HowDell uses e-commerce in developing a strategic advantage to improveits efficiency or market share and create increased profits.
Executive summary 3
1. Overview and current status of Dell Computer Corporation 5
1.1 Overview of Dell Inc.: 5
1.2 Historical Background of Dell Inc.: 5
1.3 Current Status of Dell Inc.: 6
2. Characteristics of Dell Computer Corporation 7
2.1 Goals, objectives, and mission of Dell Inc.: 7
2.2 Organizational structure of Dell Inc.: 8
3. Strategies of Dell: 9
4. Company strengths, weaknesses, opportunities, and threats: 10
5. Analysis of Dell’s telecommunications 12
7. Conclusions 13
Exhibits or Appendices: 15
E-Commerceis popularly known as electronic commerce. It is the latest form oftrading in goods and services using the internet. can becalled the online trade of goods. nowadays has become apopular form of trading to the companies and to the customers. Itreduces the time for shopping of the customers as well it cuts theadditional cost of the companies for selling a product in the stores.If a company totally depends on the e-commerce, it does not have topay the cost for showroom rent yet, the company can save a largeamount of money. With the increased development of, and the use ofinternet in business activities, the more business has adopted themove to increase their sales.
DellComputer Corporation is one of the biggest computer-manufacturingcompanies globally. Almost in every country, Dell has its businessoperation. It is a well-established multinational company at thismoment. As a result, it has received an international recondition.However, there are many other similar companies to Dell also havetheir global operation. For example, HP, Lenovo, Apple, Samsung,jujitsu, Acer, Asus, Toshiba, etc. are some of the closestcompetitors of Dell Computer Corporation. Due to its enormous historyin the computer business, the company has been on the forefront inadopted all measures to make it remain the top in the industry.
Thisreport is directed towards exploring the approaches how Dell Companyuses in developing a strategic advantage to improve itsefficiency or market share and create increased profits in the worldcomputer market. This report also discusses the impacts of e-commerceon the business activities of Dell Corporation along with thetechniques utilized by Dell to solve real world business problem andincrease the sale by using . The paper will also look intothe company’s SWOT analysis and use of tables in support of thecompany’s performance globally.
,the short form of Electronic commerce is a process of selling andpurchasing of products via computer networks, such as the internet.In the developed country, e-commerce has become very popular recently(Cohan, 2000).Electronic commerce or E-Commerce requires some technologies such asmobile commerce, supply chain and contract management, electronicmoney transfer, Internet marketing, electronic data interchange whichis also known as EDI, online transaction, automated data collectionsystems from the internet and inventory management systems (EMS).Modern is basically accomplished by using the WWW, whichis the short form of World Wide Web and e-mail.
Typically,e-commerce provides a virtual storefront on the websites by creatingan online catalogue. It sometimes creates a virtual mall for theproducts. Besides, it creates an online marketplace for buying andselling on websites. collects demographicdata through social media and web contract (Goldstein and O`Connor,2002). Moreover, e-commerce is used for business to business (b2b)selling and buying that provides a secure business transactions.Above all, e-commerce, in most of the cases, reaches the prospectivecustomers by fax or email.
TheDell Computer Corporation is famous for the innovations in the supplychain management(SCM) and electroniccommerce().Basically, e-commerce is used for the direct sales model of thiscompany and its "configure to order" or "build-to-order"approach to the production or manufacturing for the purpose ofdelivering individual computers’ in accordance to the customers’specification (Gates and Hemingway, 1999).
TheDell Computer Company was started or founded in the year 1984, and itdeals with computer technology. The company develops repairs, sellsand gives support in products such as computer hardware, software forcomputers, IT services and also being an IT consultant expert. Sinceits formation, the company has gained its recognition in the computerindustry between the years 1990 to 2000. This tremendous growth inthis period was partly accelerated by the formation of the company’swebsite, which made it be recognized internationally. Additionally,the company increased its products from the computers and laptops toselling internet services, servers and the related wares. In 1999,DellCompany surpassed one of its main rivals in the industry ‘Compaq’to develop into the largest PC maker.
