CASE ANALYSIS

MANAGENT DECISION CASE: DELL MARKETING

BY KHAIRIL ANUAR BAHARI, NOORSA RIZA BIN JOHARI, MUHAMMAD SHAKIR BIN ZULKAFLI

PRESENTATION OUTLINE

INTRODUCTION ISSUES RECOMMENDATIONS SUPPORTING MATERIALS EXHIBITS

INTRODUCTION
HP usurps Dell as Market Share Leader in PCs

To the countless believers in Dells marketing strategy of mass customization , the news was nearly unbelievable.

ISSUES

Expensive product such as rechargeable baterry packs. Revenue analysts estimated that Dell loss $900 million less in net income versus prior year Solidly of marketing strategy one trick pony Failed to adapt to the changing world and technology and instead of investing in new sources of differentiation has focused on cutting costs.

ISSUES

Compromised customer service and lower perceived product quality Difficulties to attract customers to Dell web site PC market share has shifted away from desktops and into netbooks,widespread publicity that the factories that make notebooks also make them for other companies

ISSUES
Maintaining sustainable competitive advantage in a cutthroat business is a huge challenge for Dell Computer. Strategies need to be implemented to continue its edge. Dells business model needs to present a sustainable competitive advantage. Dell Computer has won the e-business battle for one sole reason: Dell was playing alone because competitors are, at the moment, trapped with their traditional off-line channels and they cant move because they would lose all their actual sales; they are trapped in what Lester Thurow defines Hobbesian choice (Sloan Management Review, 2001, Vol.42, No.2 pp.112). Threats to Dell Computer But, as customers are using the internet more and more, the competitors will be forced to stop using the traditional distribution channels and focus on selling online. This is where the problem will start for Dell. Once key competitors will play the same e-game like HP and IBM, Dells e-business operational advantages will be reduced drastically or worse, disappear. Those who differentiate themselves will be the only ones who can survive the intense competition.

RECOMMENDATIONS
As Dell to regain back the customer perception there was an action to take as recommendation: - Changes their one trick pony strategy as it is only relevent for 10 years back - Make their product more unique, difficult to replicate, superior to the competition, sustainable and applicable to multiple situation.

RECOMMENDATIONS

Introduce new innovative services instead of just offering standard services based on software packages of which it does not have any patent. The strategic positioning of Dell in the actual ebusiness does not allow the company cost advantages nor product differentiation. Dell should affiliate with other players in e-malls and compete using the combination of huge range of products offered by their multiple malls partners. A company web site is not enough for Dell.

RECOMMENDATIONS

Rethink its Virtual Network Dells e-business strategy consists of outsourcing almost all the value chain activities in order to lessen price. This is a short-term (tactical) cost view and may not be effective in the long run as competitors are getting more resourceful in providing lower-priced products. Dell should reconsider the make or buy strategic thinking focusing primarily on activities and components that are could potentially introduce future technological breakthroughs in PC industry.

RECOMMENDATIONS

From Internet CRM to Ubiquitous Marketing

Dell should utilize a wider array of strategic points such as branching out into similar businesses that would enable them to come in contact with more prospective customers such as : - UMTS phones; - Interactive TV; - Internet-enabled POS terminals;

- E-wallets.
Dell can introduce and develop ways to offer a customized approach to any media.

RECOMMENDATIONS

E-marketing Dell could tie up with Microsoft or make use of popular social networking sites to advertise their products. Dell, for instance, could negotiate with Gates to include a Dell logo or a window in Windows desktops showing the latest Dells e-ads any time customers connect on the internet.

RECOMMENDATIONS

Enhancing Customer Purchase Experience

Strategic ways to attain this would include: a) Providing link to complementary products (i.e. Microsoft software) in their websites;

b) Providing customer with a choice of system based on their needs such as creating custom computers designed mainly for computer engineers or construction engineers not based on product specifications such as the kind of processor or size of monitor.

RECOMMENDATIONS
Dell should explore emerging computer markets in other parts of the world such as Europe, China and India. It should also explore ways to generate attention from education markets particularly college students. Product differentiation through more aggressive sales marketing strategies could do this