The success that Dell has enjoyed for many years could be explained by many factors. Most analysts refer to the new distribution strategy that it brought into place, moving from a traditional B2B2C approach followed by the Industry, to a B2C one. Indeed selling directly to the customers was part of its disruptive approach and helped him to lead the PC Market.

However, from my point of view, there was something that also made a huge contribution and was probably what made the difference in the end: Its ability to customize its products.

When purchasing a regular PC on a traditional Retailer, say Best Buy, what you could get was the following:

- A number of PC s from different brands, from which to purchase from.

- Standard configurations you have to cope with.

- Potentially, a salesperson that could help you with the purchase (in a biased or unbiased way)

In the case of Dell, the experience was significantly different: You could configure the product you liked based on your preferences, and get a quotation for it. So that you could get whatever you had in mind (a customized product just for you) + a unique price for whatever you looked for.

The customization was combined with an aggressive pricing policy + well-known brand that made the difference for many years. Till large retailers in hand with key PC Brands came up with a new value proposition (where extra services and financing conditions where key) that eroded sales heavily from Dell.

The response came in many areas, including Customization 2.0. Customization initially launched in the USA and later extended to the rest of the World , by which you could personalize the cover of your PC with a standard colour (which was what was initially available) or with one of the numerous drawings specially made for Dell by outstanding artists (cfr Dell Desing Studio for more details).

Good enough to recover the leadership in the PC Sales? Looks that it has not been the case. They were forced to open traditional distribution (B2B2C sales through Retailers) in the USA and soon will do the same in Europe, where you will find their PCs sold at mass merchandisers and consumer electronic stores.

Looks good and reasonable but, how will they cope with Customization? Will they lose one of the key attributes that has helped them to differentiate? Let´s see how they handle it. Strategic, Marketing and Operational challenges will be waiting for them.

THINK DIFFERENT!!!

Ignacio Gafo