Dell Inc

Executive Summary

Dell Inc., founded by Michael S. Dell in 1983, was one of most successful companies that primarily focused on selling desktop computers. Dell Inc. had pulled itself ahead of its competitors through various strategies, which includes lower prices accomplished by innovative supply chain, smooth logistics through effective inventory control and information system to handle Just-In-Time deliveries, and great customization features on the internet to allow customers mix and match components. However, over the last decade, Dell Inc. started to lose market shares due to its inability to adapt to the changing environment and to stay up with the technological advancement.

This report primarily focuses on facts surrounding Dell Inc.'s competitive advantages that it has been enjoying in its successful earlier years, and what causes Dell Inc. to lose edges to its competitors in the following years. Finally, a few recommendations for Dell Inc. to take away from this report are to stay vigilant about the market, consumer preferences, and competitors for timely strategy planning, and it is critical to invest in Research and Development to keep up the pace of technology and remain competitive in the market.

Issue: Dell has lost its competitive advantage of low cost

Dell has put a lot of emphasis on cost reduction over the years. Dell hunts for low cost suppliers, keeps minimal inventory to reduce storage costs, and moves to the Internet platform to save a lot of its sales and administrative expenses. All of these are successful strategies for Dell to extract high profit margins from each sale especially when they have targeted the higher-end customers, such as the government and large corporations. However, the rise of its competitors, Acer Inc. and Lenovo Group Limited for example, has eroded Dell's market share significantly in this particular segment of the market because they compete specifically on price. As outsourcing...