Dell Computer Corp, the world's largest personal-computer maker, is keenly aware of everything its rival PC manufacturers decide to do. Explain why dell usually reacts more quickly and more substantially to pricing, product design and advertising decisions made by Hewlette packard and Gateway than when these same types of decisions are made by Apple Computer.
Dell, HP, and Gateway largely build PCs which run on Microsoft, while Apple has its own operating system. So, HP and Gateway PCs are much closer substitutes for Dell PCs
Dell Computer Corp, as the largest personal-computer maker, competes directly with Hewlett Packard (HP), Gateway, and Apple Computer in the PC market. While Dell pays attention to the decisions made by all these rivals, it is often observed that Dell reacts more quickly and significantly to pricing, product design, and advertising decisions made by HP and Gateway compared to Apple. There are a few reasons why this might be the case.
1. Market share and competition: Dell, HP, and Gateway are all direct competitors in the PC market and have a similar customer base. As a result, Dell closely monitors the actions of its direct competitors, especially when it comes to pricing, product design, and advertising decisions. Dell's primary goal is to gain an advantage over its competitors and capture a larger market share. Therefore, any strategic moves made by HP and Gateway can directly impact Dell's market position, prompting them to respond swiftly and substantially.
2. Similar business models: Dell, HP, and Gateway follow a more traditional business model of producing and selling personal computers. They focus on volume and efficiency in manufacturing and distribution. Their revenue largely depends on PC sales. On the other hand, Apple's business model is different. Apple is more focused on innovation and creating a distinct user experience through its hardware, software, and ecosystem. Their product line includes not only personal computers but also smartphones, tablets, and other consumer electronics. Due to these divergent business models, Apple's decisions may not always have a direct or immediate impact on Dell's core PC business. Hence, Dell may not react as quickly or substantially to Apple's pricing, product design, and advertising decisions.
3. Different target customers: Dell's target customers primarily include individual consumers, businesses, and institutions. HP and Gateway have similar target markets, with a focus on consumers, businesses, and enterprise clients. In contrast, Apple often targets a more niche audience with a strong emphasis on design, innovation, and premium pricing. Dell's response to market changes and decisions by HP and Gateway is influenced by its desire to stay competitive in the large consumer and business markets. As Apple's products and target customers differ significantly, Dell may not perceive their decisions as having the same direct impact on its market position.
It is important to note that while Dell may not react as quickly or substantially to Apple's decisions, this does not mean they are completely unaware of Apple's actions. Dell continuously evaluates the overall market landscape, including competitors in different segments, to inform their own strategies.