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Case Title:

Dell vs Lenovo: The Competitive Strategies in China

Publication Month and Year :  July 2009

Authors: Amjad Khan, Saradhi Kumar Gonela

Industry:  Information Technology

Region: China

Case Code:  MM0016

Teaching Note:  Available

Structured Assignment:  Available


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Abstract:
Dell entered China, the world’s fastest growing PC market, in 1998. Though it was a late entrant, Dell initially did well through its direct selling business model that primarily targeted the industrial and public service departments. But this model left out the Chinese consumer’s desire to touch the product before buying it. Even the actual growth zones, the third and fourth tier cities, were overlooked. But the same Chinese turf was tamed by a domestic brand, Lenovo. Its relationship and transactional business model – coupled with a highly efficient supply chain network – helped Lenovo corner 35% of market share, dipping Dell’s further. So should Dell alter its business model is just one of the many questions discussed in this case.

Pedagogical Objective:

  • To discuss critical success factors in the Chinese PC market
  • To understand and contrast the business models of Dell and Lenovo
  • To analyse the reasons behind Dell’s declining profits and falling market share in China
  • To discuss Dell’s choices to gain a market foothold in China.

Keywords : Buyer behavior; Factors affecting consumer behavior; Chinese PC Industry; Business Models; Direct Selling Business Model; Dell’s Business Model, Dell, Relationship and Transaction Business Model; Chinese Consumer Behavior; Developing a Business Strategy for China; Critical Success Factors in Chinese PC industry; Second Mover Disadvantage, ,Marketing Management; Marketing Mix; Market Segmentation; Product Life Cycle; New Product Development; Consumer Behavior; Marketing Case Studies; MBA; Marketing Course for MBA Marketing Course Case Map; Course Case Map; Case Map

Contents:

  • Chinese PC Industry – A Brief Overview
  • Dell vs Lenovo in China

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