Dell’s business model needs to present a sustainable competitive advantage. Dell Computer has won the e-business battle for one sole reason: Dell was “playing alone because competitors are, at the moment, trapped with their traditional off-line channels and they can’t move because they would lose all their actual sales; they are trapped in what Lester Thurow defines “Hobbesian choice” (Sloan Management Review, 2001, Vol.42, No.2 pp.112).

Threats to Dell Computer

But, as customers are using the internet more and more, the competitors will be forced to stop using the traditional distribution channels and focus on selling online. This is where the problem will start for Dell. Once key competitors will play the same e-game like HP and IBM, Dell’s e-business operational advantages will be reduced drastically or worse, disappear. Those who differentiate themselves will be the only ones who can survive the intense competition.

Strategies to Remain Competitive

In order for Dell Computer to improve its product differentiation, it needs to do the following:

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