Introduction
Dell Computers Company operates in the computer industry of the US. The Company engages in development, sales and support of computer services. Michael Dell founded the company in 1984. Dell’s strategy of making sales directly to its clients has enabled it to acquire the position of the market leader in the US computer industry.
Reasons for low average profitability in HP/Compaq PC division
The product life cycle of the HP/Compaq PC division is measured in years instead of months. Unlike Dell Company which comes out with a new model every three months, it takes longer for the HP/Compaq PC division to develop interactive products that supports its computers. The need for customized, rapidly updatable databases of information and courseware elements for re-skilling is necessary to restore consumer confidence in the HP/Compaq PC division products.
The HP/Compaq PC division has not endeavored to offer affordable support services to their customers as compared to Dell. For instance, through insurance of products on transit, Dell customers are more protected from loss before receiving what they have bought. This is not the case at the HP/Compaq PC division.
Most of the HP/Compaq PC division’s products are not properly tailored in their market segmentation strategies. Besides, there is a need to make the HP/Compaq PC division’s products available to customers when needed. At present, the products are not properly tailored to meet the demands of their clients.
The keys to the success of Dell
Despite communication being rated as a high corporate strategy, action planning of communication method is of essence to create solution oriented task and strategy implementation secession. The main success parameters of the Dell Company include customer acquisition, customer retention, quality services, and proactive response to different business situations. For instance, direct engagement with the customers has ensured fast growth since customized products delivered to the customers have created confidence and loyalty in the US market.
Dell’s competitive advantage
Dell Company has an active presence in the US and has an expanding presence in emerging markets such as China, Japan, and Europe. The company’s vulnerability to risk is generally lower since it has endeavored to offer high quality computers that are customized to meet the demands of its clients. Dell offers competitive price tag and discounts as long term strategies. In order to stay afloat, Dell’s competitive pricing has ensured that it remains the choice for middle class income earners yearning for quality customized computers.
Response to Dell’s competitive advantage
Some of the competitors of the Dell Company such as HP and Compaq have embraced amalgamation or consolidation to unite a number of sub brands into a single unit to increase their competitiveness and reduce the cost of running their businesses. The strong amalgamated brand in the form of HP/Compaq PC venture has facilitated the restructuring of effective sales and public awareness of their products to weaken the Dell’s competitive advantage.
Recommendations
In response to the strong competitive advantage of the Dell Company, the HP/Compaq PC venture should resort to developing a good brand positioning as a marketing strategy that guides the marketing plan that illustrates their brand’s essence. Specifically, the branding strategies should be accompanied by reorganization of market segmentation to introduce a direct interaction between the company and the clients when selling products. The company can fortify this relationship by offering free customer online support services. Through online marketing, the HP/Compaq PC venture will be able to acquire almost 40% of the computer market that is currently controlled by the Dell Company.