Market Entry Strategies Case Study

Dell’s Entry into Gaming PC: The Decision Dilemma

OR

Abstract:
Dell, the world’s leader in PC industry, reaped the benefits of its unique business model of customization and direct sales. The company registered double digit growth in its two-and-half decades of existence. During 2004-05, the company failed to maintain its expected growth and the sales declined. The company faced challenges due to the saturation of the US consumer PC market, increasing competition and declining price of PCs. The company identified a niche market of gaming PC with prospective growth potential. There were very few and small players in the market of gaming PC. The company was in a decision dilemma whether to enter into the gaming PC market or not. If it enters, then what would be its branding and marketing strategy? The case discusses in details the about Dell’s inception, its growth and challenges. It also gives a detailed outlook about the US PC market. Then the case provides description of the gaming PC market with respect to players in the market and their positioning, consumer behaviour, recent trends and future prospect. The students can discuss whether Dell will enter into the gaming PC market or not and if the company enters, what will be its value proposition, branding strategy and marketing strategies?

Pedagogical Objectives:

• To discuss about the history and growth of Dell
• To discuss about Dell’s unique business model
• To discuss the major players in the gaming PC market
• To assess how Dell targeted the niche segment of the gaming PC industry
• To argue whether Dell would succeed in this new initiative.

Keywords : Dell; Personal computer (PC); Consumer PC segment; Gaming PC; US PC market; Repositioning; Market Entry Strategies Case Study; Direct sales model; Customisation; Product strategy; Pricing strategy; Promotional strategy; Branding; Value proposition; Cannibalisation; Target market

Contents : 
INTRODUCTION
DELL INC.: A BRIEF OVERVIEW
US PC MARKET: A BRIEF OVERVIEW
DELL PC: FACING CHALLENGES
REPOSITIONING: DECISION DILEMMA
DELL: PRODUCT PORTFOLIO
DELL: GEOGROPHIC SEGMENTWISE FINANCIALS