...Information Systems in CUT THROAT PC Industry Simon T. Lau Table of Contents Analysis Paper Objective Section I : Industry Analysis : The Personal Computer Industry A. Personal Computer (PC) Industry Profile B. Porter Competitive Model for PC Industry Structure Analysis C. Business Strategy Model and Representative Business Strategies D. Globalization of the Industry E. Importance of the Information Technology to the Industry Section II : Company Perspective : Dell Computer in the PC Industry A. Business Leaders and Company Profile B. Competitive Strategy Statement C. Dell Computer Financial and Market Performance D. Significance of Information Systems at Dell Computer E. Strengths and Weaknesses of Dell Computer Section III : Structured Analysis of Information Systems at Dell Computer A. Strategic Option Generator B. Roles, Roles and Relationships C. Redefine and/or Define D. Significance of Telecommunications E. Success Factor Profile Section IV : Final Analysis – The Success of Dell Computer in the PC Industry A. Success of Business Strategy and Information Systems Use to Day B. Is Dell Computer effectively positioned themselves for the Future? Bibliography Three Outstanding Articles Analysis Paper Objective The objective of this paper is to analyze Dell Computer Corporation (Dell) business strategies and the effective use of information...
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...providing quality inexpensive computer products than its competitors and grew to be the number one in the world (Exhibit 1) by implementation of its Direct Model. While competitors sold primarily through distributors, resellers and retailers, Dell directly took specified orders from customers through its established website and telephone lines, built and shipped devices to customers. Dell’s success started when its revenue surfaced $80,000 per month in 1984, and its ever growing revenue to billions of dollars, shares price and domination of PC market and standards until its defeat by Wlett-Packard (HP) in 2007. The ever falling of Dell’s shares price eventually made Michael Dell to buy back Dell’s shares in order to be able to restructure its legacy PC business one day. Company’s Current Strategy Dell Inc. pursues a focused differentiation strategy by offering premium quality products and devices and the best possible before and after sales customer service in a very timely manner. Dell believes it has the most efficient business model in the fierce competitive PC making industry. The company’s strategy is built around a number of core elements: build to order manufacturing, partnerships with suppliers, just-in-time components inventories, direct sales to customers, (Exhibit 2) after sale customer service and technical support, direct supply of parts to costumer from suppliers, and pioneering use of the Internet and e-commerce technology to control inventories and orders....
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...Information and Computer Science, University of California, Irvine, Irvine, California, USA Keywords The exceptional performance of Dell Computer in recent years illustratesan innovative response to a fundamental competitive factor in the personal computer industry—the value of time. This article shows how Dell’s strategies of direct sales and build-to-order production have proven successful in minimizing inventory and bringing new products to market quickly, enabling it to increase market share and achieve high returns on investment. The Dell case illustrates how one business model may have inherent advantages under particular market conditions, but it also shows the importance of execution in exploiting those advantages. In particular, Dell’s use of information technology (IT) has been vital to executing both elements of its business model—direct sales and build-to-order—and provides valuable insights into how IT can be applied to achieve speed and exibility in an industry in which time is critical. Many of the insights gained from this case can be applied more generally to other time-dependent industries, suggesting that the ndings from the Dell case will have implications for a growing number of companies and industries in the future. build-to-order, business model, clockspeed, customer relationships, Dell Computer, direct sales, distribution channel, information technology, time-basedcompetition, virtual integration “It isn’t so much that we have a new economy, as we...
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...Profitability in the personal computer industry is very low because it is one of the most competitive industries that exists today. Consumers are constantly demanding newer and better technology in computers, and because this market is in such high demand, other companies want to enter the industry. It is very ironic that the profits of the PC industry are so low since the technology required is so complex and the products sell for such a high price. In analyzing why the profitability in the PC industry is so low, it is helpful to look at Porter’s five force model for an explanation. Competition (rivalry) is the biggest reason for why companies in the PC industry make such a small profit. In 1981, IBM published most of the specifications for their PC system so that an “open architecture” could be formed, in order to encourage software developers to “write programs for the IBM PC and to spur other firms to make compatible peripherals such as printers” (2). Because these specifications were made public, many IBM clones began to appear, which created many similarly-powerful competitors. Compaq entered with a low-priced portable clone, Dell Computer Corporation was established, and other competitors such as Hewlett-Packard shifted to the IBM standard (2). This industry is also so competitive because making PCs is not an arduous task- many companies manufacture them, and computers are all relatively homogenous products. They are manufactured by assembling standardized parts:...
