...Matching Dell Outline with General Questions Read the following instructions before proceeding. 1) Write in a continuous, narrative style within each question. Keep section headings. 2) The questions in the outline are to help you analyze the case and develop your own thought. 3) Limit your memo to three pages of text. Diagrams and tables do not count as part of the three pages of text. Do not use bullet points. 4) Double-check your grammar before submission. It matters! 5) Upload your write-up in Word format to WISE. What can we learn from this case? 1) Barriers to imitation (entry): it illustrates how fit among numerous activities, tradeoffs between positions, historical commitments, and threats of retaliation by other players can deter imitation. Interestingly, the retaliation threats come from both immediate rivals and downstream “partners.” 2) Different types of imitation attempts: “Straddling” by Compaq and IBM, “repositioning” by Gateway, and potentially new entry by some members of the channel. 3) The case allows us to quantify Dell’s cost advantage and estimate the portion of that advantage which is threatened by the imitation attempts of others. 1. Environment a. Threat of New Entrants: It is low. Because high technology industry is highly competitive with continuing developments. Costumers are more likely to purchase on famous brands and be loyal to those familiar brands. So there...
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...1. Is the PC industry attractive in the mid to late 1990 ? Strong Economy Growth, Emergence of New Services Fierce Competition (IBM, Compaq, HP Gateway) , 2. Why do you think it become this way ? (1) A. History B. Products World Wide Web, E-mail, less than $ 1,000(‘97), 45.5% of household in the USA(’98), etc. Declined PC prices (numerous global manufacturers) - Housing, keyboard, monitor, modem, etc. - Microprocessor (Intel, 80~90%) ☞ Sub-$1,000 market by AMD (50%) Soft Ware ⇒ Bundled PC - Operating system : Windows - Application s/w : office productivity applications Large & midsize businesses, governments - MIS Dept. (highly knowledgeable staffs) Small business and offices - Lacked MIS staffs (reliability, performance, brand, etc.) Individual consumers - Independent org. such as Consumer Reports ※ Sensitive to price and brand name Educational institutions (3~6%) C. Customers U.S. PC Sales (’97) 32.7% 3.6% 39.8% Large/Mid Small Home Education 24.0% 2. Why do you think it become this way ? (2) D. Channel Retailers (Circuit city, CompUSA 14.1% margin, etc) Distributors (Ingram Micro 5~7% margin) Integrated resellers (MicroAge, Vanstar) Direct distribution (telephone, Internet, shipper) E. Manufacturing Basic assembly-line techniques The Cost at $1,000 Components prices declined by 25~30% - Roughly 1% per week (‘98) Apple, HP, IBM - 2~3% of sales on advertising - 25,000 sales staffs of IBM White-box PCs - No AD. & nonexistent sales forces...
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...Matching Dell Como en cualquier negocio o circunstancia, una empresa o persona tiene que tomar decisiones que impliquen dejar algo a un lado, estos “trade offs” son parte de cualquier estrategia, no se puede hacer todo siempre. El punto del caso para mi es claro, si analizamos como estaba el negocio de IT en 1998 vemos un Dell creciendo con una estrategia clara con una excelente ejecución, vemos la competencia que quería imitar lo que estaba haciendo Dell, sin ser su estrategia, y una ejecución regular tendiendo a ser positiva. En mi opinión, lo que en ese caso tenía que hacer Dell es seguir ejecutando con su modelo directo, le venía funcionando, los resultados eran excelentes, lo único que les recomendaría es estar atentos al punto de inflexión donde esta estrategia dejara de ser tan exitosa, para adaptar el cambio de manera rápida y ordenada. Lo que tenía que hacer HP, Compaq, etc, es definir si quieren dedicar sus recursos, modelo de negocio, etc a la venta directa o seguir como estaban operando con canales muy definidos, pero tratar de atacar los dos sectores iba a traer algunos costos de complejidad, y diferencias con alguno de los modelos, ya sea un “enojo” de parte de los resellers, o un “enojo” de parte de los compradores directos. Se pueden hacer análisis de porter, u otro tipo de análisis para confirmar la hipótesis, pero el hecho es que aun cuando hay maneras muy buenas de hacer las cosas en otros lados (en este caso la manera de Dell), la solución no siempre...
