E Commerce Methods Used By Dell Information Technology Essay

Affiliate marketing is a business model that can described as a strategy used by a company to advertise or post their company’s banner or logo on their affiliate marketing partner’s website so that the internet viewers can view and click it in order to link to the company website through their affiliate company’s website. (Turban et al., 2008) Dell has its affiliate partners as the online customers may direct link to Dell website easily by clicking the link from Dell’s affiliate partners’ websites. Dell is paying 2 to 4 percent on any qualified sale made from clicking on Dell’s link at the partners’ websites. Dell will creates and provides their own banners and logos to their affiliate partners and the partners are allowed to place the banner in anywhere of their website. E-bay.com is one of the affiliate partners of the Dell. (E-bay, 2008) By using this business model, Dell has higher chances to receive more customer’s attentions from different countries compare with other competitors that without using this business model.

Product and service customization is another business model used that makes Dell become a successful organization and that is why this business model called as Dell’s cornerstone business model. This business model allows the customers to customise their preferable product specifications. Besides that, if a customer found that the default specifications set by Dell has over the expectation price of the customer, the customer can change the specifications based on the price he/she can affords. The customers could lower down the price of certain product by choosing the lower specifications. For example, I have chosen a Dell laptop and after that I’m allowed to customize the colour, accessory, processor, operating system and the security software that I preferred this means that every specifications that chosen is depends on my preferable.

Supply Chain Improver

This business model is actually one of the most important business model used by Dell to maintain their success. It helps to improve supply chain management of Dell. Supply Chain Improver has been used by Dell for a long period of time. Dell recently has I2 Trade Matrix supply chain tool in their business in order to improve their supply chain process. This latest supply chain tool provides a global view of forecasted product demand and also the materials requirements. (Koncaba, n.d.) Furthermore, the factory scheduling and inventory management of Dell have been improved after implemented this supply chain tool in their business. Besides this, the suppliers of Dell has a global view of short and long term materials requirements in all of the Dell factories. The supply chain used by Dell ensures that the products are always available when there are any demands.

Direct Online Marketing

In order to compete with other competitors, Dell has introduced direct online marketing this business model in their business. This business model simply means that the manufacturer manufactures, advertise, and distributes their own products to the customers through the internet-based electronic store without having of any intermediaries and this eventually helps Dell to build relationship with their customers. (Turban et al., 2008) With this business model, Dell is granting a chance to expend rapidly. Now, the direct online marketing has become the major electronic commerce activity of Dell. Customers could easily purchase the products from Dell website and the products will be delivered to the customer’s house address in a short period of time. Individual users, small businesses, governments, educations and health-care organizations are the Dell’s major target customers.

Online Auction

Online auction is a business model that the Dell customers can participate in bidding for the product they prefer in the Dell website. (Dell Auction, 2010) The product bidding start with the lowest price and the participators can start bidding the competitive with the price of other participators. The particular product will be sold to the participator as the winner with the highest price bidding. With the Dell online auction, the customers could bid for many different kinds of Dell products. Online auction is an important sales channel for Dell because it renovates and publishes the Dell products at dellauction.com.

Question 2: Different types of E-Commerce Transaction used by Dell

Business-to-Business (B2B)

The first e-commerce transaction used by Dell is the Business-to-Business (B2B). B2B is an e-commerce transaction that conducted electronically between two businesses over the internet. (Turban et al., 2008) This e-commerce transaction falls into three groups and there are small businesses, medium businesses, and large businesses. The two participators in B2B are the buying and selling companies. For example, British Airways (BA) is one of the buying companies that purchase large amount of products from Dell every year. Dell provides Premier Dell service to its business customers in order to give those additional help when any problems occur. A Premier Dell member can browse, purchase, and track his/her order in the Dell website. Furthermore, authorized members of Premier Dell can select preconfigured PCs for their business departments.

Business-to-Consumer (B2C)

This E-commerce transaction is basically means retail transactions of products from business to individual shopper for their home or office use. (Turban et al., 2008) Due to the reason of World Wide Web expanding rapidly in year 1993, Dell promotes and sells their products from the website directly to their customers. Customers may order the products they want from Dell website and the products will be delivered to the customer after the payment is made.

E-Learning

E-learning e-commerce transaction delivers information for learning and education purpose through the internet. (Rayport and Jaworski, 2001) Dell offers educational programs to their customers in learndell.com. Dell provides the educational service of their products to the customers. Sometimes the technology used by Dell in their latest product might be confusing their customers the way of using it so that Dell needs to teach their customers the appropriate way of using those latest technologies. The site also helps customers to diagnosis and troubleshoots the PC technical problems.

Collaborative Commerce (C-commerce)

This E-commerce transaction means that when individual or group communicate or collaborate online such as business partners design a product or work together to deliver the products to the customers in different locations therefore they may be engaged in C-commerce. (Awad, 2004) FedEx is one of the business partners of Dell. FedEx helps Dell to deliver the product to individual or organization and this is why Dell needs this E-commerce transaction to communicate with FedEx in order to make sure every product is delivered without any mistake.

Intrabusiness EC

Intrabusiness EC is an E-commerce transaction that involves the activities of exchange of services, goods or information among individuals within an organization such as selling one of the organization’s products to the employee to online training. (Turban et al., 2008) This EC transaction usually runs over intranet. Dell cooperates with Accenture to make a new and high-performance supply chain planning solution.

