Both Dell and HP are two strong players in PC industry which refers to an industry where companies produces PCs (desktops and notebooks), handheld devices (smart phones and tablets), and workstations. However, with growing global expansion, Dell and HP’s performance differs. Dell, once the world’s largest PC maker in 2001, has continually lost its market share to HP and Acer since 2007 (Guglielmo 2009). The cause is rooted in two differences of these companies: company diversifications and core competences. Therefore, how firms can continually survive in the PC business is more of an issue for Dell than for HP.
Nevertheless, survival is not enough. Mainly because of the fast declining average selling prices (ASP) annually, both Dell and HP’s PC business face pressures from thinner profit margins (Menn 2010) Therefore, to win the battle, finding a new growth opportunity should be in the center of Dell and HP’s future strategy. Hence, this essay first presents the background of these two companies. It then looks at how PC business can survive by analyzing the causes of Dell and HP’s different performances in PC business. Thirdly, it briefly evaluates four options as a future growth engine.
Motivation | Dell | HP |
Pre 1970sMarket and Resource Seeking | Not born yet | Provide growth1959: Establish the first foreign marketing organization and manufacturing plant in Europe, but did not focus on PC business |
1980s-2000sCompetitivePositioning | Capture global scale1990: Expansion to EMEA: Europe, the Middle East and Africa 1993: Entries into APJ: Asia Pacific and Japan | Match Dell’s scale in PC2002: Merger with Compad Computer Corp. |
1990s-2000sWorldwide Learning | Recruit skills, expertise2007: Decide to refocus on innovation and set up more R&D centers.2009: 7 design centers | Leverage global intelligence1990s: HP Labs opens in Japan and Israel2010: 23 HP Labs operate in 7 countries |... [continues]
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