According to the Ansoff Matrix Dell has acquired the market development strategy to drive growth. Dell did hit the market of its competitors domestically and globally but their business strategy proposed a new distribution channel, new prices and also new product dimensions. Dell came up with the direct business model that eliminates distribution through retailers and wholesalers unlike their competitors like IBM, Compaq etc. This enabled customers to order online, through telephone or via Dell’s sales representatives.
This helped the company develop its customer relationship management process and also sell at a much more personal level thus incurring long term customer loyalty. Then the build to order strategy of allowing customers to customize their products and manufacturing only when an order is placed and not otherwise. This allowed Dell to cut down inventory holding costs and produce only when a customer places an order and then ship directly. This new business strategy places Dell under market development which is selling existing products to new markets and in new ways. Dell lets its competitors do the research and come up with a new design and then the company devises a strategy to sell the same design in a cheaper and better way thus snatching away the market share of its competitors as well. Dell has used market development to grow in the market and their strategy has been successfully since they have acquired majority of the market share and made the highest profits and all in an incredible pace.
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