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Dell

 


             IBM, like Hewlett-Packard, offers a wider range of products and services compared to Dell or Gateway and is the #1 hardware company in the world. IBM is the #2 software company (Microsoft is #1). IBM offers computers via the Internet but their selection and upgrades are limited. IBM owns Lotus Notes and offers a vast array of other products and services.
             Bargaining power of suppliers: Dell uses Intel chips in their computer products, giving Intel some bargaining power over Dell. Microsoft's operating system is the standard however; Dell offers a variety of software packages, several NOS such as Novell Netware 5 and other tested OS such as Sunspot Solaris 2.5.1. Dell does not seem to favor one supplier over another; they offer several vendors' products. Dell has several well-established supplier/vendor relationships and intends to capitalize on these relationships through innovative uses of the Internet. Analysis: low/medium.
             Bargaining power of buyers: Dell sells to the individual consumer, the small office/home office (SOHO), the government, corporations worldwide, as well as to educational institutions. There are many well-established and highly reputable computer companies, which offer similar computer products as Dell giving buyers significant bargaining power. Price sensitivity is high and if Dell's computers are priced to high, the consumer will probably switch to another computer vendor. Analysis: High.
             Threat of substitutes: The computer industry is replete with numerous computer vendors. If Dell does not continue to be innovative propelling themselves forward, they will be overtaken by any one of the large computer companies, such as Gateway. The buyer's ability and willingness to substitute for a comparable computer is very high. Dell is attempting to reduce the number of direct substitutes through its; "Premier Pages." To date this new feature has not resulted in significant saving for Dell however the goal is to strengthen customer relationships and in turn raise customer retention.


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