Matching Dell

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The PC industry is one of the most competitive industries in the world. The industry had started to develop fast in the 80 's when IBM launched its first PC series following which a number of "Clones" made their entry into the market. Along with these clones a number of smaller manufacturers also started entering the market. The reason for this emergence was mainly that IBM had conceded the rights to the 2 most important components of a PC i.e. the microprocessor and the Operating System to Intel and Microsoft respectively. This was due to their "Open Architecture" model. This caused the technology to be available to everyone. We can analyze the PC market using Porter 's 5 forces theory • Industry Competitors: The PC industry consists of…show more content…
As the competition realized that Dell 's model is operating with efficiency, the other manufacturers also introduced their own direct selling models. • IBM introduced the Netfinity Direct program • Compaq acquired DEC and introduced the DirectPlus program • HP, although skeptical of the Direct selling model did make a modest attempt at direct selling through their web service, HP shopping village. • Gateway was introduced which was the worlds second largest Direct marketer of PC 's Dell 's Competitive Advantage: Dell 's Competitive advantage lied in its very low or negligible inventory that it held. Also, because of its direct sales strategy it eliminated the intermediaries. Dell also had a first mover advantage in the direct selling model. Prior to the efforts of the other companies to match Dell it had a phenomenal growth i.e. the net income of Dell had grown from 51 million dollars in 1992 to 1460 million dollars in 1999 which was a growth of 28 times as compared to the growths of HP and Compaq. The revenues of Dell (1992-1999) grew by around 3 times faster than Compaq, HP or IBM. The Dell growth chart is as shown below DELL Dell initially starts off

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