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...Matching Dell Case Analysis 6/27/2013 Submitted By: Group-4 Manjul Shrestha Megha Shrestha Mohit Basnet Sujal Dhungana Submitted To: Mr. Rupesh Krishna Shrestha Facilitator, Marketing Management Kathmandu University School of Management Background The case “Matching Dell” basically describes the history, market structure and environment of computer and peripherals industry especially emphasizing the success story of Dell Computer Corporation. Despite the fierce competition from the IBM giants and the IBM clones, Dell stood out as a successful name by focusing exceptionally on operations and manufacturing, measuring performance through several performance metrics and concentrating on products and market trends. Dell Computer Corporation emerged as a small dorm room part-time business in the mid-1980s, the era of booming popularity and purchases of the personal computers when every family wanted to own a PC for their homes and every employee wished to have a PC on their desk. So, consumers were demanding PCs and there was Dell bursting on the scene with its “direct approach”, handling each customer individually through customized PCs, delivering its core strategies of improved customer satisfaction and minimum inventory holdings. While all the other big competitors were running towards developing their retail and reseller chains and relationships, Dell with its unique approach focused on handling its customers directly and thus was rewarded with huge raise...
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...Harvard Business School 9-799-158 June 6, 1999 D Matching Dell O N Between 1994 and 1998, the revenue of Dell Computer Corporation rose from $3.5 billion to $18.2 billion, and profits increased from $149 million to $1.5 billion. The company’s stock price rose by 5,600%. During the same period, Dell grew twice as fast as its major rivals in the personal computer market and tripled its market share. In the first half of 1998, Dell reported operating earnings that were greater than the personal computer earnings of Compaq, Gateway, Hewlett1 Packard, and IBM combined. On Forbes magazine’s list of the richest Americans, Michael Dell, the 33-year-old founder of Dell Computer, ranked fourth with an estimated worth of $13 billion. He trailed only Bill Gates, Warren Buffett, and Paul Allen on the list and was worth more than Gates had 2 been at the same age. O Dell Computer had pioneered the widely publicized “Direct Model” in the personal computer (PC) industry. While competitors sold primarily through distributors, resellers, and retail sites, Dell took orders directly from customers, especially corporate customers. Once it received an order, Dell rapidly built computers to customer specifications and shipped machines directly to the customer. T The success of the Direct Model attracted the intense scrutiny of Dell’s competitors. By 1997, headlines such as “Now Everyone in PCs Wants to Be Like Mike,” “Compaq Reengineers the Channel: Will...
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...UOIT 12 Strategic Management Matching Dell Case Majuran Kulendran 100367320 BUSI 4701U – 002 Word Count - 895 UOIT 12 Strategic Management Matching Dell Case Majuran Kulendran 100367320 BUSI 4701U – 002 Word Count - 895 Q1. The attractiveness of the personal computer industry tends to be at its growing stages as many companies were shifting towards developing personal computers for home use. Porters 5 Forces could be used to analyze the industries attractiveness in this era. Threat of Substitutes - High In the case the threat of substitutes is quite low as the primary organizations are Microsoft and Intel. During this phase it there didn’t seem to be much competitors in that segment of the market. In terms of personal computers the threat of substitutes are currently high. Technology is changing more and more as new forms of computers are coming out such as laptops, netbooks, tablets, smartphones, which in turn create a threat of substitutes (Kynin, 2012). With the weight of cost and benefits taken in to consideration computers tend to have greater threat. Buyer Power - High The variety of computers and options the large businesses have are in such a wide range and ultimately the have a high buying power. It really sums to their preference in price, quality and service (Kalpesh Agarwal, 2009). “Buyer are powerful if: buyers possess a credible backward integration threat – can threaten to buy producing firm or rival” (Quick MBA, 2010). Buyer power...
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...The following information supplements the information in the Dell Wireless WLAN Card User Guide. May 2008 Manual Addenda Dell Wireless 1397 WLAN Half Mini Card Power Characteristics Current draw, Power Save mode: 24 mA (average) Current draw, Receive mode: 153 mA (average) Current draw, Transmit mode: 230 mA (average) Power Supply: 3.3 v ----------------------------------------------------------- Dell Wireless 1510 WLAN Half Mini Card Power Characteristics Current draw, Power Save mode: 21.6 mA (average) Current draw, Receive mode: 480 mA (average) Current draw, Transmit mode: 522 mA (average) Power Supply: 3.3 v ----------------------------------------------------------- Draft IEEE 802.11n Interoperability Dell Wireless 1500, 1505 and 1510 cards are 802.11n Draft 2.0 certified. At the time of product release, these cards were validated through testing to work with the following 802.11n wireless routers/APs: · Netgear WNR834B FW 1.0.1.4 and later · Netgear WNR350N FW1.0 and later · Linksys WRT300N FW 0.93.3 and later · Buffalo WZR-G300N FW 1.43 and later · BelkinF5D8231-4 NOTE: • Regardless of the make of wireless router/AP, wireless clients should always be able to connect to the wireless router/AP at legacy link speeds. You should check with the wireless router/AP vendor for AP firmware and client software updates. ----------------------------------------------------------------------- Tray Icon Display "By default, the tray icon is disabled...
