Powerful Essays
Dell and Hewlett-Packard have been competing for the top position in the personal computer industry for years. In 2006, Dell used to have 16.6% worldwide market share in the PC industry when compared with HP’s 16.5% share, but later fell to 14.9% while HP’s share rose up to 18.8% in 2007.
Dell offers a broad range of personal computer related products for the consumers, businesses, educations, and government sectors. Amongst its competitors, Dell stands out as a world leader in direct sales of computers. It has a flexible and reliable supply chain management that reduces costs. It reduces inventory and risks of operating in such a competitive industry where technology is constantly changing. Michael Dell believed his build to order strategy would give him several competitive advantages over his rivals, like HP.
Unlike Dell, HP’s sells PCs through distributors, retailers, and other channels (346). For example, Staples and Best Buy have HP products online and in local stores for consumers to physically see and touch it. Consumers may even find HP’s products from independent distributors in regions where HP are not available. In order to maximize manufacturing efficiencies, big-volume order from large enterprise customers were assembled to each customer’s particular specification. The remaining units were assembled and shipped to HP’s retail and distribution partners.
Hewlett-Packard had their largest acquisition with Compaq in May 2002. Carlyle Fiorina, the CEO of Hewlett-Packard at that time believed the acquisition of Compaq will transformed HP into the world’s largest computer maker. She explained, “With Compaq, we become No. 1 in Windows, No. 1 in Linux and No. 1 in Unix... With Compaq, we...

... middle of paper ... bring revenue to 80 billion, according to Michael Dell. Such an optimistic view comes from the fact that more and more people are online. In 2003 there were 500 million devices with internet connectivity and in 2007 12.5 billion. Cisco believes that by 2020, 50 billion devices will be connected. Such a promising outlook was probably good enough for Michael Dell and Silver Lake, private equity firm to make a 24 billion dollars deal with Dell's shareholders to buy out the firm and go private. Each shareholder will get $13.75 per share plus 13 cent dividends. After 25 years as a public company, Dell will remove its shares from the NASDAQ Stock Market. Dell was also part of the S&P index for 17 years. This new Dell will pose a new threat on rivals because it is now willing to take more aggressive steps without worrying if they will meet investor's expectations.
Get Access