Industry Analysis Case Study

Dell Business Model (A): Strategic Inflection Points in the PC Industry

OR

Abstract:
Dell Inc. was the second largest PC Company in 2007 in terms of global market share. The success of Dell was largely attributable to its direct selling business model, which was suitable for corporate buyers and bulk purchasers. Dell had an in-built advantage of lower costs due to its highly efficient manufacturing operations and supply chain management efficiencies. However, with the changing competitive dynamics, Dell was losing its cost leadership in the industry. Dell's cost advantage against its competitors was eroding as competitors were following practices like mass manufacturing and just-in-time inventory management. After Hewlett-Packard became the market leader in 2007, Dell was considering various options to sustain and regain its leading position in the PC industry.

Pedagogical Objectives:

• To understand the concept of business model innovation in the context of an organisation's success
• To understand, how the new competitive dynamics when unaddressed would undermine the success of existing business models.

Keywords : Dell; Computers; Business Model; Michael Dell; PC retailing; Segmenting; Targeting; Positioning; Innovation Management Case Study; Active Inertia; Hewlett-Packard; Compaq; Lenovo; Transformation; Strategic Inflection Point; SIP