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...Case 1 Matching Dell Discussion Questions 1. Draw a product-market structure for Dell’s PC’s. 2. Conduct a Five Forces Analysis of the PC Industry in the late 1990’s. Is the industry structurally attractive? 3. We know that Distinctive Capabilities are apparent in a company’s activities (procedures) give a firm a competitive advantage. Enumerate these distinctive “activities” for Dell. 4. How successful have efforts to match Dell been? 5. What should the rivals do now? 5. What should the rivals do now? According to the data provided within the case we can see that with the existing models that all companies have adopted dell now only has an advantage in their inventory turnover. According to the statistics provided dell takes around 7 days to get rid of its inventory where as Compaq, IBM, HP and Gateway take 34.2, 49.4, 70.4 and 10 respectively. But the price difference between dells products and its competitors is almost nonexistent. However in trying to cut down the gap in the inventory turnover IBM and Compaq as well as the other rivals are facing problems of not being able to provide the products demanded by the consumers on time. This shows that the strategies adopted by the rivals are not properly being implemented as implemented by dell hence they are inefficient and ineffective. Hence to tackle these problems there are two strategies according to which the competition can move forward. Firstly the competitors can either work on the flaws which...
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...BaselineScience.com B a s e l i n e S c i e n c e , I n c . • w w w. b a s e l i n e s c i e n c e . c o m Matching Dell: A Strategic Case Analysis Dan Demers GS 604, Thursday 5:00 – 7:20 Matching Dell : D ell’s Key Strategic Issue s 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...
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...Matching Dell - Case Summary by jaina2004 | studymode.com Matching DELL History: IBM Market Leader in Mainframe –market share 61%, starts PC business in ’81, in 2 yrs market share is 42% IBM Strategy : • Purchase PC components as against manufacturing inhouse (Main frame) • Open Architecture : OS – Microsoft, Microprocessor – Intel , reason, to encourage application developers and enhance Peripheral market • Sales : o Largely corporate clients - thought its huge sales force o Retail clients through value added resellers – handled, installations, configured SW,customer networks and service part of responsibility • Competition : Apple with propriety architecture had 20% market share, Compac enters in ’82, Dell in ’84, • Competitors strategy :: use resellers for large corporate accounts, due to lack of sales force • 1986- IBM moves to propriety architecture with PS/2 line and rejects 386 chip • 1980-90 – PC performace improved and chip price declined, o New technology advancement of 386DX and Pentium II processors were significant o Windows 3.0 launched in 1990, commonly called Wintel architecture o PC Sales declined in 1990 due to US recession • Post 1990 o Demand picks up due to economic growth, and technology like computer Networking, email and WWW. o PC prices decline to less than 499USD, 45.5% of US household owsn PC in 1998 â–ª Modular architecture prevalent for HW and SW, PC differed depending on configuration â–ª Most HW components sourced my numerous companies...
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...Case Study - Toyota Motors / Dell.com (The Competing Organizational Values Framework) In 1937, Kiichiro Toyoda founded the Toyota Motor Company in Japan as a spin-off from Toyoda Automatic Loom Works to manufacture cars roughly based on the designs of Chrysler and Chevrolet. Toyota emerged from the rubble of war in the late 1950s to become Asia’s premiere manufacturing company and swiftly moved from a regional to a global brand. Gaining a foothold in the United States during the oil embargo of the 1970s, Toyota systematically extended its product array from compact cars, like the Corolla, to mid-size sedans. In the late 1980s, Toyota accomplished the previously unimaginable by successfully introducing, Lexus, a luxury car line to compete with European blue bloods BMW and Mercedes. In fact, the newly introduced Lexus established previously unimaginable initial quality records, and may be said to have been the car that most sparked the quality revolution in the North American auto industry. Today, Toyota is Japan’s biggest carmaker with over $120 billion in annual sales. Toyota is one the few companies that has demonstrated an ability to pursue several directions simultaneously. The traditional organizational identity at Toyota was highly focused and internally directed. Perfecting “lean production” and “just in time” manufacturing techniques, Toyota became symbolized by quality and efficiency which made it a benchmark for automobile manufacturing worldwide. Engineering, extensive...
