Following rapid growth in the 1980’s and early 1990’s, 1993 presented Dell with several challenges related to changes in the PC/server market, technological setbacks that resulted in a laptop recall, and issues surrounding sales and distribution. To combat, Dell is considering three major strategic agendas that would affect product development and international distribution.
* Laptop Development and Distribution: The increasing demand for laptop computers poses the question if investments in technological development can yield sales required to assert Dell’s competitiveness in the market. Dell is currently at a reputational loss after its 1993 laptop recall, however new technology and low cost of market entry offer doorways for Dell to override past setbacks. * PC/Server Development: In consideration of investment into PC/server development, advantages exist with high price ceilings and existing technological and reputational prestige. * International Channels: Global operations have evolved into diversified models dependent upon the preferences of international subsidiaries. Dell’s main concern here is whether or not to reorganize its channels to integrate a standardized model. Given that the majority of Dell’s international sales fall within Western Europe—where the a more direct model of distribution exists—it is in Dell’s better interest to use this model as the basis for international standardization.
A close analysis of current market structure will provide further reasoning supporting these actions as the basis for Dell’s impending actions and restructuring.
Building Strategy for Re-Entry into Laptop Production
Laptops are gaining popularity in both corporate and household markets, potentially matching the desktop as a primary household/work computing device. Between 1992 and 1994, laptops grew from 14.5% to approximately 20% sales volume of the computer market shared with PCs and servers. Looking...