(Dell Computer : Using E-commerce to support the virtual company)

Topics: Customer service, Personal computer, Sales Pages: 6 (1663 words) Published: April 15, 2014
1.0 INTRODUCTION
1.1 Project Description
The Internet has given Dell to grow revenues without suddenly increasing customer service costs. Dell has linked electronically by the Internet to network as a “virtual company” or value web in order to capitalizing its reputation as an e-commerce pacemaker. Dell’s alteration of using the virtual company approaches is to expand its business scope without making a major acquisition. Therefore, Dell are aimed that e-commerce efforts can improves their efficiency, enhance customer satisfaction and reaching new product markets. Based on journal entitled Dell Computer: Using E-Commerce to support the virtual company. The type of e-commerce classification is Business–to-Consumer (B2C). B2C is defined as E-commerce model in which businesses sell to individual shoppers. It was stated in jurnal that Dell computer used value web to expand their product and at once satisfy their customer. 1.2Company 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 PCs to the customer’s specifications. In the early 1990s, Dell entered the retail PC channel for 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-1990s 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 PCs. Dell has capitalized on the succeed advantages of its business model to grow rapidly and profitably. The key advantage of direct sales and build-to-order production is that expensive inventory does not build up in the channel 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 customer’s PC inventory from purchase to disposition.

2.0 TRADITIONAL SYSTEM : PC value chain

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 chainDirect PC value chain: Dell’s hardware delivery system

3.0IMPROVEMENT SYSTEM : Value Web or “Virtual company”

Through value web. Dell shown it’s powerful role in coordination and control of the value network. Dell provides all customer wants and needs then relays the necessary 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, EDI). 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...

References: Kraemer, L., & Dedrick, L., (2001). Dell computer: Using E-commerce to support the virtual company. University of California, Irvine
Johnston, R., & Clark, G., (2005). Service Operations Management. Prentice Hall
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