MATCHING DELL CASE ANALYSIS This analysis describes the case of computer and peripherals industry especially the successful management of Dell Computer Corporation which grew twice as fast as its major rivals like Compaq‚ Gateway‚ Hewlett Packard and IBM. The main reason for the success of Dell was their "Direct Model" of selling computers which eliminated all traditional channels like distributors‚ resellers and retailers. Traditionally all its competitors
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Matching Dell 1. Describe Dell’s strategy. 2. What are the key trade-offs involved in Dell’s strategic positioning? One trade-off is Dell’s strategic positioning of personalized computers refrains it from the benefits of supply-side economies of scale. The personalized products and customer-centric services mean higher cost. The other trade-off is that Dell loses sales opportunities to a variety of distributors by focusing on direct sales. Although the strategic positioning of direct sales can
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Matching Dell 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‚ Hewlett Packard
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Dell Case Memo To: Michael Dell Due to competitors including IBM‚ Compaq‚ and HP attempting to mimic the business model of selling directly to end users‚ Dell must exploit its core competencies to maintain its leadership position in the direct sales channel. In order to understand why cultivation of core competencies is crucial to the future success of Dell in this period of increasing competition‚ we will examine which competencies have led Dell to be successful in the past‚ what the competitive
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Matching Dell 1. Perform an Industry analysis on the personal computer industry Substitutes Buyers • Compaq • IBM • HP • Hacer • GateWay • Apple • Large and midsize Business • Government • Small Business • Individual Customers • Educational • Most of them have a strong purchasing power and a easy way to change of supplier in commodity PC product Suppliers Barriers to entry in this Industry • Intel • Microsoft • Others • They have a strong Power • Intel and Microsoft
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80 ’s when IBM launched its first PC series and later on when numerous small companies entered the market. PC is a new product and companies had to create the demand to it from the scratch. We shall apply the Porter ’s 5 Forces model to examine the PC market and see how forces of competition influence the profitability of the market players. (See Appendix 1 for detailed description of how does certain parameter influence the market.) Entrance barriers are: The initial investment is relatively
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1. Evaluate the attractiveness of the PC industry. In short‚ at the time of the Matching Dell case study the PC industry was essentially in a boom‚ and particularly in the United States. Steady growth and expansion continued from the first waves created in the mid-1970s by firms like Apple‚ and exploded in the 1980s with IBM’s first PC offering. Companies likely envisioned a huge potential for growth due to the fact that PC had become attainable as a household commodity‚ and was almost certainly
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DFI 501: FINANCIAL MANAGEMENT TIME VALUE OF MONEY Amortizing a Loan An important application of discounting and compounding concepts is in determining the payments required for an installment – type loan. The distinguishing features of this loan is that it is repaid in equal periodic (monthly‚ quarterly‚ semiannually or annually) payments that include both interest and principal. Such arrangements are prevalent in mortgage loans‚ auto loans‚ consumer loans etc. Amortization
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Matching Dell Case Analysis When analyzing a firm’s competitive advantage‚ it is important to look both at its revenue and ist cost side. In this particular case‚ Dell’s competitive advantage can be mainly attributed to its reduced average costs. In general‚ the reduction of average costs can be mainly traced back to Dell’s improved Supply Chain Management by the following measures: • A decrease in the cost of capital commitment can be achieved through just-in-time production‚ which is facilitated
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Environment The PC industry can be analyzed using Porter’s Five Forces. The first force is threat or barriers of entry. Here‚ the threat is high and barriers are low. Although certain brands own the majority of the market‚ the costs to manufacture are extremely low‚ and the prices of these components are declining yearly at 25% to 30%. The capital required is relatively inexpensive‚ as well. Also‚ unbranded “white box” PC makers have become prevalent overseas; showing anyone who can make a
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