Dell Competitve Advantage

Essay by ccason77University, Master'sA+, February 2006

download word file, 2 pages 3.0

What is competitive strategy? Consists of business approaches to:

* Attract customers by fulfilling their expectations

* Withstand competitive pressures

* Strengthen market position

* Exploits competitive advantage by finding ways to use resources & capabilities to set firm apart from competitors.


Competitive advantage comes from one of two sources:

* Having the lowest cost in the industry

* Possessing a product or offering a service that is perceived as unique in the industry

Another important factor is the scope of the product-market (broad or narrow)

Mix of these factors provide basis for:

* Cost leadership strategy (low-cost strategy)

* Differentiation strategy

* Focus strategy

Dell faces especially stiff competition from the two Japanese giants. Sony, argues that PC growth is nothing like it used to be, and many of the IT players are diversifying their businesses and looking for new growth areas. Companies like HP and Dell are getting into the consumer electronics space because of audiovisual/IT convergence and entertainment becoming increasingly digital.

While there is no news of these companies entering the Middle East markets yet, the utmost confidence is that with the comprehensive product offering, the entry of these new players will have a minimal impact on the business. One thing that stands out clearly is the unmatched brand equity that Sony has - research studies have consistently shown that it is the most trusted and respected brand in the Middle East consumer electronics market. Sony says its strategy to counter the newcomers, as well as traditional rivals, has worked. Over the years, Sony has been extremely successful in consolidating its market leadership position in most of the segments in which it operates in the region. Going forward, the overall strategy is to further accelerate this growth through three main pillars: localized communication,