Dell Computer Corp., the world's largest personal-computer maker, is keenly aware of everything its rival PC manaufacturers decide to go. Explain why Dell usually reacts more quickly and more substantially to pricing, product design, and advertising decisions made by Hewlett-Packard and Gateway than when these same types of decisions are made by Apple Computer.
Dell Computer Corp., being the world's largest personal-computer maker, is likely to closely monitor and react to pricing, product design, and advertising decisions made by its competitors. When comparing Dell's reactions to decisions made by Hewlett-Packard (HP) and Gateway versus Apple, there are a few reasons why Dell might react differently and more quickly in the former case.
1. Market Competition and Positioning: Dell, HP, and Gateway all operate in a similar space as PC manufacturers, targeting a broad range of customers. As direct competitors, their actions have a more direct impact on Dell's market share and profitability. Therefore, Dell is incentivized to closely monitor their decisions and respond swiftly to maintain its competitive edge.
On the other hand, Apple follows a different business model, focusing on premium products with a unique ecosystem. While Apple also sells personal computers, it differentiates itself by offering integrated hardware, software, and services. Dell recognizes that Apple operates in a different niche with a different customer base, and therefore, the impact of Apple's decisions on Dell's market share might be relatively limited.
2. Pricing Strategies: Pricing decisions play a crucial role in the highly competitive PC market. Dell competes primarily on its ability to offer attractive pricing while maintaining quality and profitability. Consequently, when HP or Gateway announce significant pricing changes, Dell needs to ensure it stays competitive by reacting quickly and adjusting its pricing accordingly. These pricing changes can directly affect Dell's market share and revenue.
On the other hand, Apple has historically positioned itself as a premium brand, focusing on quality and innovative products rather than aggressive pricing. Therefore, Dell's reaction to Apple's pricing decisions might be less significant as it targets a different customer segment, and the impact on Dell's market share would be relatively limited.
3. Product Design and Advertising: PCs are diverse in terms of form factors, features, and design. Both product design and advertising play essential roles in attracting customers in the PC market. When HP or Gateway introduce new product designs or advertising campaigns, Dell needs to react swiftly to maintain its competitive position, especially if these decisions resonate positively with customers.
Apple, on the other hand, has a distinct brand identity and a reputation for innovative product design. Apple's design decisions and advertising strategies are often unique to its ecosystem and customer base. While Dell might monitor Apple's decisions, the need to react as strongly or quickly might be lower, as Dell acknowledges the different target markets and consumer expectations of the two companies.
In summary, Dell is likely to react more quickly and substantially to pricing, product design, and advertising decisions made by HP and Gateway because they are direct competitors in the PC market, unlike Apple. Dell's focus on maintaining its market share and competitiveness in a highly dynamic market drives its active response to the actions of HP and Gateway.