Case Study: Dell Leverages the Internet Directly

1. Case Study: Dell Leverages the Internet Directly • MGS 3040:04 - MIS • Kurt Cannarella • Mike Bury • David Nguyen • Wes Ortiz

2. How has selling direct given Dell a competitive advantage? • Dell has created an advantage over its competitors by • Creating customizable computers that fully fit the consumers needs • Eliminate the middleman • Reduces costs • Establishes closer relationships with consumers • Locks in suppliers and customers • Promoting deals where accessories and other hardware are cheaper when you purchase a Dell computer

3. Dell’s Revolutionary Achievements • Prior to Michael Dell selling computers to consumers directly, manufacturers would sell their computers to wholesalers then to retail stores, and finally to users. Dell eliminated this by allowing the customer to purchase directly from him eliminating the middleman and drastically reduced prices. By cutting out many of the links on the supply chain, Dell was able to reduce selling prices of computers from about $3000 to $800 which greatly altered the way computers would be purchased in the future

4. Information systems Dell uses to sell directly to the consumer • The most valuable system Dell uses to sell computers would undoubtedly be the internet. • Through the internet customers could • Cut out the middleman by purchasing from Dell Directly • Customize the computer to their needs • Pay their bill directly • Compare and contrast Dells computers vs. its competitors.

5. Dell's Competitive Advantage Programs • Eliminating the middle man -Better customer support -Consumer relationships • Customer Demand -Computer is custom designed for consumer -Every finished computer is already sold • Supply Chain -Close relationship with suppliers - https://valuechain.dell.com/ • Customer Support -Basic to advanced support -Maintain/manage

6. Dell vs. Competition • C-net comparison -Toshiba Notebook -Dell Notebook • Hardware Costs -CPU, Memory, Magnetic/Optical Disks etc. -Upgrades

7. How can HP successfully compete with Dell? • -In some cases HP provides cheaper systems than Dell.-More models to choose from than Dell.-HP website is also very user friendly, but cannot compare to what Dell has.-Almost the same amount of options as Dell, but still lacking a few

8. HP Vs Dell as of Today • HP more diversified than Dell, which is reliant on PCs • Dell shares have outperformed HP but sentiment cooling • Both companies look to IT services to bolster margins • HP, the world's largest technology company by sales, has been a favorite of defensive investors who like its business diversity and market breadth, relentless focus on costs and steady revenue performance. • Dell, which is still in turnaround mode, is the more speculative bet, though its stock has outperformed HP's in the past year as Dell's heavy reliance on corporate personal computer sales means it could benefit more from the rebound in PC spending.

9. Market Share as Jan 2009 • http://www.businessinsider.com/2009/1/dell-losing-market-share-in-anemic-pc-market-dell

10. What information system can HP set up that will better enable it to compete with Dell? • Website-Connect with Others • A list of some helpful information • -HP Consumer Support Forum • -IT Resource Center Forum • -VooDoo PC Gaming Forum • -Creative Printing Community • -Info Management Hub • -Small Business Printing Wiki • Instead of calling and being on hold, you could get a quick answer from the forum.

11. Dell Successful with or without Internet? • Yes because of ability to cut costs • Differentiate operations • Eliminate sales competition • Low costs opened up new computers and technology for the company • End result would be better success with customers than competition