideas of preinstalled Linux, Ubuntu, or Fedora and multitouch screens were partially implemented, and more ideas are waiting for analysis and evaluation. Dell’s ideation process based on an online open innovation platform is still at an early stage but can become a powerful resource in the future.

Industry Analysis

Dell has been among the leaders of the PC industry for decades. Its outstanding supply chain management, focus on innovations, and direct business model provided the leading positions. After losing some market share, the company shifted its focus on the customers that led to sales improvement. Dell Corporation as an industry can be assessed based on Porter’s Five Forces Analysis (Pratap). The threat of new entrants in the PC market is not significant at the moment. Thus, Dell as a reliable brand has conditions for sustainable development. As for the bargaining power of buyers, it is evaluated as low to moderate (Pratap par. 5). It is conditioned by the fact that there are few powerful players in the PC market. The bargaining power of suppliers is also weak. It is the result of a big number of suppliers compared to the number of manufacturers. The threat of substitutes for Dell is moderate while the degree of rivalry in the industry is high.

Environmental Scan

All big corporations are expected to be environmentally concerned. Since industries usually have a negative environmental impact, attention to these issues is a demand of time. Dell states that thinking about environmental impact is a part of the company’s policy (Environment par. 1). First of all, the company focuses its attention on producing ecologically friendly goods. Moreover, Dell is known for its sustainability efforts. They are realized in the design of products, recycling, and other aspects. One of the company’s concerns is the reduction of its impact on the environment through the effective use of resources and waste management. Green packaging and shipping is another aim of the company together with involving recycling technologies for Dell products and packages. Apart from preventive efforts, Dell already fights the pollution by removing plastic from the waters and using it as material (Environment par. 7). Thus, it can be concluded that Dell is an environmentally responsible company that also contributes to its image.

Works Cited

Bayus, Barry L. “Crowdsourcing New Product Ideas over Time: An Analysis of the Dell IdeaStorm Community.” Management Science, vol. 59, no. 1, 2013, pp. 226-244.

“Dell’s Competitive Advantage & Strategy.”ToughNickel. 2015, Web.

“Environment.” Dell, Web.

Hossain, Mokter, and K.M. Zahidul Islam. “Ideation through Online Open Innovation Platform: Dell IdeaStorm.” Journal of Knowledge Economy, vol. 6, no. 6, 2015, pp. 611-624.

Osterwalder, Alexander, and Yves Pigneur. Business Model Generation. John Wiley and Sons, Inc., 2010.

Pratap, Abhijeet. “Porter’s Five Forces Analysus of Dell Computers.”Cheshnotes, Web.

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Dell Company’s Successful Business Model Implementation

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