How Dell Raised the Bar in the Computer Market

  • Dell’s market entry strategy was to offer customizable personal computers which were not available in the market then. This strategy worked well as it attracted a lot of customers. Dell captured a lot of customers from older competitors like Sun Microsystems.

  • In fact, Dell became a threat to all their competitors in the computer market. In response to the threat posed by Dell, other computer companies quickly tagged along by producing their own customizable personal computers and laptops too. They were able to regain some of their customers from Dell.

  • However, this marked the beginning of a much keener competition within the computer market as competition is at the highest level now. By producing their own customizable computers, they did not only tackle the threat posed by new entrants like Dell, they also raised the competition to another level.

  • Now all the companies are doing all whatever they can to attract the same customers that all of them are fighting for. It is only the customers that stand to gain a lot from the competition. This kind of competition is necessary for the market to grow. All hands are on deck to see which way the pendulum will of competition swing.

  • It is the hope of customers for more entrants to join just to increase the level of competition. The more the players in the computer market, the higher the competition and the better the products and services. Most importantly, this will lead to more competitive prices. In all highly competitive industries, customers are usually the ultimate beneficiaries.

  • All other computer vendors also felt the same impact that Microsystems felt by Dell’s entry into the market. It re-awakened all of them. So, in the bid to offer their products at lower prices, Microsystems had to shorten its supply chain. They found out that Dell’s short supply chain was among the reasons its prices were better. In fact, Microsystems seems to be mirroring Dell’s business activities now. After all, the best way to compete with competitors is to offer all what they offer to customers, if not more.

    Dell and Microsystems are major players in the computer industry and competition has forced them to shorten their supply chain and lower their prices. It is just a matter of time before all other players in the market join and when they do, consumers will be able to buy computers at a cheaper rate. This is why the competition is in the ultimate interest of the consumers. Competitions always lead to four things – Higher quality, lower prices, better after sale support and fairer deals. Competition has also forced Blockbuster to mirror the policies of Netflix. As it always is, customers are the main beneficiaries. Customers no longer have to pay any lateness fees for returning any movie late.

    This is nothing but convenience. They now have the liberty to retain movies until when they can really watch it. Paying lateness fees makes them rush over movies. Hitherto, to avoid paying any fees, customers usually returned movies even when they had not really watched it. That is history now, thanks to competition. Whether the movie is from Blockbuster or from Netflix, customers no longer have to pay any lateness fees. In the same vein, Sun has cut its supply chain for its software and applications shorter. The applications have now been consolidated into one suite of applications. This way, organizations are now aware of what company does what. They can now order all their services from just one company.

    By cutting their supply chain shorter, Sun has rejigged it. Their timely delivery rate is now very close to 100 percent. It is now 95 percent precisely. This is obviously another competitive advantage over other competitors. This implies that others will also have to match the timely delivery rate or lose some of their customers. As usual, consumers are the beneficiaries of the competition-based policy. Manufacturers now align their activities with Sun’s processing pace by generating and customers’ invoices and shipping their orders directly to their doorsteps in a timely fashion. This does not mean that they will skip important steps like assembly, configuration and testing of computers before shipping them. This has also made Sun’s manufacturing partners more timely, efficient and productive and it definitely would have earned them more orders. The main function of customer relationship management is to use the information gathered about customers for better profiling. This is used to figure out the needs, wants, preferences and attributes of all customers in order to anticipate their unique needs and serve them better. Knowing vital information about each customers will help to advise them better and to also help them manage their finances better. When you know the salary, family status, marital status, age and benefits of a particular customer, you will know which of your products and services are better for the customer. For instance, customers that are usually in need of financial advice are the ones that are either retired or very close to retirement.

    A very good marketing strategy is to widen your market segment to be able to attract more customers. This is why market researches should be a regular exercise. They are indispensable to every business. Companies need to install a very effective ERP system that helps to increase the efficiency of their processes by eliminating repetitive ones. A very good ERP system also reduces the manual entry of information into the system. The system will be streamlined for a faster turnaround time. ERP system will also help to consolidate all your records into one big database. It is costlier and more difficult to manage several databases. So it is better to merge all your databases into one big one for better management and easier data retrieval. Another aspect of ERP is reporting. ERP makes reporting easier and faster. A very good ERP system is always up-to-date at every point in time. So, your staff only needs to retrieve the report whenever it is needed.