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Apple/IBM vs Dell
While Apple Computer Inc. and IBM Corp. failed to retain their market leadership in a market that they helped to create, Dell Computer Corporation, a small player in mid-80’s, has emerged as a major player in same the PC industry. Besides Dell’s “direct model” and “focus on sophisticated computer users” which have received significant attention in the management literature, Dell’s success, in part, is due to the focus of its product design strategy (Margretta 1998). The complexity and uncertainty of each one of its three major product lines, e.g., laptop, desktop, and servers, are quite homogeneous. The homogeneity of the design task is achieved through reduction of component diversity, use of standardized purchased components, and modular product architecture. Dell’s product design strategy allows Dell to offer significantly more product configurations than its competition with R&D budgets smaller than most large computer firms (Thomke, Krishnan, Nimgade 1998). Dell Computer Corporation is an example of how firms can achieve efficiency and effectiveness by focusing their product design effort on a set of homogenous design tasks and gain competitive advantage, even in a market characterized by increased competition and shorter product lifecycles.
About Dell, you've got a very interesting case:
Case: Product Development at Dell Computer Corporation
New product development and operations are closely linked activities in many organizations. In this case
we’ll explore critical issues in managing new product development and the linkages between operations and
new product development management. Prepare the following questions for class discussion:
1. What are the competitive forces shaping the computer industry in 1993?
2. What has been the state of Dell Computer Corporation prior to and including 1993? Its finances? Its
customer base? Its products and product development process?
3. Why has Dell’s senior management introduced the new 18-month development process? What are
they trying to change or improve?
4. Which battery option should Holliday’s team select? Stay with the proven NiHi battery technology?
Or go with the new LiOn battery technology under development at Sony? Or should they defer the
decision until the qualification phase review?