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Dell Inc. In 2006

Case 1: Dell Inc. in 2006: How Rivals Beat Its Strategy?

Question 1:

Dell has been a fast growing industry that has been supplying their customers with personalized computers and other products at an affordable rate. Dell offers desktops PCs, mobility products like notebook PCs, printers, monitors, TVs, servers and networking hardware and other products that can be put in good use for those who own a corporation, a small business and for home use as well. “Dell built their computers workstations and servers to order, none where produce for inventory.” (Thompson & Gamble, pg 252)
Michael Dell’s approach was to bypass all distributors and retails and build to order, which reduced the cost and risk of carrying large stocks or parts, components and finished goods. They have been dominant in all areas and it is extremely hard for the competitors like HP and IBM to keep up with them. In the first nine months of 2005 Dell had 33.9 percent share of PC sales in the U.S and in 2004 they were the number one domestic seller of servers with a 33 percent of the market share.
Question 2:
Providing new products is something that Dell is really good at. Like Mr. Dell said, “What we have been able to do is build a business system that takes those technological ingredients, translates them into products and services and gets them to customers more efficiently than any company around.” Since Dell has been bringing new and better products into the market it has proven to be more profitable and their competitors can not keep up with them. The competitive forces that Dell’s rivals are facing are; the direct relationship they have with their customers because it eliminates the wholesale and retails dealers, the fact that Dell allows their customers to custom built their own products and custom tailored services and with the use of standardized technology and selling directly to customers it allows a low cost structure where cost savings can be passed by lowering their...