An Investigation of Dell and Hewlett Packard’s Business Models: How Is Competitive Advantage Created?

Affordability of latest technology through Direct Sales Services - Dells uses direct customer relationship or as it calls it “customer intimacy” as its distribution strategy. This means meeting customer needs directly and cutting middleman interference as much as possible. This is done either through dedicated sales representatives, telephone based sales and online at www.dell.com. As a result, the purchase price would be lower than other competitors.

Dell's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. This strategy enables Dell to provide customers with superior value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use.

Home and corporate users dominate the five categories of buyers on PC consumption. There are large amounts of these buyers in the market that are price sensitive and have low switching costs on their products which raises overall buyers’ power. However, in the case of Dell, many customers became frustrated with Dell. For example, Dell’s call centers received manyf discouraged clients’ comments. One reason: many service representatives were trained to solve only one category of a problem, so almost 45% of calls had to be transferred from the agent who answered the call to someone with the knowledge needed to help the customer. Richard L. Hunter, who was brought in to improve Dell’s customer service, called the situation “terrible”, explaining that it was comparable to “delivering materials to the wrong factory 45 percent of the time.” Worse, to slow the tide of calls from customers, Dell tried removing its toll-free service number from its website. Customers’ reactions showed up in Dell’s declining market share and slumping customer satisfaction ratings (Certo, 2013). Moreover, when Dell went on to expand its tech support outsourcing with other call centres in India, customers began complaining. Consequently, Dell stopped being perceived as an American role

Dell is the most successful company in PC industry of 21st century. It has shown phenomenal growth record over the past decades & listed as America’s third most admired company. Their core strength lies in Direct model offering closer customer interaction and Virtual Integration. This is giving a low cost advantage to Dell and its competitors are not able to imitate this model for all these years.

Dell Company is one of the leading brands in the computer industry. Its long stint in this computer business has been inspiring for many small IT companies and current entrepreneurs. The given case study has blended a lot of crucial info on the Dell regarding its early growth period with issues, industry specific details, business model, product line and structure, issues and policies in its business in cooperation with future prospects of the Dell Company. Hence, this paper will reply the below questions, based on this case study of Dell Company.

What is Dell’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?

Although Dell is an extremely successful company, there are areas of improvement and enhancement that should be considered. After a thorough analysis of Dell¡¯s IT tools, business model, IT infrastructure and competitive advantage, we have developed seven key suggestions. By implementing these recommendations, Dell can keep its high ranking in the competitive computer industry by increasing customer satisfaction, competitive advantage and superior value chain, without changing its principal operations to achieve these goals.

The Dell Computer Corporation was founded in 1984 by Michael Dell, who began the company by refurbishing IBM clones out of his dorm room for extra money. From the beginning and through the 1990’s, the company grew quickly and was very successful. Dell used a cost leadership strategy and focus on creating products that were already in the market place, but changed the timing of production and the method of distribution that was in place with the company’s competitors by assembling computers to order and selling directly to the customers. The company focused on creating value for customers and meeting their needs, but into the

Dell Computer's initial business model concentrated on creating build-to-order personal computers to customers' specific needs. This has grown from a fairly modest operation to a $62B business as of the close of their latest fiscal year (FY 2012). Dell succeeded with an Internet-based business model by concentrating on the accuracy, agility and speed that its much larger competitors could not match. Honeywell, IBM and others could not match the speed and agility that Dell had in basic build-to-order product strategies, which would eventually grow into the core part of their business model. Dell was able to rely on the ubiquity of the Internet to create a much large, diverse customer base compared to its competitors who were constrained by traditional retail channels (as was IBM's case) or a reliance on direct sales forces (Salvador, de Holan, Piller, 2009). Dell was able to capitalize on latent customer demand for customized PCs, laptops and servers at a much greater rate that competitors who failed to see the disintermediating influence the Internet was having on distribution channels (Salvador, de Holan, Piller, 2009). Dell succeeded at this strategy where dozens of other companies failed by concentrating on having the most thorough integration of their supply chain, production, fulfillment and services online globally, all unified through secured Internet-based networks. While the many competitors Dell had

The PC group within HP PPS has been refocused around customer needs. The PC group changed its product line which had a stronger focus on product design. New business models have been the focus of the print group. Business models such as Ink Advantage, is a program designed to target price-sensitive customers in emerging markets. Ink in the Office is an initiative of the print group that targets business customers. The group has expanded differentiated services and solutions by leveraging HP's portfolio of hardware and software, including combining multifunction printers with Autonomy management solutions to develop cloud-based document management services (HP,

Fulfilling the client/customer’s requirement Dell perform primary and support activities that produces cost effective and differentiated features. The company provide

Dell is a computer corporation recognized for manufacturing computer systems through parts assemble. In 1983, Michael Dell saw an opportunity in using IBM compatible computers for a new assembly line that can be sold to local businesses. The idea as explained by Michael Dell, in an interview with Joan Magretta[1], is that in the early days of computers' manufacturing, companies had to be able to produce every part of the system. As the industry matured, companies started to focus on single parts and to become specialized in creating items that can be assembled with other parts to prepare a computer. As a result, Dell understood that to have a competitive edge in the market, they needed to focus on

Added to this has been the threat from competitive rival Dell as their profits and market share grew. Using key frameworks, I will examine and conclude

By grafting its system of custom direct sales onto the Internet infrastructure, Dell has transformed these activities, creating an innovative and efficient procurement, production, and distribution network. The innovative advance made by Dell in deploying Internet communication as the foundation of its production network, is a process innovation. Although to some extent, the Internet has enabled Dell to create a new product -- a PC custom-configured through Internet communication -- it is the process of organizing flows of materials and information within its network, from customer order to procurement, production and delivery, by means of Internet communication, that defines the innovation at the Firm. The case supports this notion by stating “While most other PCs were sold preconfigured and pre-assembled in retail stores, Dell offered superior customer choice in system configuration at a deeply discounted price, due to the cost-savings associated with cutting out the retail middleman. Additionally, an important side-benefit of the Internet-based direct sales model was that it generated a wealth of market data the company used to efficiently forecast demand trends and carry out effective segmentation strategies. This data drove the company’s product development efforts and allowed Dell to profit from information on the value drivers in each of its key customer

Dell is a computer technology corporation that involves sells, repair, support computer and their parts. Dell has found out that supply chain is becoming more and very important for the success of nowadays business global world and they work consequently to retain a