In traditional digital equipment of the world, they have no choice but to build massive
structures to produce everything a computer needed. As the industry grew, more
specialized companies developed to produce specific components. Its a pretty simple
strategy, but at that time it went against the dominant.
In Traditional Business Model we can use following flows to describe the relationship
beyond different partners and the information flow and physical goods also follow the
same route.
* Suppliers > Manufacturer > Distributors > Customers
In Dell Business Model
The direct model has allowed Dell to leverage their relationships with both suppliers and
customers to such an extent that the company is being virtually integrated. That allows
they focus on where they add value and build a much larger firm much more quickly. They
focus on how we can coordinate operation activities to create the most value for customers.
The whole idea behind virtual integration is that it lets you meet customers need faster and
more efficiently than any other model. Virtual integration lets you be efficient and
responsive to changes at the same time. Dell use Technology to reduce the layers of supply
chain, from telephony to Internet web technology. Dell pursuit the customers or Suppliers
could use Internet to do business with Dell directly. The Dell business model can produce
the efficiency on information flow and logistic through Build to Order.
