Dell started out as a specialist company in the PC industry’s horizontally-segmented industry
structure. It assembled its own computers from standard parts and components manufactured
by others and delivered its products directly to customers. Dell focused on the relationship with
the customer, but in order to sustain a high growth rate while providing necessary customer
service, Dell built a complex web of relationships rather than doing everything itself. With its
build-to-order model, Dell viewed final assembly as a core competency which was kept inhouse,
but it outsourced components, pre-assembly and logistics. Service and support were also
viewed as a key part of relationship selling, so Dell kept control of the function but outsourced
some service delivery functions to business partners (resellers, system integrators, service
companies) who would help customers to install, support, and service Dell PCs. Thus, Dell
became a virtual corporation as a matter of business strategy. The key to the strategy was fully
exploiting information technology, the Internet, and e-commerce.