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...Case Analysis Dan Demers GS 604, Thursday 5:00 – 7:20 Matching Dell: Dell’s Key Strategic Issues At the close of the case, Dell is presented with two key strategic issues. The first strategic issue facing Dell is the movement of rivals seeking to mimic Dell’s direct sales model, while the second strategic issue is the declining trend in pricing in the Personal Computer Industry and the effects this trend will have on the operations and profitability of both Dell and Dell’s Rivals. In this case analysis, I recommend that Dell answer these issues by assuming a Cost Leadership in a Broad Market strategy to win the price war on cost, establish strategic relationships with system integrators and resellers to counter the product diversification threat of multi-offering Rivals, and strengthen its brand presence internationally to enable continued market growth. Personal Computer Industry: Industry Structure Analysis In this analysis, I define the Personal Computer Industry as that which is comprised of computer manufacturers responsible for the assembly of personal computers, either in entirety or with the assistance of contractors or channel partners. Dell is included in this definition, as are Dell’s Rivals highlighted in the case. In applying Michael Porter’s Five Forces Modeli, it is clear that the Personal Computer Industry is largely unfavorable when viewing the industry facts specific to 1998. Industry Rivalry is high, with many players of similar size relative to...
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...Strategic Management Case Study October 8, 2013 Sophie Yanez University of the Incarnate Word Table of Contents I. Introduction II. Dell’s Strategy a. Vision Statement b. Mission Statement c. Strategies and Objectives III. Recommended Vision and Mission Statements IV. External Assessment a. Porter’s Five Forces Model b. External Factor Evaluation c. Competitive Profile Matrix V. Internal Assessment a. Value Chain b. Internal Factor Evaluation VI. Porter’s Five Generic Strategy VII. SWOT Analysis a. SPACE Matrix b. Boston Consulting Group Matrix c. Internal-External Matrix VIII. Strategy and Objective Recommendations IX. Recommended Implementation Plan X. Strategy Review and Evaluation References Appendixes I. Introduction Dell was founded in 1985 under the name, PCs Limited by Michael Dell who at the time was a college student of the University of Texas. In 1988 the company’s name was changed to Dell Computer Corporation. The company is headquartered in Round Rock, Texas and is the world's #3 supplier of Personal Computers (PC) behind HP who ranks as #2 and Lenovo who ranks as #1 (According to IDC worldwide quarterly PC tracker). Dell provides a broad range of technology products for the consumer, education, enterprise, and government sectors. In addition to its line of desktop and notebook PCs, Dell offers network servers, data storage systems, printers, ethernet switches, and peripherals, such as displays and projectors. It also markets...
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...personal computer market are astonishing given the amount of time it has taken them to reach the point they have reached right now. Dell has ventured into other products like printers, however; it has been criticized for modifying its printer cartridges to only work with Dell computers. Despite this shortfall, it remains one of the most popular personal computer sellers in the world. Who are this organization’s competitors? Customers? Suppliers? New entrants to this marketplace? Dell’s competitors are fellow PC manufactures and makers in the business. These include Hp, Microsoft, Toshiba and NEC. Its suppliers are mostly from the Eastern countries including Asia-Pacific and Japan. The Eastern countries generally offer their parts at a cheaper price than most suppliers offer and therefore making it easier for Dell to compete in the market despite the fact that it does not make most of the parts it assembles into computers. Dell’s suppliers include AMD, Cypress, Parade, Sonix, and Coolit Systems. Dell’s customers include personal computer home users, corporate organizations and governmental agencies. There are no new entrants in this marketplace. The threat of new entrants comes mostly from China where the...
