• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Has the use of the Internet (www.dell.com) as a selling channel been successful for Dell and furthered their direct business model?

Extracts from this document...

Introduction

Has the use of the Internet (www.dell.com) as a selling channel been successful for Dell and furthered their direct business model? Dell are currently the worlds number one PC supplier, a position in the market they took from Compaq in April 2001. In short, the company's success story is mainly down to their innovative direct business model, which pays particular attention to the selling process where Dell completely bypasses all intermediaries and/or middlemen. This is because Michael Dell believed they add little if no value to the end product, instead just gaining a considerable mark-up for selling the product. Hence, they became the first PC manufacturer to completely cut out retailers and instead sold customised computers directly to customers based on their exact specifications. This selling process began over the telephone and via catalogues but in 1996 Dell embarked on Internet based selling on their official website, Dell.com, providing customers the opportunity to buy desktops, notebooks and servers directly from them. In order to power online commerce successfully for any business, the basic technology required is the installation of servers and data-storage systems. The website Dell.com runs on industry standard Dell PowerEdge servers. These powerful servers are backed up by Dell/EMC Fibre Channel storage. Dell is therefore equipped with backup strategies in case any problems with the servers or software occur and are experienced. ...read more.

Middle

As mentioned in the introduction, Dell's approach to the computer industry is to sell computers directly to consumers, without them having to be purchased through retailers. This can be seen from the 'Dell model' under this paragraph also known as their direct business model. The key management issue here is whether selling over the Internet remains in line with their direct selling policy (the Dell Model), which is an integral part of their business strategy, as it is the pathway they use to achieve company goals. The Internet is a direct channel and therefore ideal for Dell, as they do not wish to involve any intermediaries in the selling process. Furthermore the fact that they do not use retailers makes the implementation of e-commerce much easier and continues to give them complete control over their business actions. Another major issue management faced is one concerning any business selling over the Internet, this is relating to the consumer's confidence in buying products or services online. Security is particularly important for Dell because the price of purchasing PCs is higher than other popular Internet purchases such as CDs, books and clothes. In other words the general public view PC's as high-risk goods and will only consider purchasing them once they begin to trust the Internet, probably after several low risk purchases such as CDs and books. ...read more.

Conclusion

This has improved their stock control efficiency and also lowered invoice accounting costs. Hence, there are considerable cost savings, which are passed onto the customer in the form of cheaper prices. Customers clearly benefit from this and the website format fact where they can select exactly what they want within their budget. Furthermore e-commerce has given them the opportunity to satisfy the needs of new markets they were not previously dominant in. In particular the small and medium sized business market. This market now accounts for a high percentage of daily online sales and has consequently become an important part in their web-based strategy. Applying the Internet to the direct business model has given Dell an additional information edge in terms of better advertising performance and customer service. Each advertisement has a unique URL that allows Dell to know within 24 - 48 hours how effective they are. As mentioned, customer service has also improved from an already high standard even further. Dell has created many services online that enables the customer to see the whole purchasing process clearly once they have made an order. It gives the customer the ability to track the progress of their order as it is produced and delivered, providing them with constant feedback of delivery dates and product information. This 24-hour customer service and fast response time helps Dell build a strong relationship with customers. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Internet section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Internet essays

  1. Marked by a teacher

    ict online service

    The MP3 format is most popular, followed by Ogg Vorbis, Windows Media Audio, and RealAudio. E- radio is aimed at all type of generations as all type of generations listen to music as E-radio plays all types ofmusic from classical for the older genration to, pop for the middle aged people and rap for the younger generation.

  2. Case Study for Wingspanbank.com.

    Task #1: Increase the services and capacity in Bankone.com to make the "one-stop-shop?for financial service available in Bankone.com. Task duration: 2 months. Task description: The services available in Wingspanbank.com but not in Bankone.com should be added such as financial planning, CDs, mortgages, insurance, and more.

  1. In assessing the competitive position of a large online trader, we would use the ...

    Future Goals According to its name "Amazon" which means the world's largest river, Amazon's founder want to build a place where people can come to find and discover anything they might want to buy online. We think its future goal is quite suitable for Amazon because it is realistic and

  2. E-commerce Technology

    Wyke-Smith, Charles (2005, p.5) believes that "Cascading Style Sheet enable you to define how each marked-up element of your content is presented on the page. 2.4.2 Navigation One of the key features to layout and design a good website, developers will need to consider accessibility.

  1. What is e-commerce used for?

    This is a big constraint as many people do feel unsafe about giving their credit card number and therefore do not bother to buy any products. E-commerce allows customers to look at the businesses products from their home. This means that customers will be able to look or buy the

  2. Online dating services - review

    6.5 Significant Economies of Scale Finally, network goods display significant economies of scale. Particularly with new technologies or informational goods, the cost of producing the first product. The first personal digital assistant (pda) or the first copy of a book is significant, as the amount of labor going into the

  1. Design and create a website for a company of my choice. I have decided ...

    This order will be confirmed by return email and dispatched and charged as usual, at general prices. High Speed The website will need to be relatively quick to load up otherwise customers will be put off. Guestbook A personal account for each member who registers or orders with us is required for the customer database.

  2. Assess the e-commerce activities of clothing retailer Topshop.

    Strategically one can look at how Topshop what sources of value Topshop possess. The following model, retail vs e-tail tradeoffs (Roa, B, 1999) contains some of these source, which we will subsequently discuss: RETAILER ASSETS RETAILER LIABILITIES E-TAILER ASSETS E-TAILER LIABILITIES I think that Brand identity is particularity relevant to Topshop.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work