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Them Gone Essay

739 words - 3 pages

The Power of Virtual Integration: An Interview with Dell Computer's Michael Dell (Summary)
Beginning in 1984 and coming up with a brave new strategic move Dell began distributing personal computers to its customers after managing to bypass the dealer channel. Virtual integration is one of the key factors that helped Dell in succeeding in the business strategically and becoming a 12 billion dollar company in just about a decade. Virtual integration captures detailed information about customers, afterwards it sends that information to suppliers periodically. This makes possible for the company to treat suppliers as inner partners and reach some level of internal coordination that does not ...view middle of the document...

The computer manufacturing industry has not always been the same. Companies that were just founded had to produce everything their final product needed and, as a result, had to become experts in producing a wide range of components that a final product usually used to be consisting of. This usually does not create value for the customer, but increases the price levels significantly. During the years of progress in that area, more and more companies, specializing in manufacturing certain components of a computer began to appear, thus the business sphere became more focused and efficient in its every single aspect. Dell's business model evolved along the years of constant progress. Its model allowed them to build strong relationship with their suppliers and customers so that this relationship could make the company be called a company virtually integrated with both its suppliers and customers. Vertical integration would not make all this success possible once said Michael Dell. In the case of Dell it is clear that there were fewer things to manage, and consequently, fewer things to go wrong. For example Dell was on such a path...

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