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They adopted the build-to-stock value chain model, keeping arm's-length transactions between specialist suppliers, manufacturer, distributor, retailers, and end users. This scale manufacturing resulted in low average profitability. As a result, the PC industry inevitably became a red ocean. However, in the mid-1990s, Dell Computer Corporation made a miracle in creating a blue ocean by employing a shorter value chain model, selling PCs to customers directly and eliminating the time and costs. Dell's great success arouses the competitors' immediate steps to the new blue ocean.
Dell's Successful Direct Sale Strategy
Michael Dell said: "It was too late to challenge the technical standard and the dealer network had been done already...
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Common topics in this essay:
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- Recommend how Dell should react to slower growth and increased competition in its core market segments. Explain how your new or modified positioning strategy enables Dell to leverage some of its existing advantages.
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