When it comes to manufacturer direct business models, Michael Dell wrote the book.
Starting from his college dorm room, Dell built a PC empire built on direct sales, custom configuration, domestic assembly, competitive prices and service, service, service. The formula helped build the 22-year-old business into an $8 billion dynamo that surpassed its competitors to become the No. 1 supplier of PC systems worldwide in 2005.
To help boost margins, the company added digital cameras, private label MP3 players and flat-panel TVs, and installation and IT services to its offering, and last spring acquired high-end gaming PC maker Alienware. More recently, Dell has streamlined its Web site and begun paring back its dizzying array of rebates and promotions to improve the customer experience (see p. 26).