The strategy Dell currently implements is the cost leadership and maximizes the operational efficiency. This strategy is accomplished through the low cost to reach the low price product and service to obtain the larger market share in order to generate more profit. On the other hand, Dell attempts their excellent supply chain model to control their inventories in low level and maintain the high quality production. Moreover, Dell motivated their employees to be nimble atmosphere to deal with unexpected situation. Dell also provides the good customized customer service to maintain their market share. For corporate strategies, Dell reorganizes their business units to refocus on the core PC business which contributes more than 80% of the revenue. Dell offers the low price strategy to obtain their market share. As the result, Dell has generated the large growing revenue but the profitability is slightly decreasing in recent years (refers to Exhibit 3). Therefore, if Dell increases the company’s profitability, the company needs to improve its competitive position and it is able to respond effectively to demands in the growing market. Through the strategy, Dell may win the completion by squeezing their profit in future in the short run. For the customer segmentation of Dell, there are two major segments: individuals and commercial segments. For the individual segment, customers are looking for the cheap products with functional features. The low price strategy stimulates them to choose Dell. And in the target market, the most customers are coming from the average or below-average income customer for commercial customers, the reliable customer service, high quality and high technology products are getting more satisfaction. Dell’s own customized customer service and the high quality are satisfied the commercial customers.
One imperative issue is that Dell has to spend the high capital initial cost on R&D when...
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