Essay on Matching Dell Case Analysis

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Matching Dell

Outline with General Questions

Read the following instructions before proceeding. 1) Write in a continuous, narrative style within each question. Keep section headings. 2) The questions in the outline are to help you analyze the case and develop your own thought. 3) Limit your memo to three pages of text. Diagrams and tables do not count as part of the three pages of text. Do not use bullet points. 4) Double-check your grammar before submission. It matters! 5) Upload your write-up in Word format to WISE.

What can we learn from this case?

1) Barriers to imitation (entry): it illustrates how fit among numerous activities, tradeoffs between positions, historical commitments, and …show more content…
It also had the highest return on sales which is 8%, the highest return on equity which is 62.9%, and the highest return on invested capital which is 186%. Besides these, Dell’s days of inventory are only 7 and SG&A/sales ratio is 9.8% which are both lowest among the 5 companies. These indicators all represented the efficient and low-cost of its business model. Dell took 15.1% of the USA PC market share. And it also has the highest ratio of ROA which is 21% and lowest inventory to asset portion which is only 4%. Among all the financial statement ratios, Days of Inventory can measure the inventory level of a Dell well. In 1998, for this ratio, Dell’s is 7, IBM’s is 49.4, Compaq’s is 34.2, Gateway’s is 10, HP’s is 70.4. We can easily find that Dell is the best one within all the competitors.

4. Principal Issue

The principal issue of this case is a strategic evaluation of Dell’s competitive positioning relative to its competitors’ current and future reactions. 5. Alternatives (1pt)

Alternative 1, first, Dell launched its Web site in July 1996 and designed custom Premier Pages for its thousands of Relationship Customers. Second, Dell hired a number of seasoned managers and began sell to resellers. It operated at a very inventory level with fast turnover and its investment was highly profitable.
Alternative 2, IBM became a strong competitor by moving to an Authorized Assembly Program (AAP) and explored ways to expand its
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