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...At the close of the case, Dell is presented with two key strategic issues. The first strategic issue facing Dell is the movement of rivals seeking to mimic Dell’s direct sales model, while the second strategic issue is the declining trend in pricing in the Personal Computer Industry and the effects this trend will have on the operations and profitability of both Dell and Dell’s Rivals. In this case analysis, I recommend that Dell answer these issues by assuming a Cost Leadership in a Broad Market strategy to win the price war on cost, establish strategic relationships with system integrators and resellers to counter the product diversification threat of multi-offering Rivals, and strengthen its brand presence internationally to enable continued market growth. Personal Computer Industry : Industry Structure Analysis In this analysis, I define the Personal Computer Industry as that which is comprised of computer manufacturers responsible for the assembly of personal computers, either in entirety or with the assistance of contractors or channel partners. Dell is included in this definition, as are Dell’s Rivals highlighted in the case. In applying Michael Porter’s Five Forces Modeli, it is clear that the Personal Computer Industry is largely unfavorable when viewing the industry facts specific to 1998. Industry Rivalry is high, with many players of...
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...A Direct Threat to the Status Quo An Analysis of the PC Industry and Dell, Inc. I. Personal Computer Industry Summary a. Industry Profile b. Typical Industry Competitive Strategy c. Porter Model Evaluation d. Globalization of the Industry e. Importance of I/T to the Industry II. Dell, Inc. a. Dell Company Profile b. Market and Financial Performance c. Competitive Strategy Statement d. Significance of Information Systems e. Strengths and Weaknesses of Dell, Inc. III. Structured Analysis of Information Systems Use a. Strategic Option Generator b. Roles, Roles and Relationships c. Redefine/Define d. Significance of Telecommunications e. Success Factor Profile IV Final Analysis a. Success of Business Strategy and I/T Use to Date b. Have the Above factors Positioned Dell for the Future? Objective of this paper A thorough analysis of the PC Industry yields a unique look at the most dynamic market arena in the last 25 years. This analysis paper seeks to offer just that: an in depth view of what it takes to succeed in this marketplace. While focusing on the international end-user and corporate markets, important topics such as threats, tactics, and future trends of the core market players will be scrutinized. Further, we offer an in-depth look at how Dell Inc., one of the market’s most successful players, deals with these threats and competition...
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...can be brand loyal and prefer to have matching components for their PCs. Dell has a quality reputation which customers know and trust. Dells expansion into data storage hardware, switches, handheld PCs, Printers, and Printer Cartridges and software products represented an effort to diversify the company’s product base and to use its competitive capabilities in PC and servers to pursue revenue growth opportunities. The expansion into different products and services complemented sales of PCs and Servers. In 1995 Dell had a 2% market share in the server market, increasing to 30% in 2008. Dells idea to sell Data Routing switches proved to be a clever strategic move as they were able to price products 2 and a half times less than the market leader at the time Cisco. This resulted in Dell shipping 1.8 million switch ports in the period of a year. Senior Dell executives saw external storage devices as a growth opportunity because the company’s corporate and institutional customers were making increasing use of high speed data storage and retrieval devices. Competition in the IT industry can be a challenge. So for any company to survive within that industry, it has to have the ability to harness the basics of its core competencies to the very maximum. This is an inventive design that Dell learnt from the onset and is now positioned to reap the dividends. Computers and computing are the main focus of the IT industry in its entirety. And because Dell has taken dominance of the greater...
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...Abstract……………………………………………………………………………….....3 Introduction…….…………………………………………………………………….…4 Dell Timeline……………….…………………………………………………………. 5 Mission Statement….……………………………………………………………….….6 Objective……………………………………………………………………………….7 Strategy...........................................................................................................................7 Financial Performance ...……………………………………………………………..13 Dell’s Evaluation……………………………………………………………………..15 Recommendation……………………………………………………………………..22 Conclusion…………………………………………………………………………….23 References…………………………………………………………………………….25 Abstract This case study examines the marketing strategy and innovation practiced by the Dell Computer Corporation IT details the history of the company which made its way in the industry by building custom configurations of personal computers. A major theme of this case is Dell’s build-to-order strategy which has been a success in marketing as well as an overall strategy in supply chains across the country. This case details how well Dell has cornered the personal computing home office market and also the manner in which it derives a substantial amount of its revenue from its small business clients. It also addresses potential problems in Dell’s strategic management and possible solutions to help them stay on top. Introduction History Dell was founded in 1984 by Michael S. Dell, a student at the University of Texas, who with $1,000...
