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Dell Case Study As Presented By The Harvard Business Review

847 words - 3 pages

Dell was the first mover with its business-to-customer model and internet sales and services since Dell reinvented the value chain for PC industry. Although China would become the second largest PC market after US, Dell's decision of positioning in this market was very crucial. Direct selling of business-to-customer model through the Internet! Does this create competitive advantage in China like it did in USA and Europe? If not what should Dell do to expand Chinese operations? If so what should Dell do to remain this strategy?The key for success in direct selling model is able to establish strong and consistent relationships with suppliers and customers. At this point, Dell would need information and knowledge about the suppliers and customers at China. There are two ways to create this information and knowledge: one is by joint ventures or alliances, the other is to employ knowledgeable Chinese management team to provide this. Also customer trust is very important. This could be achieved by creating brand awareness.While computers and the Internet became commodity in developed countries such as USA, and UK, there were countries that were lacking of state-of-art information technology structures which enabled the wider usage of computers and the Internet. But globalization of business forces increased usage of computers and the Internet even in these countries which enabled them to develop their information technology structures. Since Dell was planning to enter developing countries with the same direct strategy via internet, they need to be careful about this totally new concept for China. Because Chinese people are not familiar with computers and the internet very much, the only mistake or unsatisfied sale to a customer would create a bad reputation among Chinese people. Dell should try to postpone its internet sales for a while for China until they start to widely use computers. Therefore, Dell should need to redefine its customer base for China from Home and small businesses to large corporate accounts.Case Notes:1.Exhibit 1: Dell is not doing well at worldwide PC sales. Because while Dell's market share is very close to Compaq's market share in the US, it is 5% below of Compaq's market share worldwide. This could be because of Dell's fears when exploiting its direct sales strategy to global markets. Also since customer and supplier relations are very crucial for being successful in direct selling, Dell should have used joint ventures and alliances to sell transnational borders. Because local knowledge is very important.2.According to cross-border...

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