1.0 DELL’S COMPANY BACKGROUND AND IT’S CORE BUSINESS

Dell Incorporated is an American privately owned multinational

computer technology company based in Round Rock, Texas and United

States that supports computer system plus its associated merchandise and

services. The founder is Michael S.Dell and it is founded on 1st February

1984. Dell’s company empowers countries, communities, customers and

people everywhere to utilize technology to understand their aspirations.

Customer trust Dell to deliver technology solutions that help them to do and

achieve more things, whether they are at home, work or school.

Dell seeks to profitably grow the desktop and mobility job. In

summation, it heightens the online buying experience for clients. Dell has

improved its competitiveness through cost savings initiatives, which focused

on improving design, supply chain, logistics and operating expenses just for

adjusting to the changing dynamics of the industry. They also created a cost-

efficient way to sell their computers by ‘cutting out the middle man’ and

selling their computers directly to the customers. Dell has a strategies of

direct sales and build to order production that have proven successful in

minimizing inventory and bringing new products to the market quickly,

enabling it to increase its market share and achieve high returns on

investment.

2.0 DELL’S MAJOR COMPETITOR

Dell’s major competitor is HP (Hewlett-Packard). HP is a multinational

information technology (IT) company that sells hardware, software, and

related business services. It founded in 1939 by Stanford University

Engineering graduates William R. Hewlett and David Packard. The product

lines include PCs and other computing devices, enterprise and industry

standard servers like storage devices, software, printing machines and

scanners. The company introduces handheld calculators that are the first

commercially distributed data processing system.

HP discovered that it can run for 24 hours beating out its competitor

that is Dell’s company which can make the Latitude line of laptops that

feature only in 19 hours of battery life. HP redesigned their laptop line a year

ago for the consumer dv series, the design was received well and is popular

with consumers. The glossy finish lid and eye catching imprint finish gives a

cool and classy look. HP stuck with essentially the same design for the

dv6500t as the proceeding dv6000t, except changed the imprint finish

slightly. The dv6500t has what is called a "Radiance" imprint finish. The

imprint is part of the plastic casing that can be sure it will never scratch or

wear off like paint sometimes does from laptop lids. This features is beat

Dell’s product.

According to research firms, PC shipments in the third quarter went

along their growth spurt with higher than expected figures and HP narowed

top PC vendor Dell’s lead. The resolutions of the quarter also showed that HP

has closed unit sells gap with Dell. In the second quarter, HP trailed Dell by

400 000 units. While in the third quarter the difference was only 62 000

units. HP performed best in the United States, though it was growing well in

other regions. Dell also did well in all regions, while IBM though it saw good

results in Europe and Asia struggled in the United States market.

3.0 AFFECT OF INTERNET TO DELL’S COMPETITIVE FORCES MODEL

The best-known framework for analyzing competitiveness is Michael Porter’s

competitive forces model. Dell Computer Corporation use Porter’s model to develop strategies

to increase their competitive edge. Porter’s model also demonstrates how Internet can make Dell

more competitive.

First of all, the competitive forces include the threat of entry of new competitors. For

Dell, the Internet increases the threat that new competitors will enter the market by reducing

traditional barriers to entry. Frequently, competitors need only to set up a Web site to enter a

market. The Internet can also increase barriers to entry, as when customers come to expect a

nontrivial capability from their suppliers.

Beside that, the bargaining power of suppliers also the one of competitive forces. The

Internet enables Dell’s buyers to find alternative suppliers and to compare prices more easily,

thereby reducing suppliers’ bargaining power. From a different perspective, as Dell use the

Internet to intergrate it supply chains, participating suppliers can lock in customers, thereby

increasing suppliers’ bargaining power.

Furthermore, the bargaining power of customers or buyers also be classified as

competitive forces. The Internet provides customers with incredible amounts of choices for

products, as well as information about those choices. As a result, the Internet increases buyer

power. However, Dell can implement loyalty programs where they can use Internet to monitor

the activities of millions of customers. Such programs reduce buyer power.

Other than that, the threat of substitute products also be defined as one of the competitive

forces. New technologies create substitute products very rapidly and the Internet makes

information about these products available almost instantly. As a result, Dell are in great danger

from substitutes. However, the Internet also can enable Dell to build in switching costs, which

will result in costing customers time and money to switch from Dell to other competitor

company.

Lastly, the competitive forces also include the rivalry among existing firms in the

industry. In the past, proprietary information systems provided strategic advantage for Dell in

highly competitive industries. The visibility of Internet applications on the Web make

proprietary systems more difficult to keep secret. Therefore, the Internet makes strategic

advantage more short lived.

4.0 DELL’S COMPUTER BASED INFORMATION SYSTEMS (CBIS)

CONTRIBUTE DELL’S COMPETITIVE STRATEGY

As a multinational enterprise, Dell Computer Corporation is very competent in executing

its global strategy and provided it with an initial competitive advantage that was unrivaled in the

first half of the 2000s. It is a major manufacturer of personal computers, computer peripherals

and software.

Among the leading producers of computers in the worls, Dell sells its products directly to

customers through the Internet and mail-order catalogs rather than through retail outlets. By

using this direct business model, Michael Dell belived that Dell could best understand customers

needs and efficiently provide the most effective computing solutions to meet those needs. Dell

ables to retailers that add unnecessary time and cost, or can dimish Dell’s understanding of

customer expectations.

Dell’s website provides customers with information on the different products they offer

and that are available to them. Their existing website offers products for homes and the business

sector. The website is also available in different languages to make it easier to customers. They

also need to have a system that once a order is placed, it will provide the customer with order

status updates automatically.

Beside that, the inventory control systems also used by Dell in process to sell products

directly to customers. This systems is up to date and reliable to prevent problems to arise. The

inventory system of Dell makes sure that anything the consumer need will be available to them at

any given time. It is also what the company uses to know if certain products are still available or

misuse of the inventory system may cost problems to the company.

Through this information systems, Dell’s corporation has been able to create effective

cost leadership and differentiation strategies as mechanisms to obtain a competitive advantage

over its competitors. Through cost leadership strategies, the corporation is concerned with cost

reduction related with value chain activities and also through the decrease in the total amount of

the resources used in the production of its products. Dell has been able to employ differentiation

strategies by differentiating its operations through engagement of higher quality production. To

achieve high quality products, Dell has been able to conduct its value chain activities better than

its competitors.