Matching Dell Case Study
Laura McCraine
1. Review the attached slides labelled “Chapter 2 UMP—slides” on Brightspace for a
discussion of the PC industry. Why has Dell been so successful despite the low average
profitability in the PC industry?
 Dell expanded their value chain to reduce supplier/buyer power – their ‘Direct Model’
took orders from customers, custom-making them to specifications, then shipping direct
o PC industry competitors had many middlemen – distributors, resellers, and retail
sites
2. How have each of their major competitors (IBM, Compaq, HP, and Gateway) responded to
Dell’s competitive advantage? Briefly, how effective has each been?
 IBM had strong corporate sales force and service organization (61% of mainframe
computer market)
3. What should each of Dell’s major competitors do now (at the time of the case)?
