With an increasingly saturated market in the U.S., Dell is faced with several opportunities for growth through product, service, and international expansion. With growth opportunities in both the storage and server markets, Dell must consider the advantages and disadvantages of penetrating deeper into those arenas. Dell must increase market share in areas outside of the United States, where the computer industry is still rapidly escalating. By placing the primary focus on international expansion and utilizing its competitive advantages, Dell's direct model and strategy will succeed globally in further penetrating the growing international regions. Dell's direct model should be incorporated with their strategic decisions and continue their principles of low cost, superior customer value, and virtual integration so that they will be able to increase its market share.
A marketplace is an economic mechanism where buyers with their demand schedule and sellers with their cost schedules meet to trade goods and services.
Prices are determined at the level, which often maximizes the total welfare or surplus of the society. There are several price determining mechanisms that may not rely on markets. For example, governments may dictate market prices for sellers and buyers. Or certain businesses agree on prices through contracts. In these cases, the information and infrastructure that are required to achieve economic efficiency are sometimes overwhelming.
One of the advantages that Dell has over the competition is that they have eliminated the middleman by letting their customers buy directly from the company. The aim of this business model was to lower inventories and cost, while increasing profit margins. Dell's model seems to have worked as their average inventory turnover is four days, which is faster than any of their competitors. The business plan allows its customers to buy directly from the company via the Internet.
There is an emphasis on...