Yesterday’s post is still on my mind, unwieldy because I was overwhelmed by too many ideas and concepts. For clarity, I’m going to just look again at Dell and Alienware. Rant over, now one can evaluate their corporate strategy and investment in design.
I’ve had a weakness for brands colliding, and this acquisition is irresistable – snippets from various news media reiterate over and over how Alienware will only benefit from Dell’s supply chain efficiencies, and not allow their design strategies to be affected.
But Dell’s efficiency will not hurt Alienware’s product development
process, Gonzalez said. "We’re not going to sacrifice the design of a
product for the sake of the efficiency," he said.
Similarly, others are hopeful that Dell will benefit, if only by association, from Alienware’s reputation for cool design and hip branding – figures of speech that are being used consistently across the reports. What’s interesting however are the speculations that this acquisition has it’s roots in Apple’s meteoric rise in recent years, demonstrably due to their commitment to design and ‘hip’ branding. Apple’s market cap, according to this post, is now greater than Dell’s, though one company is much much smaller than the other based on other metrics. Arik Hesseldahl goes on to say,
Dell’s all about large contracts and low-cost commodity PCs, and much
less about rocking the boat with innovation and unconventional
industrial design, which is Apple’s forte. Dell is who you call when
you need a quick-and-dirty Windows machine; Apple is who you call when
you want a higher-quality, premium computing experience that costs more
but at least for my money is more stable and vastly more satisfying.
And of course Apple has a secret weapon in the iPod.
Apple’s description, in this January 14th 2006 post, sounds incredibly similar to the analyst’s evaluation of Alienware – rocking the boat with innovation and unconvential industrial design. After all, is there another computer in the market with glowing green alien eyes? At the same time, this acquisition has been incomprehensible to many, due to the glaring dissimilarities between Dell and Alienware,
"I still think it’s a bad idea, and a bad fit," said Stephen Baker, an
analyst with NPD Techworld. Alienware’s customers buy from that company
in part because of its image as a technology-driven company that
understands the needs of gamers, while Dell is viewed by those
customers as a stodgy corporate supplier.
On the other hand, it’s taken for granted now that commodification and price leadership are limited strategies for topline growth, that customization and emotional appeal through design, all allow for higher margins and brand equity. This acquisition, imho, is a clear signal, that the role of design as a strategic force for increasing shareholder value has penetrated the reaches of the most corporate of players, viz.,
Rebecca Runkle of Morgan Stanley said the Alienware deal was evidence that Dell was making "the right investments".
design and hip branding are two important factors in the high-end
consumer and gaming PC segments and, quite frankly, Dell lacks in both
these areas," she said.
Design is an element of operational
effectiveness, in which context, this seemingly incongruous purchase
makes sense, Dell’s reputation as a leader in operational effectiveness is unquestioned. And my personal suspicion is that Dell’s strategy is at once,
extremely focused and extremely broad – to be the number one computer
company in the world. This is going to be very interesting from the business and design perspective.