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In 1984 Michael Dell started the dell computer corporation with $1000 in start up capital.

In 1999 the company became the number one PC maker of the US. Dell presumed that customization, fast delivery and low price would give his company a higher profit margins over IBM and HP . In 2003 the company extended its product portfolio to the consumer electronics market by launching flat panel TV s , Dell Digital Jukebox , USB key drives and Windows mobile powered PDA s. Soon dell topped the list of top 10 most admired companies with a market share of 33% in the US market, while HP and IBM found no place on the list.

2006 was the year of setbacks. Company lost its leadership to HP. Customers complained of shoddy support services . Dell was isolated from its customers and lost on the AMD processors. In the mature PC industry , the low cost low style approach that made Dell number one in the PC industry seemed outdated and it did not spend much on R&D compared to its competitors. The direct selling model failed to gain a significant market share in the largest emerging markets of Asia Pacific. The company hinted at layoff or workforce realignment and the SEC launched an informal investigation against the company s accounting practices.

Hewlett-Packard (HP), Dell, Acer, Lenovo and Toshiba constitute approximately 60% of the total global market share The Laptop market is growing at a fast rate because of change in work life of consumers. There is a need for "anytime anywhere" access to information reduction in prices and affordability has increased sales. duty free import of Laptops Awareness Core competencies: - Online customer "bespoking" of each computer built - Minimisation of working capital in the production process - High manufacturing and distribution quality - reliable products at competitive prices

Position Customization Customer Database Business Model: Command over supply chain

Market Research Business Model Weak Relationships Recall of Computers No propriety technology


Emerging Markets Exploring the new segments Increase per capita consumption Diversification Rebranding

Continuing same Business Model Failure in China Weak Relationship : intermediaries Government Legislation & Exchange rates Customer Satisfaction

Direct selling Build to order Sophisticated MIS (vertical integration ) Offer latest products faster than the competitors :They believed in focusing on best solution rather than best technology

1) Failure of Replication of direct selling strategy in consumers electronics division 2) less investment in research and development as compared to its competitors 3) failure in understanding the trend of the Chinese market : Chinese preferred to see the product which contradicted its direct selling model

4) Dell's conflicting priority and unclear strategy lead to declining sales as they started focusing on time spent per call rather than satisfaction of customers 5)Dell refused to use AMD Which was faster and better and more energy efficient 6)Dell was more reactive rather than proactive

1) Focus on innovation- increased R&D spending to establish first mover advantage. 2)Divesting 3) Expansion into services - Dell would have a respected reputation as a consultant given the firm's internal success at manufacturing and valuechain efficiencies. 4)Reinvigorate Differential advantage- this will include the enhancement of customer service, the addition of suppliers, new marketing campaigns, the modification of retail sales and the expansion of turn-key solution