Revitalizing dell
Situation Statement
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.
Problem Definition
Generally, in order to consolidate its top market position, Dell Computer Corporation has to keep its competitive advantage and figure out the issues which come from the internal and external environment.
First, as globalization continues to develop, it is bringing both opportunities and threats to companies worldwide. The PC market is experiencing constant renewal and replacement and this results in the reducing of differentiation and the increase in price wars among competitors. In the early 1990, Dell was positioned as “focused differentiation” in the PC market and attracted a lot of customers by using their superior customer service. However, Dell’s competitive differentiation from its competitors, which is based on its “customized product”, is not its core competence anymore in 2007 since Dell’s remarkable direct model has been imitated by other companies.
Second, although the PC market is a highly competitive and rivalrous market, the profitability is still attracting the attention of companies to squeeze into this market. Therefore, Dell is facing the challenging threat of new entries into the market. Additionally, due to the diversified products, customers have more options on computer brands,
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.
Problem Definition
Generally, in order to consolidate its top market position, Dell Computer Corporation has to keep its competitive advantage and figure out the issues which come from the internal and external environment.
First, as globalization continues to develop, it is bringing both opportunities and threats to companies worldwide. The PC market is experiencing constant renewal and replacement and this results in the reducing of differentiation and the increase in price wars among competitors. In the early 1990, Dell was positioned as “focused differentiation” in the PC market and attracted a lot of customers by using their superior customer service. However, Dell’s competitive differentiation from its competitors, which is based on its “customized product”, is not its core competence anymore in 2007 since Dell’s remarkable direct model has been imitated by other companies.
Second, although the PC market is a highly competitive and rivalrous market, the profitability is still attracting the attention of companies to squeeze into this market. Therefore, Dell is facing the challenging threat of new entries into the market. Additionally, due to the diversified products, customers have more options on computer brands,
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