Case study of Dell Essay

Dell. Dell’s products—computers, servers and printers—are commodities. Dell tends not to develop the technologies underlying these products. Instead, it purchases the components from firms that develop the technologies (semiconductors and computer software). Dell’s direct-to-customer marketing strategy is not unique, but the extent to which Dell performs this strategy better than anyone else in the industry gives it a competitive advantage. Its size, purchasing power, quality control, and efficiency permit it to operate as a low-cost provider.

In serving its customers Dell has succeeded more than its rivals. It can be seen from the table 3 that ranks PC manufactures based on Consumer Report where Dell won the 1st rank place.

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

Founded in 1984 by Michael Dell with the aim of building relationships directly with customers. Dell is a premier provider of PC products and services sought by customers worldwide to build their information technology and internet infrastructures. Through its direct business model it designs, manufactures and customises products and services to customer requirements and offers an extensive selection of software and peripherals.

Dell's commitment to customer value, their team, being direct, operating responsibly and, ultimately, continues to differentiate them from other companies. Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. Dell is the worlds leading computer systems company; they design, build, and customize products

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?

Since the 90s, the PC has been driven by the bargaining power of buyers and their widely varied desires. Taiwan based Acer is an example of a PC manufacturer which modeled its business after current trends. Since 2007 it has shifted focus from desktops to laptops. In addition, because of the large number of potential suppliers to PC distributors, intense competition was created for almost all components of the PC. The

1. a. In a span of 20 years, from 1984, Michael Dell became the leader of one of the most profitable and innovative organizations in the world. The meteoric rise of Dell Computers Corporation was largely a result of some innovative strategies and perspectives and reveals a new model for doing business in the information age. Discuss the major mistakes made during this period and the resulting lessons learnt by Dell.

Pearce and Robinson (2005), tell of Dell’s innovation in this manner, “Dell Computer built its first 10 years of unprecedented growth by creating an organization capable of the speedy and inexpensive manufacture and delivery of custom-built PCs. Gateway and Micron have attempted to copy Dell for most of that time but remain far behind Dell’s diverse organizational capabilities” (p. 151).

Both Dell and HP are two strong players in PC industry which refers to an industry where companies produces PCs (desktops and notebooks), handheld devices (smart phones and tablets), and workstations. However, with growing global expansion, Dell and HP’s performance differs. Dell, once the world’s largest PC maker in 2001, has continually lost its market share to HP and Acer since 2007 (Guglielmo 2009). The cause is rooted in two differences of these companies: company diversifications and core competences. Therefore, how firms can continually survive in the PC business is more of an issue for Dell than for HP.

But there is one company that has stood and fought its rivals. The name of that company is Dell. Started on November 4 1984 by Michael Dell, Dell grew by the early 90’s to become the largest seller of PCs and servers. The company currently sells personal computers,

Dell's value-chain strategy combines technologies from Intel, IBM, and Microsoft to serve customers efficiently and with state-of-the-art computer technology. Dell is able to introduce next generation products faster than its competitors can because its market-driven strategy is developed around a direct sales, built-to-order business design. This distinctive process capability is supported by effective supplier, distribution, and service partnerships with other companies. Dell's management understands its customers since company personnel are in close contact with buyers who make inquiries and place orders. Not only does Dell process some 500,000 telephone calls each week, but 65,000 corporate customers are linked to Dell through their own Dell Premier Pages on the Internet, and Dell's Internet based sales reached $50 million a day in 2000. Indeed, in 2001, Dell became leader in global market share. (market driven strategy ch 1, http://highered.mcgraw-hill.com/sites/dl/free/0072466650/46701/cra66650_ch01.pdf#search='dell%20external%20influences%20marketing%20strategy')

DELL’s PC and laptops business have strong market share in the United States and is fast gaining market share worldwide with a double-digit growth rate in countries such as India and China. DELL is ranked the world's number two PC maker with a market share of 13.7 percent for the 2nd quarter of the year 2009, according to the industry tracker IDC. Due to the recent global economic downturn, DELL posted a 22% decline in PC revenue, which made up to about 60% of DELL’s overall revenue (Source: Reuters 7/10/2009 - Appendix 1.1). PC and laptops are DELL's core businesses. DELL’s PC business continues to grow in Asia and the focus will be in China and India for the next few years.

Dell keeps their suppliers up-to-date with information that helps the company work faster to resolve service calls or quality of customer service. “Most of the managerial challenges at Dell computer have to do with what they call velocity- speeding the pace of every element of their business.”

For the long time, Dell was well known as the largest manufacturer and marketing company of personal computers. But then due to increasing competition in the market,