An Investigation of Dell and Hewlett Packard’s Business Models: How Is Competitive Advantage Created?
An investigation of Dell and Hewlett Packard’s business models: How is competitive advantage created?
Introduction:
Dell and Hewlett Packard (HP) are two of the most influential companies in the PC market. The CEO of HP requires an understanding of how dells strategy allows it to achieve a competitive advantage so that he/she can counteract it. This report has been carried out to provide the CEO with the necessary information to do this. Therefore the objective of the report is to provide the CEO with detailed information on Dell as a business and its strategy. In order to achieve this, first the main strategies of Dell and how they provide competitive advantage will be identified, then the business models and e-business initiatives used by both Dell and HP will be compared, next a review of Dell from its emergence to the present time will be carried out, and finally the use of the internet in creating economic value and sustained competitive advantage for businesses like Dell will be assessed. The findings will then be synthesised, providing an analysis of the key elements characterising successful e-business strategies and initiatives.
Main body:
(1) This section of the report will describe the main strategies used by Dell and how they have helped Dell to achieve a competitive advantage.
A competitive advantage is an advantage over competitors gained by offering consumers greater value, by means of lower prices or by providing greater benefits and service that justifies higher prices (Tutor2U 2005).
In order for Dell to achieve competitive advantage, Direct selling and Just in Time production have been a major part of their strategy. This strategy has enabled Dell to achieve cost advantages over its competitors (Hansen, Nhoria & Tierney 1999).
Direct selling means that Dell sells its products directly to the customer. This allows Dell to earn above average profits as expensive intermediaries in the distribution chain have been eliminated (Enders & Jelassi
Introduction:
Dell and Hewlett Packard (HP) are two of the most influential companies in the PC market. The CEO of HP requires an understanding of how dells strategy allows it to achieve a competitive advantage so that he/she can counteract it. This report has been carried out to provide the CEO with the necessary information to do this. Therefore the objective of the report is to provide the CEO with detailed information on Dell as a business and its strategy. In order to achieve this, first the main strategies of Dell and how they provide competitive advantage will be identified, then the business models and e-business initiatives used by both Dell and HP will be compared, next a review of Dell from its emergence to the present time will be carried out, and finally the use of the internet in creating economic value and sustained competitive advantage for businesses like Dell will be assessed. The findings will then be synthesised, providing an analysis of the key elements characterising successful e-business strategies and initiatives.
Main body:
(1) This section of the report will describe the main strategies used by Dell and how they have helped Dell to achieve a competitive advantage.
A competitive advantage is an advantage over competitors gained by offering consumers greater value, by means of lower prices or by providing greater benefits and service that justifies higher prices (Tutor2U 2005).
In order for Dell to achieve competitive advantage, Direct selling and Just in Time production have been a major part of their strategy. This strategy has enabled Dell to achieve cost advantages over its competitors (Hansen, Nhoria & Tierney 1999).
Direct selling means that Dell sells its products directly to the customer. This allows Dell to earn above average profits as expensive intermediaries in the distribution chain have been eliminated (Enders & Jelassi
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