Dell Computers Case Study

Led the PC microprocessor market and ousted competition through sole licensor decision: Post losing a contract to supply microprocessors to Apple, in early 1980s, Intel won a contract to provide the same to IBM for its PCs. IBM PCs were a huge success and catapulted Intel to gain market leadership. IBM initially forced Intel to license its product to other players to secure adequate supplies reducing Intel’s potential

Computer technology is constantly advancing over software and hardware that is available at any one given time. These constant changes affect how long computer products can sell for a premium price but also can make it cheaper for those consumers that are not interested in the newest and latest components. Personal computers (PC), also known as desktop computers, are common place in jobs, schools and homes. The demand for personal computers is constant and revolving since components of computers gets better and more powerful with time. The target market then becomes anyone that uses a personal computer for home or work. HP uses the fact that computers are a common item in any office or home to their advantage and offers not only PC’s but other accessories pertaining to computers as well. While HP currently excels at providing a product for a decent price they are missing out on consumers that Equalus will focus

At the time, the personal computer business was in its infancy, and the company sought to fill a niche by providing communication networks to link mainframe computers. Although the company grew rapidly, Mr. Lee felt that the real opportunities for growth lay in personal computers. In the mid-1980s, he decided to make a major switch to the production

The product chosen for the decline in consumer appeal is "a personal computer" (PC). This product is chosen because its sales and revenues are overall decreasing in the US market. Consumers are losing interest in using PC, due to obsolesce. PC is a technological product in which innovation and advance technology play an important role. New products are coming in the market with latest technological

America was not buying into that claim and 90% of computers used are Intel based. (Lai, E. (2007) Vista, Mac Use Both Increase. Retrieved January 9, 2008, from PCWorld Web site http://www.pcworld.com/article/id,140422-page,1/article.html).

Three new computers offering to customers including wholesale and retail prices. These three brands were selected according to their design, connectivity, performance, price and help and support. The ratings were compared and the top 3 leading brands were chosen.

customers lack a commercially viable alternative to Windows” (“Microsoft: Court’s Findings of Fact”). The barrier of entry would “prevent an aspiring entrant into the relevant market from drawing a significant number of customers away from a

On the other hand, the following factors lower entry barriers: the customer switching costs are small as PCs are open systems with standard specifications that can be met by any manufacturer, governments don’t, usually, restrict entry to the PC

The company has managed to earn a profit in these tough economic times because of its diverse customer base, broad portfolio, and numerous cost initiatives (Edwards, 2008). The company made a commitment three years ago to focus on design and innovation in the PC replacement market by offering devices such as touch screen PC’s and easy to use software (Edwards, 2008). This has enabled the company to gain market share from its competitors such as Dell and Toshiba (Edwards, 2008). The company has also focused on innovation in printers and services that has helped boost consumer and business interest (Edwards, 2008).

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.

IBM stands for “International Business Machine” and was incorporated in 1924 focusing on delivering ‘products’ in the form of punch tabulated machine until it became the biggest and most successful business PC and mainframe manufacturer in world circa 1980’s. At this time IBM stock price once shot up until USD43 per unit [1]. However by the end of 80’s, the software environment began to change and IBM was left in a lurch as it was unable to react on changes on customer needs and behavior while new and nimble competitors like Apple and Dell began to gain market share. Events took on to a near disastrous

* In 1985, Compaq and IBM do a research and development (R&D) and make move Apple into the mainstream by becoming low-cost producer and joint venture with IBM. This’s one of Apple failure moment and Apple Gross margin drop to 34%.

• DELL experimented with retail channel in 1990, resulting in brisk sales, but lower margins, resulting in retail losses, in 1993, DELL withdrew in 1994.

True to nearly any commoditized product, pricing and availability became the only two significant differentiators quickly as Intel increased

Compaq and Dell stole IBM’s PC market with the right price and the right message.