RUNNING HEAD: MATCHING DELL “Matching Dell” “Matching Dell” Question (a) The difference in vertical integration strategy between Dell and the “generic competitor” is the fact that Dell Computer were the forerunners of the famous Direct Model in the personal computer industry. Whereas the generic competitor sold only via resellers, distributors and retail sites, Dell were contacting customers and gathering in information of how they would want their Personal computers to look like in that they seized orders straight from customers (Huang, 1999). Most of these customers were usually corporations who bought personal computers in bulk.
As soon as Dell gathered enough information from the customer regarding his or her specifications of the personal computers, Dell would now result to the task of building the Personal computers as per the specifications of the customer and later ship the computers as agreed. Question (b) Dell is able to generate more economic value per computer sold than the “generic competitor” due to the fact Dell manufactures computers based on the consumer’s taste and preference and therefore Dell has more control on the price of the product.
Each and every computer that is manufactured by Dell is unique and is built according to the customer’s specifications and therefore customers are willing to incur an extra cost for this service hence giving each and every personal computer a higher economic value. This is different from other Personal computer companies whereby they mass produce computers and sell them at a lower price. However, customers are limited in their choice whereby they cannot find a single machine that could meet all their needs and therefore there is lesser economic value per computer (Huang, 1999). Question (c) I feel that Dell’s ability to generate more economic value is a sustainable competitive advantage to a great extent due to the fact that their customers are more permanent as compared to those of their competitors.
This is due to the fact that they make the effort of doing direct consulting with their customers regarding the manufacture of the personal computers they are willing to buy. The satisfaction displayed by respondents who take Dell personal computers as and those who prefer competitor products is much more as they get exactly what they want (Huang, 1999).
They are all contented with Dell products. Dell’s ability to generate more economic value is a sustainable competitive advantage due to the fact that Dell is ranked highly in terms of utility gained from using its product and its brand image In the eye of the customer the major dimensions of Dell’s brand is the fact that it is an company that produces high quality products and gives you value for your money (Das 2009). References Huang, An-Li (June 6th, 1999).
“Matching Dell”. Harvard Business School. Das Narayandas and V. Kasturi Rangan. (2009). “Dell Computer Corporation, ” HBS Case 596-058.6