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Competitive Strategies Case Studies »  Dell vs Lenovo: The Competitive Strategies in China
Dell entered China, the world's fastest growing PC market, in 1998. Though it was a late entrant, Dell initially did well through its direct selling business model that primarily targeted the industrial and public service departments. But this model left out the Chinese consumer's desire to touch the product before buying it. Even the actual growth zones, the third and fourth tier cities, were overlooked. But the same Chinese turf was tamed by a domestic brand, Lenovo. Its relationship and transactional business model - coupled with a highly efficient supply chain network - helped Lenovo corner 35% of market share, dipping Dell's further. So should Dell alter its business model is just one of the many questions discussed in this case.
Pedagogical Objectives
  • To discuss critical success factors in the Chinese PC market
  • To understand and contrast the business models of Dell and Lenovo
  • To analyse the reasons behind Dell's declining profits and falling market share in China
  • To discuss Dell's choices to gain a market foothold in China.
 
AUTHOR(S) Amjad Khan Rajendar Singh Rathore
INDUSTRY Personal Computers
AVAILABLE AT www.ibscdc.org www.ecch.com
REFERENCE NO. COM0164  
YEAR OF PUBLICATION 2008
TEACHING NOTE Available
STRUCTURED ASSIGNMENT Available
KEYWORDS
Chinese PC Industry; Business Models; Direct Selling Business Model; Relationship and Transaction Business Model; Den Xiaoping; Joint Ventures and Partnerships; Chinese Consumer Behaviour; Acquisition of IBM's PC Division; Market Entry Strategy; Supply Chain Management; Competitive Strategies Case Study; Developing a Business Strategy for China; Critical Success Factors in Chinese PC industry; Business Model Comparison; Second Mover Disadvantage; Challenges Faced by a Foreign Player
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