Dell Applies Winning Formula to New Areas

By Eric Lundquist  |  Posted 2002-10-21 Print this article Print

The secret of Dell's success is that there is not really that much of a secret to how the company operates.

The secret of Dells success is that there is not really that much of a secret to how the company operates. Through science and intuition, the execs look for market segments that have reached critical mass in terms of volume. Once a decision to jump into a segment is reached, the company turns on its combined manufacturing and customer direct model to offer customer-specific configurations at market-leading price points.

As this weeks Cover Story illustrates, Dell is confident it can apply its successful formula to areas where the company has only tentatively ventured in the past. In a round of interviews at the companys headquarters, it was evident that to grow the company in a lackluster economy, the Dell model must find success in new and unproven areas. Dell execs contend they can bring the same efficiencies to the services area that they have achieved in desktops and servers. Services is one area that has long resisted innovation, and well be interested to see how Dell can restructure the services model.

How strong is the companys dedication to manufacturing efficiency? One example: During a tour of one manufacturing facility, a manufacturing exec explained at length the companys plans to shave a few more seconds off the process of taping the Dell box shut before shipping. All these saved seconds add up to about a 25 percent per year manufacturing cost reduction. Read the inside story on Dells strategy, as well as an exclusive interview with Michael Dell.

While the news team was busy getting the inside story on Dells strategy, eWeek Labs analysts were busy at our California labs investigating voice over IP. This much-promised and much-delayed technology is especially attractive in these tight economic times. Putting voice traffic on a data network offers a host of savings opportunities. In "Assessing VOIPs Role," eWeek Labs Analyst Cameron Sturdevant tests VOIP systems from Avaya and Nortel Networks. As Cameron reports, the voice quality and reliability of these systems has moved to a much higher state than in previous tests and warrants a close look.

In our VOIP tests, we wanted to also look at the process a company goes through to evaluate the technology. To that end, eWeek Labs developed an RFP for a fictitious company. With the proposal in hand, we went about specing the equipment, system and price for VOIP installation. We think these types of tests will help you develop your own strategies for VOIP networks.

Have a winning strategy? Write to me at

Since 1996, Eric Lundquist has been Editor in Chief of eWEEK, which includes domestic, international and online editions. As eWEEK's EIC, Lundquist oversees a staff of nearly 40 editors, reporters and Labs analysts covering product, services and companies in the high-technology community. He is a frequent speaker at industry gatherings and user events and sits on numerous advisory boards. Eric writes the popular weekly column, 'Up Front,' and he is a confidant of eWEEK's Spencer F. Katt gossip columnist.

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