Which Company Is Competitively Stronger - Dell or Hewlett-Packard?

1.Which company is competitively stronger--Dell or Hewlett-Packard?

HP is still competitively stronger than Dell today in regards to overall sales. While Dell had been the industry leader in lean manufacturing approaches and cost-efficient build-to-order production methods in producing desktop PCs, it had fallen behind in producing laptop computers. The three elements in Dell's business strategy included: entering the white-box pc segment, advertising, and continuously reducing costs.

While these strategies have brought success to Dell, the Hewlett-Packard Company excelled in the printer market. Dell believed that HP was using its big margins on printer products to subsidize selling its PCs at prices comparable to Dell's, even though Dell had costs that were about eight percent lower than HPs. Since the computer technology industry is constantly changing, the market leaders shift all the time. Currently Acer Inc. is close to taking over HP's industry lead.

2.What actions and strategy changes would you recommend to Michael Dell to boost the company's performance and its prospects for overtaking HP in global sales of PCs?

Most of HP's global market share in PCs and servers came from having the world's biggest and most diverse network of distribution partners. The percentage of PCs and servers sold by its direct sales force and by its various channel partners varied by geographic region and country. The customer buying patterns and market conditions from these different regions made it useful for HP to tailor its sales, marketing, and distribution accordingly.

Dell would need to follow HP's lead in establishing a diverse network of distribution partners. The company would also need to invest in global market research, so it can become aware of the customer buying patterns in different regions around the world. Lastly, Dell should continue focusing on its aggressive moves to reduce costs. By doing this, Dell can appear more cost effective to consumers and maximize its profit margins.