Dell Company
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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
Intel has competition from AMD
Medium
Microsoft has no real competitors for OS
Parts suppliers (monitors, chassis, etc) are fragmented
Medium
Buyers
Fragmented, not organized
Very low switching costs
Competitors
Ў°OtherЎ± has largest market share
Slowing growth, declining margins, little differentiation
Barriers to Entry
High entry costs in a low margin business
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 Ў°best 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: Ў°disdain inventory, always listen to the customer, and never sell indirectly.Ў±
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 Computers 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
Build-To-Order System: Providing customers exactly what they want in their computer systems through easy custom configuration and ordering.
Standards-Based Technology: key to providing the customers with relevant, high-value products and services.
Low-Cost