Marketing Mistakes and Successes, 12th Edition

CHAPTER THREE

PC Wars: Hewlett-Packard vs. Dell

In 2012, PC makers Dell and Hewlett-Packard (H-P) saw consumer personal computer (PC) sales decline as mature markets, such as the United States and Europe, reached a saturation point and consumers decided to postpone PC repurchase in favor of new mobile and tablet devices. In response to declining consumer PC sales, Dell and H-P sought to position themselves as “one-stop-shops” of technology solutions for business customers. Both companies made acquisitions to complement their existing product lines and create solutions for all the technology needs of business customers, including servers, storage, networking, and services. As other tech companies began to expand their consumer and business offerings, former partners became direct competitors, creating an environment of hyper-competition in the tech industry.

Let's examine the history of H-P and Dell to see how they got where they are today.

HEWLETT-PACKARD

Background of the Company

Stanford University classmates Bill Hewlett and Dave Packard founded H-P in 1938. They invented their company's first product in a tiny Palo Alto, California garage. It was an audio oscillator, an electronic test instrument used by sound engineers. One of their first customers was Walt Disney Studios, which purchased the oscillators to develop and test an innovative sound system for the movie Fantasia. From 1938 to 1978, Bill and Dave built a company that became a model for thousands of subsequent Silicon ...