Professional Documents
Culture Documents
Dell Compaq
WTP
Cost
Dell’s Approach
Attractive segment:
Educated business consumers
Raise (or equalize) WTP:
Speed of delivery
Reliability
After sales service
Lower costs:
Direct channel
Build to order
Speed of delivery
Crown’s Approach
Attractive segment:
Hard to hold
International
Raise (or equalize) WTP
Sale engineers
Co-location
Rapid delivery (30 days inventory)
Lower costs:
Co-location
Owner-operator mentality
“Lean and mean” SGA
Complementary ways to view the creation of
competitive advantage
2004 BMW 330i getting 28 mpg vs 2004 BMW 330i getting 24 mpg
Anti-biotic that makes you nauseous vs. Anti-biotic with no side effects
Costs:
It costs nothing to supply each consumer
It costs $20 to set up shop
Strategy:
If you decide to set up shop, you get to choose a location on
the number line (1 through 63)
You must pick an integer (i.e., a counting number 1, 2, 3, … not 3.5)
Product Differentiation Experiment (3)
The game:
First person to raise a $20 bill pays me and gets to choose a
location
Your entry decision and choice of location is public information
Second person to raise hand pays me $20 and gets to choose
a location
etc.