Dell has emerged as one of the biggest sellers in the PC market. From humble beginnings in 1983, when Michael Dell worked out of his campus dorm room, to 1996 when we reached $7.8 billion in sales, the source of our amazing success has been our unwavering focus on the customer, termed the “Dell Direct Model.”
Established in 1984, Dell Inc. has been a multinational corporation focused on computers and related services. Dell is a leader in the computer industry due to their two core competencies: a direct-sales model and its 'build-to-order' manufacturing process. The outcome of these two combined strategies has lead to a firm specific strategy of combining at the same time low-cost and differentiation. However, due to a changing market environment and internal issues, Dell's market share started to decline gradually during 2005, resulting in lower growth rates and a decrease in stock value. The question started to arise: "Should Dell stick to their objectives and strategy or adapt to a changing environment?" As being a market leader for a long time,
Dell’s main strategic elements are built around a variety of core fundamentals which give Dell the competitive advantage it needs to regain its position as the leading manufacturer of IT products and services.
In this report, I will review the internal and external environment of Dell Computer which enabled them to compete with other PC competitor. A case study from the instructor about Dell was provided to help with the internal and external analysis of the company in relation with the non price attributes with their PC product. This report will also look on how Dell should implement their strategy to retain their market share and to out position other competitor in the future.
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.
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
Dell Case study. In this report we are going to analyse the business environment of the computer industry in the form of a PESTE which stands for Political, Economical, Social-Cultural, Technological and Environmental. We feel that it is important to analyse the environment of a business as it will help the business to identify the
REF OF GROUP MEMBERS’: TABLE 1 : 5 C’s SITUATION ANALYSIS Factors Dell Company: Resources 1.4 Licensing, Distribution channel, Supply • Intellectual property, Human resources, Patent, Competences Brand acuity1 chain management 24 25 Techno structure • Just-in-Time; CRM; Engineer R&D, Acquisition
Dell and Hewlett Packard (HP) are two of the most influential companies in the PC market. The CEO of HP requires an understanding of how dells strategy allows it to achieve a competitive advantage so that he/she can counteract it. This report has been carried out to provide the CEO with the necessary information to do this. Therefore the objective of the report is to provide the CEO with detailed information on Dell as a business and its strategy. In order to achieve this, first the main strategies of Dell and how they provide competitive advantage will be identified, then the business models and e-business initiatives used
Historically, Dell has been known as an industry leader in supply chain management. They have been credited with developing supply chain processes that have come to be recognized as some of the most innovative not only in their industry but throughout all business sectors. All of these accolades made Dell an unlikely choice since there didn’t appear to be much room for improvement, at least from a supply chain standpoint. However, over the past few
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
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.
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.
Michael Dell founded Dell in 1984 at the age of 19. Steve Jobs and Steve Wozniak designed Apple Computer on April 1, 1976. As both companies continue to grow they have contributed to a wide impact on competiveness and efficiency towards strategic goals.