Questions for Report #4 1. a). Define virtual integration- the use of the Internet to replace physical components of a company with information.

b). Define direct model: he could bypass the dealer channel through which personal computers were then being sold. Instead, he would sell directly to customers and build products to order. In one swoop, Dell eliminated the reseller's markup and the costs and risks associated with carrying large inventories of finished goods.
2. How did Dell leverage relationships with both suppliers and customers to achieve integration?
Small specialized companies developed to make a specific product that dell uses made it so that they don’t have to focus on that aspect of that business which they couldn’t afford and instead focus on improving delivering solutions and systems to the customers. They also have a deal with their suppliers where they have their design engineers work with their the supplier agrees to meet 25% of our volume require displays, and because of the long-term commitment we make to them, we'll get our displays year in and year out, even when there's more demand than supply. The supplier effectively becomes our partner. They assign their engineers to our design team, and we start to treat them as if they were part of the company. For example, when we launch a new product, their engineers are stationed right in our plants. If a customer calls in with a problem, we'll stop shipping product while they fix design flaws in real time.

3. How does Dell work with its logistics service providers such as UPS and Airborne in this integration model?
So now you have Sony producing a level supply of monitors for you. What happens next?
We tell Airborne Express or UPS to come to Austin and pick up 10,000 computers a day and go over to the Sony factory in Mexico and pick up the corresponding number of monitors. Then