Dell economics analysis

Essay by ningcoleUniversity, Master's March 2004

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There are many issues and challenges facing the PC and Handheld computer industry. PC and Handheld sales are a test of research and product positioning to capture the largest possible global market share for Dell, IBM and Hewlett-Packard. Globalization is possibly the ultimate issue--which markets should our competitors aggressively enter--should they try every possible market or focus on building on areas of core competency? Also the challenge of choosing the platform that will be adopted by the largest amount of users is an issue, especially in the up-and-coming handheld market.

The data for the PC industry in 2002 indicates a hiccup in world sales. First quarter sales rose and then stagnated by year end. Factors include: inconclusive processor speed improvements, companies keeping PCs in use longer and focusing on updating servers and storage devices and consumers purchasing electronic devices other than PCs (

In terms of product and market choices, the lines have been drawn and for the moment; Dell, IBM and HP are all actively entering as many markets as possible. IBM is the world leader in most hardware categories but has chosen to stay out of the Handheld market, choosing a partnership with Palm instead. HP is challenging IBM globally across the board, although our group's opinion is that their products are generally considered to be inferior to IBM and Dell. HP has recently captured the lead in the world Handheld market, showing that the preference for Windows platform is for now a good move. Dell is the US leader in PC sales, but has not entered the world market aggressively and is under attack by Japanese makers Toshiba and NEC

Business Strategy

Dell's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain...