Dell 5 Forces

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Porters Five Forces – Competitor Analysis Michael Porter’s five forces model is used to explore the competitive environment in which a product or company operates. In this case it will explore the competitive environment of Dell and the Tab Streak. The Five Forces Analysis looks at five key areas: | New Entrants | | Suppliers | Industry competitors and extent of rivalry | Buyers | | Substitutes | | Threat of New Entrants The computer industry is a highly competitive one with continuing developments. Therefore new entrants barely stand a chance. Also because of the price of a tab (around 500) people are more likely to go with big brands they ‘know’ or are loyal to brands they trust. Beside that most existing computer…show more content…
Power of Buyers/Customers These days the bargaining power of the customers is increasing more and more. The computer industry has many competitors and customers can retrieve information about them and about products more easily because of the internet. Not only can they sometimes buy the products cheaper online, there are also major possibilities to compare products and get customer reviews. Besides this the number of customers is huge and they are price sensitive because of the economic crisis past years. On top of that all they have low switching costs, because most stores offer various brands and therefore customers can easily choose another brand. However the customers do not have all the bargaining power since prices are usually set. . Competitive Rivalry When Dell entered the market; it found an intensely competitive market. This causes players to be highly aggressive, which resulted in Dell forming its unique direct selling model. However Dell’s direct selling model in not as effective anymore because of new rivalries; low cost Asian competitors, such as Lenovo and Acer. These competitors have lower producing cost and are therefore very attractive for the price sensitive customers. Therefor Dell is already changing its model and is selling its products also at retail points. All to reach the customer in every way

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