Overview and Current Status of Dell Computer Corporation
Overview of Dell Inc.:
DellComputer Corporation, Dell Inc., is a private computer technologycompany in America. It is a multinational company mainly based onRoundRock at the Texasstate in the UnitedStatesof America. This company usually manufactures, sales, develops,supports and repairs computers and the computer accessories alongwith some other related products to the computer. It is one of themajor hi-tech company having more than 102,800 (2013) employeesworldwide.
1.2Historical Background of Dell Inc.:
MichaelDell is the founder of this giant computer technology company whoestablished this company in 1984 while he was a University of Texasstudent. Likewise, some other famous entrepreneurs such as Bill Gatesand Steve Jobs, Michael Dell were also a school dropped out student.Primarily, the name of this company was PC’s limited.
Figure:Revenue History of Dell Inc. (Dell Corporation, 2014)
Dellfirst produced the computer in 1985 while the owner got $1000 as thecapital from his family. That computer was totally a reflection ofhis own design which sold for $795 each. Later. The companyadvertised its products in magazines for the purpose of selling thatdirectly to the customers. They achieved this through customassembling each customer’s order according to an assortment ofoptions. During that year, Dell Corporation made $73 million grossprofit from the beginning year of its business operation.
1.3Current Status of Dell Inc.:
In2014, Dell Inc. was listed top 51 no. Company in the world by Fortune500. In the year 2013, Dell Corporation was the third computer sellerglobally behind the establishments such as HP and Lenovo. It made$56.94 billion revenue in 2013. Currently, Dell is the top seller ofcomputer monitor worldwide. In addition, Dell Corporation is the 6thlargest company in the Texas with its revenue.
Figure:Worldwide Sale in Q-2, 2014 (Dell Corporation, 2014)
Characteristics of Dell Computer Corporation
DellInc. is purely a computer manufacturing company with some subcomputer products and tablet computers and notebooks. Sub computerproducts and serves those products and services, which are necessaryto use computers such as networking equipment, mouse, keyboards,pen-drive,Computer software, IT consulting, IT servicesand Smartphone’s. It produces desktop computer, tablet, laptop, andnotebook separately. Another important characteristic is that Dellsales all the necessary parts of a desktop computer separately. As aresult, the customers can buy a monitor, Hard-disk, motherboard, PCcasing, power supply, DVD-Rom, CD-Rom, etc. separately from thestore. The company also sells complete PC’s alongside selling ofvarious parts of the PC in the retailing market.
2.1Goals, objectives, and mission of Dell Inc.:
Thegoal of Dell Inc. is to make a large amount of profit and to providemulti-featured and powerful computers to the people all over theworld which the people can comfortably and easily use without anytechnical and mechanical support. The objective of this company is toplease all the customers worldwide with its great desktop computers,laptop, notebooks, tablet computer and even projectors that areequipped with the required latest software.
“Themission’ ofDell Inc.is to be established as the most flourishing company globally in thecomputer industry by providing the finest consumer practice in theglobal markets. To do so, the company will meet the customers withdelivering:
highest quality products
low and competitive pricing
ensuring accountability both individual and company
providing best customer’s service and support
flexible and high quality customization capability and
highest corporate citizenship
2.2Organizational structure of Dell Inc.:
Theorganizational structure of Dell Inc. is functional anddecentralized. The company has several departments and functionalareas for giving encourage and support to develop the company. Thehierarchical structure of this company represents various functionalcomponents which include including Business development, educationservice, and Global operation.
Figure:Organizational structure of Dell Inc (DellCorporation, 2014)
Usually,a decentralized organizational structure is more flexible and thelearning opportunity is high for the employees. In this structure,decision comes from different departments and various levels,whereas, in a centralized system the CEO is the only one who makesthe decision. The company has the democratic leadership strategy sothat all the department head can participate in the decision makingprocess with the CEO.
