Devoted to online marketing, viral marketing, and web marketing

Former computer superpower Dell (Dell) , is scrambling to come up with answers in its eroding PC business. They once had a huge lead over all competitors and have now come to the place where they are less than two percentage points ahead of Hewlett Packard (HPQ) in market share. Dell has 18.1 percent versus Hewlett Packard's 16.4 percent.

In response, Dell Chief Executive Officer Kevin Rollins is introducing two big changes. One is that they are going to start selling servers with chips from Intel nemesis Advanced Micro Devices (AMD) Inc.

Rollins has also said that he is committing $100 million on customer service, which will be devoted to expanding its already existing "TechConnect" service beyond U.S. customers only, to consumers and small-businesses all around the world.

Dell will now service many of the common PC problems through a broadband Internet connection versus the more costly personal visit, which should save the company a lot of time and money. Dell is searching for ways to increase its margins as they can no longer compete on price alone as it no longer sells lower than its competitors.

With Lenovo, one of their other big competitors saying that they are going to drop prices even more to gain more market share, analysts are saying that Dell is going to lose more market share in the PC business.
 
Dell has been cutting their own prices in response to the challenge of Hewlett Packard also, which has led to much weaker earnings of $762 million in comparison to $934 million the year before.

The lesson in all of this is that you need to watch out for your product or service becoming a commodity. Will the service side of things save it for Dell? Many don't think so. The thought is that they are offering only what consumers already expect, so it won't do much to add value to the company.

If you are only competing on price or technology, you could be in for trouble very soon. We must develop products and services that add real value to our customers or we will end up in the same situation.