Dell Case

In: Business and Management

Submitted By tarun
Words 2182
Pages 9
Dell Computer Corporation
Dell Computer Corporation since its arrival in the computer manufacturing business has been following the “Direct Model” that has helped it to leverage its position as a leading manufacturer of PCs.

When Dell entered the PC manufacturing industry there were already established competitors like IBM, HP, COMPAQ, Gateway and Apple.IBM was the pioneer with respect to technical standards in the PC industry and also had an open architecture allowing developers to build applications suitable for running on the IBM machines. The industry was rallying around the standards set by IBM and all major players in the industry had IBM clone machines except for Apple which was using alternative standards and had its own proprietary architecture. The major players had strong sales force teams and dealer networks .So the PC industry had a lot of competition and there was very less opportunity for any substantial growth in the industry. Because of presence of so many competitors in the industry price wars were common and locking in customers could only be done by providing them with a cost effective solution.
Also the PC manufacturing industry had two prominent suppliers for the microprocessor (Intel) and the operating system (Microsoft) ,the two most important things required in building a PC. Even though Intel made the microprocessor available to purchasers at a standard price it rationed new products to PC makers based on the proportion of their previous purchases. So the industry had to some degree supplier power if not directly but definitely indirectly.
Entry into the PC industry was relatively easy as learning curve was small and the manufacturing process of PC involved assembling different parts and installing the software. The architecture used by major industry players was open and hence could be used by anyone. Customers primarily purchased PC…...

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