Dell Company

1- Introduction:

 Dell is the world leading computer systems company.

 The company develops, manufactures, sells, and supports personal computers, servers,

data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and certain other products.

 The use of E-commerce in each internal operation, B2B, and B2C to maximize its efficiency makes Dell Company be the most dynamic and reliable computer company in the world.

2- Background:

a) Industrial Background

Structural Element Source of power or weakness Relative Power

Suppliers Intel could integrate forward High

Intel has competition from AMD Medium

Microsoft has no real competitors for OS High

Parts suppliers (monitors, chassis, etc) are fragmented Medium

Buyers Fragmented, not organized Low

Very low switching costs High

Competitors ÐŽoOtherÐŽ± has largest market share High

Slowing growth, declining margins, little differentiation High

Barriers to Entry High entry costs in a low margin business Low

Threat of Substitutes Handheld devices currently in early phase Low, but growing

(Source: Relative power in the personal computer manufacturing industry)

b) Company Background

 Dell Computer was founded by Michael Dell in 1984, It was founded by only

$1000. The startup aimed to sell IBM-compatible computers built from stock components, and then they began to sell its own brand of PCs in 1985.

 From the beginning, Dell operated on the direct sales model, taking orders over

the phone, and building PCs to the customersЎЇ specifications.

 In 1989, Dell set up its first on-site-service programs in order to compensate for the lack of local retailers prepared to act as service centers.

 In 1996, Dell began selling computers via its web site.

 Now, each of the regions has its own regional headquarters, its own manufacturing facilities, assembly plants, supply network, and its own IT infrastructure.

 The companyЎЇs strategic intend is to ÐŽobest understand customersЎЇ needs and provide the most effective computing solutions to meet those needs.

 The objectives of Dell Computer Corporation were keeping costs down by eliminating unnecessary interference of intermediaries and expanding internally

 DellЎЇs enterprise culture is represented in the three golden rules at Dell: ÐŽodisdain inventory, always listen to the customer, and never sell indirectly.ÐŽ±

3- Motivation of EC adoption for Dell (Why):

1. Small amount of assets from starting

2. Lack of brand image in PC market

3. Less competitiveness with just low price

4. Lack of customersЎЇ reliability

ўЎ Aggressive E-Commerce adoption

4- Strategies for Dell (How):

a) DellЎЇs E-Commerce Strategies

 Dell Computer's strategy was built around a number of core elements: build-to-order manufacturing, mass customization, partnerships with suppliers, just-in-time components inventories, direct sales, market segmentation, customer service, and extensive data and information sharing with both supply partners and customers.

b) Direct Model

1. Build-To-Order System: Providing customers exactly what they want in their computer systems through easy custom configuration and ordering.

2. Standards-Based Technology: key to providing the customers with relevant, high-value products and services.

3. Low-Cost Leader: Focusing resources on what matters to the customers.

4. Single Point of Accountability: Technology can be complex, so keeping things easy for the customers.

5. Most Efficient Path to the Customer: The most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost.

c) E-Commerce Applications

 Differentiation

 Use Customer Relationship Management tools to enhance the customer experience.

 Use e-Learning tools for customer education.

 Use electronic security features to increase customer trust and loyalty.

 Provide personalized information for users, allowing a customer to track the status of his/her order as it goes through the manufacturing line.

 Maintain and provide personalized information for users.

 Use virtual communities to increase customer loyalty and trust.

 Operational Effectiveness

 Use e-Learning tools to train customers in the use of its products.

 Use extranets and digital marketplaces to increase its power relative to suppliers.

 Use internal knowledge management.

 Leverage the existing Internet infrastructure to expand globally.

 Track customer behavior, using data mining to uncover root cause of support calls.

5- Outcomes