Dell’s decision to launch tablets via a joint venture with Baidu in China rather than in the US or Europe is only reported in passing in this article (Reuters.com) but it is fascinating when examined from the perspective of bargaining power. First of all it suggests a further subtle shift in the tipping of bargaining power from West to East. It would seem China can now potentially deliver greater scale than Europe or the US for a technology company like Dell. This is an important source of bargaining power. China can also deliver greater “network” bargaining power – literally; the giant Baidu search engine can deliver 294 million users – that’s 70% of China’s online users. China can also deliver “authority” power – trading success here counts for an increasing amount in the rest of the world.

The move is also interesting for what it says about Dell’s negotiating power. Some analysts are very cynical about the development and Dell’s weak market position – one is quoted as suggesting that it is just “grasping at straws to get any kind of publicity”. Yet companies can create “authority” in many different ways. One way is for a company to be prepared to recreate itself. This creates an air of unpredictability which wrong-foots opponents. In addition, carrying out a strategic course of action boldly and decisively rather than timidly helps develop your authority.

Dell has a reputation for steady reliability rather than flair, but launching products exclusively in China is an unusual and perhaps unexpected step, and tying up with the leading Chinese search engine is an innovative form of partnership. This kind of initiative gets noticed by commentators (as this article demonstrates). And whether or not this is a planned-for outcome, this kind of behaviour can build up negotiating authority, with the result that commentators may begin to look upon Dell differently going forward…