Table of contents
Case comprehension p. 2
Situation analysis p. 2
Diagnosis p. 4
Alternative choices p. 5
Predicting outcome p. 5
Choice p. 7
Solution outline p. 8
Case comprehension
Dell Computer Corporation was founded in 1984 by Michel Dell, as a result of a growing
demand for his pre-formatted hard-disks and upgraded IBM-compatibles.
Within a year, Dell introduces its first own-design computer system and in 1989, the
company introduces its first laptop. The first laptop introduced did not live up to the Dell
standards, and was therefore taken off the market again.
Dell had to solve the problem of balancing the production of laptops, desktops and servers.
On the laptop market, which Dell was committed to re-enter due to its growing customer
base, there were a number of technological problems. Dell had hired John Medica, lead
developer of Apple computers Powerbook line, and according to him, only one of the
laptops being developed would be able to compete on the market. However, it would take
some time before it was fully developed, so Dell had to reject their customers demand for
laptops. In doing so, Dell made the customers understand that it would not take forever.
Dells way to approach the fact that the company was not able to fulfil the customers
wishes, was through honesty. The question was whether this strategy was an advantage for
Dell or not.
The brand “Dell”, which serves various consumer segments, is efficiently delivering
attributes such as good quality computers along with operative support services. Dell takes
position in direct communication with customers and delivers build-to-order computers.
The value created by using the direct model to sell customized products and by providing
on-site service ranked Dell between market leaders IMB, Compaq, HP. It represents good
performance machines at a reasonable price as well as unique and distinctive “Direct
Model”, while targeting corporate, medium and small sized businesses and home office
consumers.
The advantage of a strong brand, investment in R&D and direct communication with the
customers could successfully lead the company into the laptop market. However, the
laptop market differs from the desktop market in a number of ways. For Dell the main
problem will be the manufacturing process. When producing laptops, most parts will be
delivered by suppliers and Dell just ads the last parts. This limits the degree of
customization possible and since one of Dells most important distinguishing features is
computer customization, the company risks not attracting customers.
Dell needs to find a way of approaching their former and present customers as well as
