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Opportunities and Threats of Dell Personal Computer

Essay by   •  February 13, 2012  •  Case Study  •  314 Words (2 Pages)  •  1,770 Views

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Opportunities and threats of Dell personal computer

Opportunities:

* Diversification strategy by introducing many new products to its range.

* Personal computers are becoming a necessity now more than ever. Customers are getting more and more educated about computers. Second-time buyers would most likely avail of Dell's custom-built computers because as their knowledge grows, so do their need to experiment or use some additional computer features.

* The internet also provides Dell with greater opportunities since all they have to do now is to visit Dell's website to place their order or to get information.

* Since Dell does not have retail stores, the online stores would surely make up for its absence. It is also more convenient for customers to shop online than to actually drive and do purchase at a physical store.

Threats:

* Competitive rivalry that exists in the PC market globally.

* New entrants to the market pose potential threats.

* The threat to become outmoded is a pulsating reality in a computer business.

* Price difference among brands is getting smaller.

* Dell's Direct Model attracts customers because it saves cost. Since other companies are able to offer computers at low costs, this could threaten Dell's price-conscious growing customer base.

* With almost identical prices, price difference is no longer an issue for a customer. They might choose other brands instead of waiting for Dell's customized computers.

* The growth rate of the computer industry is also slowing down. Today, Dell has the biggest share of the market. If the demand slows down, the competition will become stiffer in the process. Dell has to work doubly hard to differentiate itself from its substitutes to be able to continue holding a significant market share.

Technological advancement is a double-edge sword. It is an opportunity but at the same time a threat. Low-cost leadership strategy is no longer an issue to computer companies therefore it is important for Dell to stand out from the rest.

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