Industrial Analysis

Industry analysis

High Innovation Turbulence in this industry which is evidently in the maturity stage

Competitor Analysis

The two major competitors are HP and Lenovo

About HP - They are in the same strategic group as Dell

After losing 5% of their combined Market Share they are now gaining ground and in the US have managed to reduce the market share gap between them and Dell by increasing the efficiency of corporate functions and focusing on relationship marketing aimed at both the retailing and consumer industry with the aim of keeping customers loyal and profitable in an efficient way. The forced merger has also allowed the HP to provide a more comprehensive service and by adopting processes similar to Dell Direct Model is now able to compete more efficiently with Dell.

Being established in the retail industry is proving to be advantageous for HP as the multiple distribution channel is providing it with advantages over DELL who are currently still using the Direct Business Model only.

Innovation and new product development is also proving advantageous for HP since it is in tune with the growing customer demands for technological products to be fashions items rather than just micro processors. They can be seen to be adopting multiple strategies focusing mainly however on penetration and expansion in china and expansion and new product development strategies in the US.

The above factors are all contributing to HP s growth in the relatively saturated US market as well as in other regions e.g. APJ we cultural differences can hinder Dell Growth due to the reliance on face to face sales by many consumers.

Lenovo

Very important competitor in the Chinese market and will become an important global competitor as a result of its IBM acquisition. With one single step the company has now become the number three manufacturer world wide

Its strength primarily is a result of the untapped Chinese market compared to the relatively saturated US market. It has the greatest market share in the Chinese market which will allow for high generation of revenue and development opportunities. In addition the company is a local company and therefore will continue to enjoy the licensing and policy advantages provided by the Chinese government further establishing its competitive stance.

The IBM acquisition is a result of the company s aim to gain a foothold in the US market and internationally and established a better position for its self in the business to business context.

Lenovo unlike Dell is not committed to one business model but has a much more flexible approach and adopts which ever model it feel the markets needs. Though exposure is currently limited and not as wide as the exposure IBM alone enjoyed due to limited brand recognition the company has a lot of potential and once it established itself can pose alot of threats for both HP and Dell as a result of its ability to produce high volume equipment at low prices. An ability which would be of great interest especially in the B2B sector which is currently DELL dominated.

Who are Dell

Dell are a Computer solutions company and is one of the largest PC manufacturers in the world. They provide both hardware and systems integration via dell plus offerings

They are positioned as a high quality efficient relatively cheap products and all world renowned for their ability to produced customized computers as a result of their direct business model.

They have been reluctant to modify their model in the past since it has provided them with many an advantage in their major market THE US MARKET however given the cultural differences in different countries which they are encountering as a result of their market development strategies re the Asian market, a wise decision given the saturation of the Us PC Market and the inefficiencies of penetration strategies in such situations.

They produce a wide range of standard sales products which are under the same family branding stratergy all using DeLL in some way or another to ensure brand leverage.

Dell currently faces a number of problems which will be shortly discussed shortly.

Financial