Atthis moment, more than 108,800 people work in Dell Corporation andMichael Dell is the CEO. In 2013, Dell made approximate revenue of$56.94 billion and became the top seller of computer monitorworldwide. Dell always uses the latest technology of its products. Itis the matter of surprise that Dell has a group of 4,000 highlyexpert engineers for research and development and the company spendsalmost $600m every year on its R&D (research and Development)(Dell Inc. Company profile, 2005). Therefore, it is clear that Dellalways tries to provide sophisticated technology to the customers.
Strategies of Dell:
DellInc. usually uses the direct sales strategy. It does not rely on theintermediaries, such as wholesalers, retailers, etc. Dell Inc.directly markers its product via its website which ishttp://www.dell.com.As a result, the direct sales model provides the company someadvantages. Those are discussed as follows:
The company can save a huge amount because intermediaries cannot take the money from the mark-up.
As the company does not have any retail store, it does not have to pay the store rent.
Dell can maintain the customer relationship and make customer database which provides prompt feedback from the customers and helps to shape its product offerings.
irect (Dell) and Indirect (Compaq) Sales Model
Strategically, going both direct and indirect sales is difficult.
Dell went from$890M in 191 to $2B in 1992 via retail outlets
Figure:Comparison of Direct and Indirect sale strategy of DellInc.and Compaq(DellCorporation, 2014)
DellInc. uses direct sales strategy which helps the company achievecompetitive advantage in the market. To maintain the chain of thecompany retail stores is more difficult than online productillustration. Besides, is now becoming very popular to thecustomers. Yet, in the future, the company will be highly benefitedfrom this strategy.
Redefinitionof business model: Dell Company as an Company
TheDell Company became one of the early companies to be enthusiastic inconverting to the internet among the computer producing companies. Itcreated its first web site in the year 1994, after which the companymoved numerous of its business activities such as selling, contactingthe customers as well as widening its customer base to the internetahead of its competitors. One of the major gains from this approachis that, the company gained an advantage in selling online. This wasthe direct approach in selling compared to the indirect move that wasstill practiced by their key competitors in the industry such as thelikes of Apple, IBM, HP and Compaq. In addition, Dell didn’t haveto be concerned about channel conflict with its product distributorsand resellers when it commenced the online selling approach.
Inaddition to the already established company’s ‘build-to-ordermechanized methods’ the company made it easy to reach and offer totheir customers the chance to organize products online just as it wasthe case when they were using the telephone as the main connectingtool between them and their customer base. This tremendous gain bothin the company’s performance and sales gains made the company hitthe $50 million a day in 2000. This was mainly contributed largely bythe ‘web-enabled sales’. In addition to making increased salesthrough the use of the internet, the company also used the Internetto connect itself to its large customer bases all over the globe.This was achieved through the development of extranets which wereknown as ‘Premier Pages’ but currently they are known as ‘PremierDell.com’. This increased their customer bases as well as orderingpoints not forgetting stations to attend to its customer’s issues(customer service).
Company strengths, weaknesses, opportunities, and threats:
Companystrength, weaknesses, opportunities, and threats (SWOT) analysis arethe compulsory to understand the existing status of the company. Inevery year, Dell Inc. conducts a Swot analysis. SWOT analysis helpDell Inc. to determine its strongest and weakest point, so that thecompany can take decision how to address the fault and fix theproblematic areas.
SOWTanalysis of dell Inc. in 2013
Dell achieved a massive brand value worth $7.5 billion hence being known as one of the giants in the industry.
Product customization is outstanding
Environmental record is good enough
Dell achieves the competency in the mergers and the acquisitions
The biggest strength of Dell is the direct selling business model
Computer hardware products are unable to meet the expectation.
Dell has a poor customer service
Dell expenses a small amount in R&D
Dell has a weak patent portfolio
Dell has a small no. of retail stores
Dell has a low differentiation
Dell recently introduced services and enterprise solutions businesses
Dell usually obtains most of its patents through the acquisitions.
