Case Study 2: Dell's brilliant model that lost the steamApart from that there was a change in customer's preference for Notebook PC away from thecommoditized desktop market. Due to this the direct-to-consumer model also suffered becauseNotebooks can be considered to be more differentiated than desktops, and customers often want tocompare products in person-lift them, type on keyboards, and view screens-before making a purchasedecision. These shifts in the customer preference created an opportunity for competitors to replace Dellfrom its ranking as the world's number one PC manufacturer.In the emerging and changed business market even Dell has stopped its direct-only business model andsells products through third-party retailers. The lesson learned from Dell's struggle is that it is crucial tocontinually keep on assessing a firm's strategic position among changing market conditions. There is nosurety that what strategy is successful today it will dominate forever.Question 1. Evaluate the successful business strategy adapted by Dell that allowed it to remain at the topfor two decades. Why no other company copy could imitate its business strategy for so long?Question 2. Why Dell could not sustain its position among the competitors? Discuss the major reasonsbehind it. Use the resource based view to justify your answer. Case Study 2: Dell's brilliant model that lost the steamMichael Dell started his career from assembling PCs in his dorm room as an undergraduate to heading thelargest PC firm on the planet. Dell's highly efficient, vertically integrated manufacturing and direct-to-consumer model combined to help the company earn seven times more profit on its own systems whencompared with comparably configured rival PCs. Dell could often start a price war and still have betteroverall margins than rivals because Dell PCs were usually cheaper.The business model adopted by Dell was brilliant model that for years proved resistant to imitation. Dellsold direct to consumers but at the same time competitors had to share a cut of sales with the lessefficient retail chains responsible for the majority of their sales. Dell's competitors could not move towarddirect sales because any retailer sensing its computer suppliers were competing with it through a direct-sales effort could easily chose another computer supplier that sold a nearly similar product. In fact HP,IBM, Sony, and so many others saw the advantage of Dell's model but they could not imitate the Dell'smodel they were already entrenched in their business modelsHowever Dell's story had a turning point and Dell's successful model, began to lose steam. Themanufacturers serving Dell's rivals had been observing Dell for nearly two decades and had learned toimprove manufacturing efficiency. The assembly time for contract manufacturer's fell dramatically whencomponent suppliers located themselves near the contract manufacturer. Also when the cost ofcomputing fell, the price advantage Dell enjoyed over rivals also shrank in absolute terms. Consequently itreduced the savings from buying a Dell as compared to the past.

Question

Accepted Answer

Michael Dell was the one who initiated assembling PCs in his room when he was an undergraduate and…