KEY STRATEGY ISSUES
Dell is facing multiple strategic issues which may impede on the company’s top position in the computer hardware market. This section addresses the four key strategic issues that Dell should address in order to maintain its prominent market position.
First, Dell faces slow growth for its primary product: the personal computer (PC) in a saturated U.S. market. The majority of U.S. corporate and education PCs will be replacement units affected by a technological upgrade cycle within the next two years. Therefore, as Dell attempts to maintain its dominant position, the company should focus on product customization and superior relationships with suppliers. This strategy enabled Dell’s past success but had become diluted over the last five years. The company should continue to improve itself in these areas in order to remain the top computer hardware differentiator.
Second, the erosion of Dell’s brand value continues due to the perception of declining customer service. Although the company prides itself on superior customer service, recent surveys suggest that Dell’s results recently declined in this business segment. Dell’s executives are aware that quality customer service is a key element of the company’s success and are reportedly working towards improvements.
Third, Dell’s inability to serve all market needs due to the current strategy of limited vendors in its supply chain. Dell brings few products to market and leverages technology created by other companies effectively and efficiently. Dell also remains committed to chip supplier, Intel. Although this enables Dell to offer PCs at high value to consumers, it also limits the company’s ability to supply diverse customers. The company should consider enabling itself to offer more customized products by increasing relationships with more diverse suppliers
Finally, Dell’s market footprint