Dell: Direct sales 'is not a religion'

The PC giant looks set to ditch its trademark direct sales model to revitalise the firm's fortunes.

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By  Administrator Published  May 3, 2007

PC giant Dell looks set to ditch its trademark direct sales model as part of efforts to revitalise the firm's fortunes, its founder revealed last week.

In a memo to employees worldwide, chairman and CEO Michael Dell said the direct model that has served the company well for so many years "is not a religion" - something former CEO Kevin Rollins had referred to it as in the past.

Dell said the world's number two PC manufacturer had to diversify its distribution model in order to better address the needs of customers.

"The direct model has been a revolution, but is not a religion. We will continue to improve our business model, and go beyond it, to give our customers what they need," Dell told employees.

Analysts have been calling for the vendor to diversify its route-to-market for some time now, but last week's memo is the first sign the PC maker is actually considering tampering with the industry's most famed distribution strategy.

In certain regions of the world, including the Middle East, the company already distributes through partners, but in major markets such as the US and Western Europe the company operates a strict direct model.

In the memo Dell also said the company would "make its mark" on the rest of the world, especially the emerging markets of Brazil, Russia, India and China; Dell plans to open a factory in Brazil this month and one in India in July.

Dell's Q1 unit sales dropped 6.9% year-on-year, while market leader HP's unit sales rose 28.2%, IDC said.

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