Competing with Dell

Essay by andersonUniversity, Master'sA, March 2004

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Dell has enjoyed rapid growth from its modest beginnings in a dorm room. Their success can be attributed to a highly effective strategy, which all five elements of Hambrick and Fredrickson's strategy diamond framework reinforcing each other.

The arena's in which Dell operates are well defined: the company sells computers directly to customers. It serves primarily corporate customers and offers high-performance PC's at relatively low prices. Dell's geographic scope is worldwide, or at least all countries where conditions support the having of a PC. Dell not only tailors each PC's to the specific customers order, but also has it delivered to the customer within 36 hours of the initial order. The company does not deliver its product itself, instead relying on third-party shippers such as UPS and Airborne Express. Additionally, Dell has a 24 hour hotline to trouble shoot any technical problem the customer may be having. When the problem requires an on-site visit, Dell contracted service providers like Unisys to perform the work.

Problems requiring an on-site visit were resolved within 24 to 48 hours.

As its primary vehicle for getting to its chosen arenas, Dell employs its Direct Model and deals directly with the end customer. Through its own internal development, Dell expanded its business, focusing on corporate and government agencies. Dell did not engage in acquisitions. This reflects management's confidence that the company already possesses all the ingredients to be successful and continue to grow.

Dell attracts customers and beats competitors by offering several important differentiators. First, its PC's are regarded as very reliable and of high technical quality. Second, for the technically savvy shopper, the direct model is more convenient. These PC's are customized to buyer's specifications, and assembly commenced only after Dell received an order. Third, the company strives to make customer fulfillment...