Harvard Business School: Matching Dell
Assignment 1
4701U - 001
Word Count: 738

Submitted By: David Pascual Shees Mazhar and Ryan Lerma

Submitted To: Professor Jelavic SID: 100 369 901 100 369 510 100 344 842

Date: November 16, 2011
Question 1 444

Bargaining Power of Buyers (High and Rising) 80
Buyers have relatively high power of bargaining since Wintel standards create easy switching and low brand loyalty. The category of retailers and resellers could easily backward integrate and sell their own manufactured PC’s. Appealing to end users meant concern for price sensitivity and easy switching. The category of major companies and government buying power is very high because a bidding war is created where different PC firms fight to provide the best service, product and support at the lowest prices.
Supplier Power (Very high and low) 54
Generally, there was only one category of suppliers to the PC industry which was Microsoft, while Intel provided the operating system and the microprocessor, both at a near monopoly. At the time, no other company had the manufacturing or distribution capability of either provider. In the category of peripherals and commodity inputs, these were cheaply bought nationally and internationally.
Threat of New Entry (Moderately High) 70
New entry is moderately viable since the entry costs are practical to an established company. With start-up costs of approximately one million dollars, companies with reputable capabilities and resources can enter the PC business quite easily. Another category would consist of the unbranded “White Box” manufacturers where systems could be easily assembled by end users with the ease of