Dell on how to attack a New Business

As quoted in Business 2.0 – part of a “how to succeed in 2004” series:

We first understand how the customer is being served, how can we add something unique, and how can we eliminate cost. We look also for large adjacent markets that are standardizing. These are often characterized by prices that are too high. Our business model is applicable across a broad cross section of the IT industry, where technologies are standardizing, products cost too much, and Dell’s distribution advantages can be brought over. Also there is a complementary nature to these new businesses. The same people who buy desktops buy printers, storage, projectors, services, and network equipment.
We really got serious about the consumer business in 1997. At the time, about 95 percent of our revenue was business and institutions. Now it is 85 percent, and 15 percent is consumer. If you look at what is happening with digital music and broadband, increasingly you have this idea of the digital home, with the PC at the center, connecting things that used to be proprietary. So there are now multipurpose monitors that can be a computer monitor or a TV. And there is the idea of an IP-based wireless network in your home where you have different nodes, whether for audio, video, or printing output, with a PC at the center. Users are asking us for these things.

Still, we cannot do everything at once. We have to prioritize which opportunities are best for us and for our customers. But it’s a good day for customers when we enter a new market.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.