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Them Gone

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The Power of Virtual Integration: An Interview with Dell Computer's Michael Dell (Summary)
Beginning in 1984 and coming up with a brave new strategic move Dell began distributing personal computers to its customers after managing to bypass the dealer channel. Virtual integration is one of the key factors that helped Dell in succeeding in the business strategically and becoming a 12 billion dollar company in just about a decade. Virtual integration captures detailed information about customers, afterwards it sends that information to suppliers periodically. This makes possible for the company to treat suppliers as inner partners and reach some level of internal coordination that does not need huge investments and an outstanding personnel.

Dell segmented its customers so that 90% of its sales went towards institutions which had the largest gross margins and 70% of those customers were reportedly buying PC and Dell's other type of gadgets worth more that 1 million US Dollars a year. This segmentation was actually called "Fast-Cycle Segmentation" that differentiated large customers from the small ones. Moreover, it went through more details by putting those two types in different spots, like large customers - 1. large companies 2. midsize companies 3. government and education. This blocks were differed, too. So the company was able to get the overall picture of its customers and further manage it well by getting closer to the customers and understanding their needs properly. Dell used to keep in touch with its customers and rely on their needs as much as possible. This was to hunt new clients and keep the existing ones, by offering, of course, high quality products. In addition to this, Dell used to offer its largest customers additional services in order to ease the purchasing of the products for them, thus letting them lose as little time as possible. Time is

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