Strong participation in the emerging markets
Tablet computer market growth is a great opportunity for Dell Inc.
Huge demand of Smartphone’s is the major challenge of Dell.
Hardware products are causing declines the profit.
Dell has a slow growth in the laptop market.
Dell has to face a massive competition
Analysis of Dell’s telecommunications
DellInc. provides support to the telecommunication industry bytransforming with the industry partnership in the functionvisualization of network, customer success, and new data offering.The company made collaboration with the company name Red Hat tojointly engineer for Network Functions Virtualization (NFV), which isan OpenStack-based Network. Besides, the company also introducedSoftware-Defined Networking (SDN) solutions mainly for thetelecommunications industry and merged with the company named CalsoftLabs for providing NFV and SDN solutions to the telecom operators allover the globe. Dell Inc. also takes the leadership function in theCloudNFV consortium for the purpose of demonstrating and implementingan open, cloud-based NFV model. Recently, the company has declared anew storage solution and server customized for the always on theworld. The OEM solution of Dell Inc. enables the customers oftelecommunication Aculab for bringing the services and solutions tomarket swiftly.
DellInc. could realize the fact that the technology is changing radicallynowadays and the telecommunication industry is facing a tremendouschallenge of technology. It also could understand the necessity forintegrating a multiple proprietary hardware appliances and pooroperational flexibility along with the agility of service quality.Dell Inc. strongly believes that NetworkFunctions Virtualization canbring a solution regarding those issues and it will able to transformthe telecommunications industry by the utilization of a disaggregatedand open cloud-based and data-driven approach. Yet, Dell Corporationhas become the foundation member of CloudNFV which is a consortiumfor the purpose of developing, testing and implementing a cloud-basedNetworkFunctions Virtualization model.Dell Inc. conducted a research and the company is now leading thegroups of CloudNFV, specifically Dell Research, is leading the toprovide the customers with their choice and the consistency across amultiple technologies. Moreover, Dell Networking is shipping theproduct which is made of SDN-enabled networking, fabric products tothe enterprises which will help form a solid basis for NetworkFunctions Virtualizationsolutions.
DellInc. should establish a strong telecommunication network by which thecompany can connect the whole world. Alike, Intel, which has asimilar strong network system. Intel can identify anything withoutinternet connection that any people doing anything to their computer,which is an Intel chip, enabled. Another proper example is blackberrydevice. It is blackberry device which anybody can use internet thoughthe internet connection is made shutdown in any country. Thissituation happened in Libya a year back. It is because blackberryhas their own strong network. However, Dell Inc. should establishsuch a strong network. In reference to this, the business entity ofDell will be able to dominate the computer and telecommunicationindustry. However, it is not possible overnight. It will take timeand a huge cost, bust Dell should make such a plan very soon.Otherwise, the competitors will the chance and dominate the market innear future.
DellInc. is quite successful in the computer manufacturing industry. Veryfew companies are as successful as Dell in the computer manufacturingindustry apart HP and Lenovo. Therefore, there is nothing to provethe specialty of Dell. Yet, the company should make a plan, whichwill cover something very big that will help the company dominate thecomputer and telecommunication industry in the end. However, DellInc. is on its way to do that, it needs some more specific plans. Ifthe company can establish this plan, it can largely maximize theprofit and market shares very soon. Additionally, dell Inc. will geta huge competitive advantage because other computer manufacturingcompanies did not come to join telecommunication industry so far.
Fromthe information provided in the paper, it is clear that, the adoptionof the aspect by the Dell Inc has been to the benefit ofthe company. The company has managed to adopt the aspect of effectively to improve its performance as well as itsglobal recognition ahead of its competitors. This has been also beencontributed by the ability of the company to avoid traps.This due to the fact that it has adopted the tool and integrated itwith a marketing channel that is customer focused, i.e. A channelbased on customer needs and its affiliated benefits.
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Course Project Topic Discussion forum
Identification of the selected topic
Identify research question
Website of Dell Inc.
to improve market share and profit