An Investigation of Dell and Hewlett Packard’s Business Models: How Is Competitive Advantage Created? Essay

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An investigation of Dell and Hewlett Packard’s business models: How is competitive advantage created?
Dell and Hewlett Packard (HP) are two of the most influential companies in the PC market. The CEO of HP requires an understanding of how dells strategy allows it to achieve a competitive advantage so that he/she can counteract it. This report has been carried out to provide the CEO with the necessary information to do this. Therefore the objective of the report is to provide the CEO with detailed information on Dell as a business and its strategy. In order to achieve this, first the main strategies of Dell and how they provide competitive advantage will be identified, then the business models and e-business initiatives used
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They hold approximately 8o days of stock, which is much larger than Dells inventory (Breen 2004).
In summary both business models have their good and bad points; I think that a mixture of the two would be most successful. Dells build to order and direct strategies along with HPs customer service strategy would be very successful. (3) In this section I will be reviewing the emergence of dell as a virtual organisation and how it has continued to evolve. This will include a critical review of its current operational performance and assess whether a proactive management style could have mitigated any problems identified.
A Virtual organisation is an Organisation in which major processes are outsourced to partners (Beech & Chadwick 2005). Dell operates as a virtual organisation as it has a very close physical integration with its business partners and suppliers (Dedrick & Kraemer 2001), it sells direct to its customers via telephone or internet and it does not exist on the high street.
Dell, founded by Michael Dell in 1984 (timeline index 2005), began by selling upgrades of IBM compatible machines. By 1985 it began to sell its own brand of PC’s (Dedrick & Kraemer 2001). From the beginning dell operated using the direct model (timeline