business strategy
requirements, needs, wants and information
• Dell's global manufacturing and global sales capabilities
• R&D capabilities
• Expansion into servers gives Dell ability to serve wider range of customer needs
• Reputation/image
• Use of Internet and corporate intranets to make sales and provide information
• Customer service and Technical support
• Just-in-time inventory practices (no one in the PC industry does it better - or even comes close to matching what Dell can do)
• Build-to-order manufacturing and mass customization (Dell is the industry standout, but rivals are working to close the gap)
• Virtual integration - weaving a partnership with both suppliers and customers
• Direct sales capabilities (no rival can yet match Dell on this, although some are trying)
Weaknesses
• No in-house repair service capabilities (as some rivals have)
• Lacks the product line and service breadth of Compaq Computer and IBM
Opportunities
• Continue to take market share away from rivals in PCs in all of the world's major markets
• Make further inroads in servers
Threats
• A long-term slow-down in global sales of PCs and servers
• Competition because competitors have strong product lines and service breadth
Q # 4
What does a competitive strength assessment reveal about Dell, as compared to Compaq, IBM, Hewlett-Packard, and Gateway? Among these five competitors, who enjoys the strongest competitive position? Who is in the weakest overall competitive position?
Q # 5
Has Dell’s strategy resulted in a substantial competitive advantage over its rivals? What is the basis for whatever competitive advantage it has?
Competitive Strength Assessment
• Build to order approach
• Direct sales approach
• Attractive price and strong brand name
• Ability to save customer’s money --> loading customer software and technical support
• First hand information of what are the customer requirements, needs, wants and information
• Close working relationships with suppliers and customers
• Long term relations with suppliers
We believe that the strongest competitive strength for Dell is its entire business model. Everything is working in an order so we cannot say that one or two components of the strategy are best. Dell’s entire business model is based on the strong vision of Michael Dell and the employees are very much dedicated to it so everything seems like working for them.
Q # 6
What is your assessment of the company’s financial performance the past five years?