How did Dell get started in this business?
What will be an ideal response?
Dell first started out by identifying a niche. It got into the business of upgrading IBM PCs, and in doing so was able to offer similar performance at a lower price. This appealed to customers who were not willing to pay higher prices for name brands like IBM and Compaq. These customers were the large corporations and government accounts that were relatively sophisticated and comfortable in the usage of the product. They did not need the hand-holding and other value-added services that were offered by IBM’s sales force/dealers and Compaq’s VARs. However, they did need product support and maintenance by the vendor. Dell was able to provide these customers with precisely what they wanted through the Dell Direct Model.
You might also like to view...
In an activity-based costing (ABC) system, what should be used to assign departmental manufacturing overhead costs to products produced in varying lot sizes?
A. Multiple cause-and-effect relationships. B. A product's ability to bear cost allocations. C. Relative net sales values of the products. D. A single cause-and-effect relationship.
The contribution per unit is
A. total revenue minus total cost. B. price minus total costs. C. price minus variable cost per unit. D. price minus total variable cost. E. break-even quantity divided by total fixed costs.
Indicate whether each of the following statements about stockholders' equity is true or false. ________ a) The balance in the treasury stock account increases total stockholders' equity.________ b) A company may acquire treasury stock in an effort to increase the market price of its stock.________ c) The declaration and distribution of a stock dividend reduces retained earnings.________ d) A 2-for-1 stock split probably will double the monetary value of each investor's holdings on the date the split takes effect.________ e) If treasury stock that had been acquired by a company for $50 per share is resold for $40 per share, total assets and stockholders' equity will decrease.
What will be an ideal response?
Rapida Inc. and Click Inc. are two companies that have been manufacturing typewriters for almost 30 years. Due to the reduced demand for typewriters today, both companies' average return on invested capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Rapida Inc. and Click Inc. most likely have
A. strategic alliance with each other. B. economies of scope instead of economies of scale. C. competitive parity with each other. D. competitive advantage over other firms in their industry.