Based on journal entitled Dell Computer: using E- Commerce to support the virtual company. The type of e-commerce classification is Business-to-consumer (BBC). ICC is defined as E-commerce model in which businesses sell to individual shoppers. It was stated in Journal that Dell computer used value web to expand their product and at once satisfy their customer. 1. 2 Company Background Dell Computer was founded by Michael Dell in 1984. From the beginning, Dell operated as the direct sales model, taking orders over the phone and building PC’s to the customer’s specifications.
In the early asses, Dell entered the retail PC channel or several years but a downturn in business in 1993 led it to return to its roots as a direct vendor. Dell grew rapidly and in the mid-asses Dell had become the number one PC seller In the united States and numbers two In worldwide. 1. 3 Business Strategy Recently, Dell’s business has been built on a direct sales, build-to-order strategy for producing and selling PC’s. Dell has capitalized on the succeed advantages of its business model to grow rapidly and profitably.
The key advantage of direct sales and build-etc;-order production Is that expensive inventory does not build up in the Handel and lose value before It can be sold and new products can be Introduced without having to clear out old Inventory In the channel. 1. 4 Business Concept Dell concept through businesses formally they knows who their end user, what equipment it has bought from Dell, where it was shipped and how much the customer has spent with Dell. Dell uses that information to offer add-on products and services to coordinate maintenance and technical support.
That’s why Dell has become what It calls a “PC outsourcer by taking responsibility for managing part or all of a customers PC Inventory from purchase to disposition. Dell’s core PC business was organized along the lines of a traditional value chain. It’s divided into Indirect and direct PC value chain. Commonly, PC companies concentrated on building and selling PC or systems and relying on others to provide components, software and services then it sold directly to the end user through the distributor and reseller.
However, Dell expands its boundaries by replaced it from the simple value chain with a new model that we call the value web or the virtual corporation. Figure 1 : Value chain : Indirect and Direct value chain Indirect PC value chain Direct PC value chain: Dell’s hardware delivery system . 0 IMPROVEMENT SYSTEM : value web or Virtual company Through value web. Dell shown it’s powerful role in coordination and control of the information to its suppliers and business partners who provide the actual service.
Value web also lend an importance of an information technology, the Internet, and other electronic communications (e. G. , e-mail, DE’). It enables Dell to coordinate their web for close and distant relationships. Information flows back between Dell and the customer via the Internet, triggering orders, service calls and other communications to other parts of the value web. Based on figure 2 much of information flow are channeled through Dell. Figure 2 : Value Web: Dell’s virtual company Information flows Physical flows (products or service) 4. DEVELOPMENT OF E-COMMERCE Dell has enthusiastic convert to the Internet by creating web site in 1994 and moving many of its business activities to the Internet ahead of its competitors. Dell saw that direct model gave it an advantage in selling online. It can reduce conflict with resellers and distributors unlike indirect vendors such as Apple, MOM, HP and Compact. Manufacturing processes of built-to-order were already in place. In order to make it easy to offer customers the opportunity to configure products online.
Dell also used the Internet to link itself more tightly to its large customers through Premier Dell. Com. It’s used for configuration, ordering, services and support. It’s all customized to the customer’s systems and needs. Dell has executed “E-Works” strategy through a new information infrastructure sales force and through partnerships with service and software providers. Therefore, Dell saw an opportunity to capitalize on its growing reputation as an e-commerce innovator and redefine itself as a knowledgeable provider of e-commerce infrastructure to its customers.
Dell already began to offer online shopping for its PC’s. It’s mainly targeted for its catalog customers. Customers could select and configure a model and get a price quote then purchase the PC at that price online or by phone. After ordering, the customer received an e-mail confirmation, for progress order it could check through Dell’s order status system. Furthermore, Dell also tried to expand its e-commerce business in 2000 by setting up an online exchange in partnership with Arabia and others. It also has expanded its product line to meet the demands of the e-commerce market.
For instance, Dell built Dell. Com and directly quick to adopt Windows 2000 Dell has increased its R&D investments to enhance the capabilities of its server line. This extensive information consolidate Dell more closely with its customers and allows Dell to provide more better service to its customers. The core of Dell’s business model is to enrich customer relationship through the internet and e-commerce. Through this relationship, Dell can channel the capabilities of the value web to revive a wider range of services to its customers. 5. COORDINATING THE VALUE WEB 5. 1 Coordinating with service partners The Internet and information technology play an important role in coordinating business with all of its business partners especially to send and receive standard transaction information such as purchase orders, invoices and shipping schedules. Dell provides technical support to home and small business customers through phone and extensive web-based support. The relationships with service partners are coordinated by extranet, email and EDI links. . 5. 2 Selling e-commerce solutions
Dell is promoting itself as the company that “knows how ‘E’ works,” and is offering to share that knowledge with its customers. To do so, it is offering a variety of e- commerce hardware, software and services under the Dell ‘E’ Works program or value web (windowless. Com). The Dell E Works program includes hardware and software configurations tailored to e-commerce, it’s includes a variety of services to support e-commerce customers. These are delivered in conjunction with various software and services companies through a series of partnerships trained and ready to serve market.
Dell ‘E’ works success has been proved by an agreement with business-to- business software company like Arabia to develop an electronic marketplace for Dell’s small and medium-sized customers. In addition, alliances with Intel and Microsoft to promote the use of Intel-based hardware from Dell had made e-commerce commitments to the Internet infrastructure market. 5. 3 Online support Dell’s general model for international online support is “globalize then rationalize” which means to develop a global application and then localize it if necessary.