Dell And Mac

Dell & Mac

Dell Inc. is a trusted and diversified information-technology supplier and partner, and sells a comprehensive portfolio of products and services directly to customers worldwide. Dell's climb to market leadership is the result of a persistent focus on delivering the best possible customer experience by directly selling standards-based computing products and services. Revenue for the last four quarters totaled $54.2 billion and the company employs approximately 63,700 team members around the globe.

Michael Dell, the computer industry's longest-tenured chief executive officer, on a simple concept, founded Dell in 1984: that by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add unnecessary time and cost, or can diminish Dell's understanding of customer expectations. The direct model allows the company to build every system to order and offer customers powerful, richly configured systems at competitive prices. Dell also introduces the latest relevant technology much quicker than companies do with slow-moving, indirect distribution channels, turning over inventory every four days on average.

For more than 20 years, Dell has revolutionized the industry to make computing accessible to customers around the globe, including businesses, institutional organizations and individual consumers. Because of Dell's direct model--and the industry's response to it--information technology is more powerful, easier to use and more affordable, giving customers the opportunity to take advantage of powerful new tools to improve their businesses and personal lives.

Dell has demonstrated this effect time and again as it enters new, standardized product categories, such as network servers, workstations, mobility products, printers and other electronic accessories. Nearly one out of every five standards-based computer system sold in the world today is a Dell. This global reach indicates our direct approach is relevant across product lines, regions and customer segments.

In case of any new entry, it will be very hard for any new company to enter PC industry which it's already passed the shacking stage of the industrial life. The shacking stage consider as a final point for all companies to determine whether they have the ability to continue or leave the industries. There are many reasons that imposed some companies to leave for example, raising the cost of the product in which it could squeeze the profit out. In this point, new companies would face many barriers for entry:

The brand loyalty in which buyers prefer the products of any established company like Dell, HP, or IBM. Therefore, to change customer preferences is too costly.

A) Absolute cost Advantages in which entrants cannot expect to match the establish companies lower cost structure for many reasons:

* Superior production operation processes due

* Control of particular inputs require for production; labor, materials, equipments or management skill.

* Established companies have access to cheaper funds because existing companies represent lower risk than new entrants do.

B) Economics of scales in which large volume of production would lower a company's cost structures.

C) Customer Switching Cost would cost the customer the time, energy, and money to switch from product well- known to new product.

Therefore, it would be very threaten for new company to enter the industry unless if the company has the ability to compete directly with those who are already in the market.

According to Porter there are five forces that shape competition within an industry. The first one is risk of entry by potential competitors. Dell has a good position in the industry because they have brand loyalty and absolute cost advantage. Dell is extremely committed to direct relationships with their customers, making the customers very loyal. They try to provide the best products and services, as well as outperform the competition with value and superior customer experience. Dell also has the lowest cost structure in the industry. In order to minimize their cost structure, Dell manages its supply chain. In other words, they minimize the costs of holding inventory. It has the lowest inventory in the industry, about five days worth of inventory on hand. Other companies have about 30, 45 or even 90 days worth of inventory on hand. The second force is rivalry among established firms. Dell's rivals are Compaq, Hewlett Packard, IBM, Gateway, and Apple computer. The rivalry among these companies is strong, but since Dell launched the price war in 2001, all the companies have been losing money. After this, Dell managed to stay on top because he has the lowest cost. The reason for this is that the company delivers the products to customers by using the Internet as a direct selling device eliminating in the end any wholesalers and retailers. The company also provides the lowest prices to its customers and as mentioned before, it has the lowest inventory. The third force is bargaining power of the suppliers. The suppliers are no real threat to Dell. They actually have a good relationship and the prices are fair. The fourth force is bargaining power of buyers. Well the buyers don't have much power here. Dell does not need to worry about any middleman and the customers seem satisfied with the prices since Dell is the lowest. And the last force is threat of substitute product. In this force there is a high threat of another company's product to substitute. But Dell does have an advantage. They allow their customers to completely specialize the product they want through their specifications. And Dell manages to do all of this within three days. This is something others cannot accomplish.

MAC

Apple Computers are at the top of their game at the moment, coming out with hardware and software products that are attractive and useful. They push technology to the limit with products such as the iPod, iMac G5, PowerBooks, iTunes and Mac OS X. They retain customers with their useful products they provide to their customers, but they use their modern trendy image as a marketing strategy to attract new customers. They target young people at the age of 16 to 35, and this target market is the largest in the computer industry. These are the people that use computer technology the most for work and for pleasure in their everyday lives. In the next five years, Apple will still probably