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...Dell was founded in 1984 by Michael Dell, while he was a student at the University of Texas with only $1,000; he presently is the CEO and chairman of the board for the corporation. The original name of the company was PCs Limited and was changed to Dell Computer Corporation in 1988; then to Dell Inc in 2004 (Hitt, 2011). Dell Inc is one of the leading technology companies that offers a broad range of products, including desktop, personal computers, servers, networking products, storage, mobility products, software and peripherals, and services. Today, Dell has global revenues of over $60 billion and employs more than 78,000 individuals. Despite this tremendous growth, the organization has remained committed to its core values. The “Soul of Dell” creates an ethical framework in which people are the common thread which links the organization’s current position and future aspirations. The organization’s mission is “…to be the most successful computer company in the world at delivering the best customer experience in the markets we serve” (Soul of Dell, 2006). The vision of the company is: “…to lead in all regions we serve. The foundation of our success is the same in the United Kingdom and France, China and Japan, Canada and other countries. Customers want technology products that are relevant to them, offer great value and can be easily purchased and used. That’s what our team around the globe consistently delivers” (Fiscal 2005 in Review, 2005). Considering variations in customer...
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...Marketing | Dell | New Horizons Case Study | | | 7/1/2012 | | Executive Summary In 1984, at the age of 19, Michael Dell founded Dell Computer with a simple vision and business concept; that personal computers could be built to order and sold directly to customers. Michael Dell believed his approach to PC manufacturing had two advantages: (1) bypassing distributors and retail dealers eliminated the markups of resellers, and (2) building to order greatly reduced the costs and risks associated with carrying large stocks of parts, components, and finished goods. Now, that concept picked up and arrived at Dell being the multi-billion dollar leading computer manufacturer in the world with 2001 revenues reaching $32 Billion and return on investment of 335%. However, things started to plummet by 2001 and Dell experienced, for the first time, a -10% decline in sales and unprecedented cutthroat competition from HP and IBM. Dell Corp. had to make difficult decisions on how to sustain its profitability in light of its broad product portfolio - PCs, workstations, servers and storage products for a broad cross-section of customers in the United States and worldwide. Fueled with ambition and determination, Michael Dell is set to maintain his company's leading position in these tough times. Dell, facing a predicament of whether they should maintain their strategic course or fundamentally change it in order to achieve the targeted growth rates, managed to acquire three important...
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...Major Case Assignment Case: Dell 2009 Concordia University John Molson School of Business July 22, 2010 INTRODUCTION Situation Synopsis After almost 20 years of unprecedented growth and industry leadership, Dell has started losing market share to its competitors: HP, Apple, Acer and Lenovo. Furthermore, its stock price has plummeted from its record 1998 high of US$139.88 to almost US$20.00 in July 2008. Due to poor performance, the founder of the company Michael S. Dell has returned to the company as CEO and has devised a plan to bring back Dell as a market leader in this industry and to improve its stock price. Company’s Current Strategy Vision: To be the world’s leading supplier of computer systems Mission: To enable millions of businesses and consumers to get online for the first time Objectives: Improving Dell’s stock price Corporate/Business Strategy: • Outsource full system manufacturing facilities in China for retail business. • Split product design departments into commercial and consumer teams. • Listening & reaching customers, expanding and customizing their product and service portfolio • Low cost structure - drive costs out of the company’s supply chain and expand into foreign markets • Grow company in consumer, enterprise and emerging markets 1. EXTERNAL ANALYSIS 1.1. General External Environment Demographic: Global commercial and consumer markets; Wide range of income distribution among customers from individual...
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...in 15 years. This is largely due to their extension of the direct model with information technology and the World Wide Web. The Internet became a worldwide tool for reaching Dell’s customer base and gave the company the ability to directly do business with partners and customers all over the world, one at a time, at no additional overhead. This successful business model put much emphasis on the customers. From the beginning to the end of the transaction, Dell understood completely what the needs of the customers were and this ony led to a network of satisfied customers with the potential to do business again and again in the future. However, the direct-sales business model was merely a tool for Dell to do business. If the success of Dell was based solely on this model, Dell would have not been able to rise to the top of the competition in two decades despite being a late entrant. Many competitors of Dell duplicated the model and tried to do business the same way as them. However, there are a few core elements that differentiate Dell’s strategy: build-to-order manufacturing, mass customization, partnerships with suppliers, just-in-time components inventories, direct sales, customer service, and extensive data and information sharing with both supply partners and customers. Through this strategy, the company hoped to achieve what...
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