HBR Case Revitalizing Dell Essay

4163 Words Apr 1st, 2011 17 Pages
March 4, 2011
Case-Revitalizing Dell I. Diagnosis
Question 1: The most critical shifts in Dell’s contextual factors, including industry dynamics, trends, technology changes and shift of the competitive landscape are following: The industry has changed significantly over the last 20 years. The traditional business model in the PC industry was inside-out, supplying machines based on orders from distribution, resell and retail channels, thus following the indirect selling concept. Dell’s direct model was at this time a new, challenging concept, taking orders directly from the end-consumer, and thereby, eliminating the middleman, costs and time. This was the initial crucial shift away from the traditional schema, allowing Dell’s quick
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After a series of confusing initiatives and consequent losses, it was acquired by Acer, leading to the next dynamics shift, which critically affected Dell later on (mid 2000s), but in a much less fortunate way. Acer praised itself with 100% indirect selling, entirely contrasting Dell’s business model. Acer established its competitive edge with its portfolio of brands, offering an extensive line of less expensive products. In fact, in 2009, Acer passed Dell to be the world’s largest PC provider in unit terms, as its sheer size allowed the company to “tailor brands to customer segments and geography, while having the volume to demand discounts from component suppliers and contract manufacturers” (p.12).
d) Acer: Acer’s rise and Dell’s consequent decline were largely reliant on the shift of interests of industries and consumers. Firstly, the PC industry shifted more and more towards outsourcing production, and thereby created lower priced products, which were welcomed by customers, as their needs shifted more and more towards cheaper products, which were acquirable in retail stores. Since the market in the US has become fairly saturated, the dynamics of the PC industry shifted increasingly towards cheaper products, as emerging countries such as India or China demand for PC’s (and laptops) vastly outnumbers any other market. In addition, younger customers (i.e. school kids) have become a rising market segment as well, as

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