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...Living in Dell Time 1. Identify and describe all the different types or forms of innovation exemplified in this article by explaining with data and facts from the case (10 points). First they are using a production innovation the just-in-time model. (It is a strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the manufacturing process.) Inventory has been a form of security but this kind of security is very expensive because computer parts are fast moving goods, and if your stock is full of these goods you will lose a lot of money. Kevin Rollins the CEO of Dell said, “inventory is like fish, the longer you keep it the faster it deteriorates.” Eleven years ago Dell carried 20 to 25 day of inventory in their warehouses and today they don’t have a warehouse. But if it fails, its manufacturing operations will crash within a matter of hours. But they also said that if you have your stock full of components, always you will have a lot of the wrong stuff and none of the right stuff. Many companies are not sure if it´s good of running so lean in an uncertain world, because you never safe for terrorist attacks or natural disasters. Another innovation is when they miss a forecast and they see they are running out of 15-inch flat screens they make for example a one week special of 17-inch screens in that time they sell it cheaper and so they lead the customer what they should buy...
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...the selection of audit committee members such as qualifications and independence. Cookie Jar Reserves Cookie Jar reserves refers to the practice of intentionally recording unreasonable estimates or one time transactions during good economic times in order to smooth out activity in bad economic times (Levitt). These transactions directly violate, not only simple human honesty, but also Conservatism, one of the main accounting principles. A real world example of the use of cookie jar reserves is the computer company Dell. In 2010, they paid a penalty to the SEC of $100 million dollars due to their using of cookie jar reserves. To establish their reserves, Dell did not disclose payments from Intel which were paid in order to maintain exclusive use of their microprocessors. When times were tough, Dell drew on these reserves. At one point, these reserves made up more than 70% of their quarterly earnings (Investopedia). This example, first, violates the matching principle, since the payments from Intel should have been recorded as a rebate contra to the variable cost of the microprocessors. More information regarding the accounting treatment can also be found in FASB issue 02-16 entitled “Accounting by a customer for certain consideration received by a vendor.” This situation is similar to...
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...Build-to-order model, Dell, Direct model, PC Manufacturing, SCM, Supply Chain Case Study Abstract The focus of this case study is the supply chain management practices of Dell. Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage. Can Dell regain its market leader position from HP? In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. Recall of Sony battery cells in its laptops brought undesirable media hype to the company. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). Industry analysts felt that, with Dell’s competitors also improving their supply chains and matching Dell’s direct model, the company had been losing its competitive edge. Dell will have to bear additional costs with its foray into retail distribution thereby minimizing its cost advantage. Besides, profit margins of Dell will drop further since it will have to offer incentives to compete with HP in retail stores. Though Dell spruced up its product design and range but Apple is clearly far ahead of it. Many experts feel that such new initiatives will only distract Dell from its supply chain operations. This case study covers...
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...1.0 Executive Summary Dell is considered an industry leader due to their large range of high quality products. Dell PowerEdge servers, Power Vault and Dell/EMC storage systems and PowerConnect switches are superior buildings blocks for enterprise computing. Dell also offers printers, projectors, tablets and phone, HDTVs and home theatre, Axim handhelds and other complementary products. Dell’s support all this products with a broad range of services designed to help customers simplify complex computing. In short, Dell is focused on delivering maximum performance with standards-based solutions while ensuring the right mix of cost effective solutions with value at every level. In that case, Dell’s is not just interested in low prices, but also in high-performance and solid reliability. Today, Dell lost its market position to HP and hopefully realizing that efficiencies are not the means to an end; competition is global and fierce; customers are constantly evolving and business can’t stay still. In this case analysis I will highlights Dell’s SWOTs analysis. This analysis is to identify firm’s strengths and weaknesses and diagnose organization’s threats and opportunities. Moreover I will underline the Dell’ unique and strong competencies as well as others marketing strategy. 2.0 Introduction Dell Corporation is a 27 year-old entrepreneur founded by Michael Dell, the computer industry’s longest-serving chief executive. Dell’s sales philosophy is very simple, that...
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