The paper “ Dell Computers - Bargaining Power of Buyers and Suppliers, Rivalry Pressure from Substitute Products, Value Creation and Measurement” is a brilliant example of a case study on marketing. The purpose of this paper is to conduct an intensive industry, customer and value creation analysis for Dell Computers to ascertain its existing market position while still making sure to provide relevant recommendations. Industry analysis indicates that Porters’ 5 forces remain to be very high due to the existing economies of scale and a larger number of competitors and suppliers. Recommendations provided include the following; It is important that SMEs contemplating entering the market to ensure that they enjoy a stable liquidity position that will facilitate possible growth from areas of investments and, also to make certain that they can access readily available resources for operations. It is also recommended that the established companies within the industry ensure that they cut down on their market niche by way of formulating and implementing a unique competitive advantage that is totally different from others. Recommendations for Value Creation/ Measurement for DellThe company ought to find distinctive ways of connecting the entire system with objectives of management through a cross-functional financial measure chain. The value creation system should show clearly the direct effects it has on the overall management metrics in place. The firm should ensure that necessary resources are allocated to ensure that the entire value creation measurement relates specifically to each task in place.
For instance, enough personnel should be employed to help with customers calling for technical assistance at any given moment. Customer Analysis: RecommendationsThe company should ensure that its virtual platform remains as active as ever in order to eliminate costs related to middlemenThe company should also equally invest in physical stores as a way of developing firsthand customer relations. The firm should ensure to employ distinctive improvements in its online purchasing systems in order to prevent possible hindrances that might compel customers to seek alternatives Dell Computers was founded in 1984 by Michael Del for the purpose of manufacturing and selling customized personal computers to potential customers in the United States and the world over.
Presently, the firm is one of the leading hardware manufacturers that its operations in numerous countries across the globe (Kwatinetz & Schutte, 1992).
The firm is engaged in the development, manufacturing and providing services for a given range of computer systems that include; desktops and notebooks. Subsequently, using a direct-marketing approach, it also provides software, market peripherals, and other services. Just like other companies in the industry, Dell Computers sells most of its products and services to a different set of customers that include; larger corporations, government agencies as well as SMEs and personal users. The company’ s main competition arises from such other companies as IBM, Compaq and HP (Kwatinetz & Schutte, 1992).
Thus, the purpose of this paper is to conduct an intensive industry, customer and value creation analysis for Dell Computers in order to ascertain its existing market position while still making sure to provide relevant recommendations (Kwatinetz & Schutte, 1992). Industry Structure & AnalysisPorter’ s 5 Forces & Recommendation The threat of Entry by Other CompetitorsEconomies of Scale: the firm’ s immediate competition entering into the personal computer manufacturing business is considered to be highly positioned. However, SMEs intending to enter the market will be met with a high cost of goods sold since they will only sell fewer units hence a need to improve on their relative gross margins to ensure future survival (Park & Young, 2004).
A classic example of this is Ideasign that was later phased-out of the market when the costs of goods sold become extremely higher prompting them to increase prices for the products hence lowering their competitiveness.