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Dell spreads out its selling channel

By Byung-jun Kang
델, 新유통 모델 "아직은 현재진행형
Electronic news, (http://www.etnews.co.kr/news/detail.html?id=200804160065)
2008/04/17

Dell computer is known as the successful model of computer-product market by its innovative selling strategy. Michel Dell, the founder of the company, started the company without strong capital asset, but by the strategy He did success.

The core of this success is their direct selling strategy. That is, not buyer’s contact to the market or store, but the seller’s visit to the buyer directly, which did a great work for Dell. The result was not only for customers – comfort, low price, match to their needs, but also for dell itself; they reduced the cost revolutionary, controlled the inventory successfully. They grew to the major computer-product company in the market. In addition, with the growth of internet, their direct-selling model became huge; the selling amount at their website is as twice as the whole computer market size in Korea.

But now, Dell has been taking a change of their direct selling model. According to the article, dell has started to diversify their distribution channel. They entered the retailing store like Hi-Mart and took an agreement with distributers

I guess that it is because of the reduction at the sale, profit, and market share. Dell has been taken over their 1st degree of PC sales; their brand of notebook is still week. Michal dell, who has just came back to the CEO, performs that with the cut of the 8000 of labors.

The superficial result is shown as the growth of sales, but, the article says that it is not yet success. Their brand is no more perception and trust than that of Samsung or HP. The result will be figured by the effect of enlarged channel.

Overall Opinion
There was a concept about direct selling and indirect selling in the last class. Dell, the manufacturer of its computer product wanted to be direct seller. It’s because they wanted to demonstrate their goods, and the margin is high when they role as wholesalers and retailers also. But they changed their strategy for use of the strong retailing channel, and for establishing their brand image strongly into the channel. I’ve found that the importance of determining the selling-strategy for maximize the profit.