Dell
Dell Computer Corporation is more successful than its competitors because of its 'Direct Marketing' strategy. Dell figured out the direct sales model early and embraced the internet early. It also entered the business market at the right time, promising good enough prices combined with good enough service.The competitive advantages of Dell over its competitors are:* Dell's main competitive advantage has been its direct marketing strategy. It is about giving customers what they want, when they want it.* Dell has JIT inventory system and very good supplier integration. This has helped in cutting down inventory costs and also reduces the lead time in serving customer order. The case specifically mentions about Dell's shipper shipping Dell computer along with a monitor from Sony directly to customer. In contrast, IBM gets its supplies from supplie
Competitors Analysis:Dell's main competitors have been Compaq, IBM, HP and Gateway. This has forced Dell's competitors to focus on direct marketing strategy. With the help of this information, Dell has been able to provide high level of customer service. * The flexibility provided by Dell to its customers in buying their systems coupled with excellent customer service has raised customer's expectations. This way Dell gets better price margins than its competitors. But HP is also feeling the pinch of not moving to Direct Marketing and now trying initiatives to cater to this requirement. Since Dell's competitors have historically sold machines through resellers, distributors and retailers, it has become exceedingly difficult for the competitors to support both the strategies. Gateway has followed Dell's footsteps and has been successful in implementing the direct marketing strategy. * Dell does not have any resellers or distributors in its supply chain and hence there is minimum cost in selling to customers. Their excellent fit between strategy and processes has helped Dell in staying ahead of its competitors, who are finding it difficult to implement this strategy. Gateway has not been successful in this area and has refocused its energies in catering to the small businesses. Though Dell's direct marketing strategy could be easily copied by its competitors, the competitors have not been successful in implementing the strategy as the fit between strategy and activities undertaken to implement the strategy, has been very difficult to achieve. This involves sufficient cost and time delay. Conclusion:The price differential between Dell's products and competitors' products as mentioned in the concluding passage of the article is not a big worry for Dell. These customers give repeat orders and hence locking of these customers has been a significant competitive advantage for Dell.
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