Question 3: Analyse the competitive advantages Dell has over its brick-and-mortar competitors

A wider range of promoting, advertising, and selling products

Since the internet become so popular, the internet driving force makes thousand of million people are using internet nowadays. Dell can easily promote their new products through the internet in the fastest time. The advertisements can be spread to every country maybe just in few minutes. No matter where you are, you can just find the Dell’s advertisement of their new products by using a computer with an internet access and the customers also could purchase the product immediately from the website. If there is any latest information of the Dell Company has been updated, customers from all over the world can view it immediately from the Dell website as well.

The business is conducted 365 days a year and 24 hours per day Compare with other competitors that run their business through physical store only, Dell’s customers can purchase and order the products anytime even in the midnight because the E-commerce business will be conducting anytime and no restrictions involved such as business operating hours from 9am to 5pm or Monday to Friday only. (eSalesTrackBlog, 2010) The online business usually runs without closing except for maintenance services.

Used of data mining tools

Data mining tools bring another competitive advantage to Dell over its brick-and-mortar competitors as this tool is used to quick search for valuable information in the large database. Since the relevant data or information is difficult to look for in the large database, the data mining tool is needed to be used to search the information as fast as possible. Automated prediction of trends and behaviour and automated discovery of previous unknown patterns are the two capabilities of data mining tool. Dell has learnt the great deal about its customers by using this tool. Dell can get the latest trends information in order to produce something to make their customer satisfied. This tool can also improve the marketing of organization.

E-Customer service

With E-Customer service provided by Dell, the customers of Dell are able to receive help services from Dell in a short period of time. The phone based help desk of Dell is available for the customers all the time. Dell helps their customers to conduct self-diagnosis to check and troubleshoot that what is happening to the customer’s PC. (Dell, 2010) The phone call will then pass to technical support server if the problems occur on the customer’s PC is difficult to solve. The Dell’s customers have to follow the instructions from the technician so that they would diagnose the problem steps by steps and solve it in the proper way.

Customers could purchase and receive the product without visiting the shop

With the E-commerce business of Dell, the customers can view the e-catalogue of the products available and after that customer can purchase the Dell’s products from Dell website and the products will be delivered to the customer’s address after the payment is made. The customers can save their time and cost for travelling to the physical store to purchase it. The payment can be done through the internet as well.

Virtual scene of product customization

Customers could customize the products they need in the Dell website and it can be done in a just few minutes of time compare with doing it physically in the physical store. Customers might keep on changing the product specifications until it fulfil their satisfaction. Customers can see the total price immediately after the specifications have been changed.

Lower business expenses (E-commerce Optimization, 2008)

Dell sells most of their products through the internet which means Dell could save more expenses on opening more and more physical store in different locations or countries. This eventually lower downs a huge amount of expenses of Dell. Furthermore, a physical store requires hiring workers to serve their customers and this brings another cost issue to the company. The utility fees, store maintenance fee, enforce security fee, and the employee’s salary will be increasing the company expenses with running their business with physical stores.

Question 4: Relate this case to supply chain management improvements

The supply chain is actually a process of flowing of materials, money, information or services from raw materials go through the factory and warehouse and after that deliver to the end user. With the supply chain, company could be able to achieve their business goal smoothly. Dell has been using several types of supply chain and they are built-to-order, supplier integration, and intrabusiness EC. (Slide Share Inc, 2011) In my opinion, Dell could implements some other type of supply chain into their business process. Below are the several supply chain types recommendations:

Radio Frequency Identification (RFID)

Radio Frequency Identification is a system or technology used to communicate for exchanging the data between the reader and the electronic tag which attached on the object through wirelessly by using radio waves. (Association for Automatic Identification and Mobility, 2010) It is an automatic identification technology which has been created in this few years. In my opinion, Dell Company could implements this technology in their inventory store. This technology might be able to help Dell Company to improve the efficiency of inventory tracking and management. With this technology, every single product can be ready to sell whenever the customer order or buy it. Although this technology might be costly, it is actually a very good and worth technology for company supply chain improvement. Dell could use this technology in their manufacturing part as well. It can be used to track parts and use to reduce defects which might be caused during the manufacturing process. RFID helps to increase productivity and bring efficiency and effectively for managing to large amount of product. Furthermore, with the RFID in the company, Dell could be able to enforce the security as well. The product which has been attached with the tag will be able to scan by the reader and the alarm will be ringing if there is anyone stealing and bringing out the product from the inventory.

Build-to-order

Build-to-order is a system that used to design and build the specification of product that will be suit for individual’s needs and wants. (Next Day Network, 2011) It is actually similar with the product customization of Dell using now. This approach can be considered a good for highly configuration of product. Customers have many choices on several categories of product specifications and the company might need some times to assemble and test the specifications chosen by the customers. The advantage of Build-to-order approach is to supply and offer the customers with their preferable and exact product specification required. Besides that, this approach may help the company to finish goods in the inventory store and this eventually reduces the stock obsolescence risk and reduces the lost of the company because it helps to minimize the inventory costs.

Education of supply chain

Dell could educate all employees in all of the different departments within the company with the common knowledge of the supply chain. In order to achieve the goals of the company, Dell should educate the employees and understand the importance of supply chain in the company. Training and courses of supply chain improvement must be conducted and attended by all of the employees. Dell could hires those professionals from other country to the company for the supply chain conference in order to let the employees understand more about how does the supply chain works and progress to produce a efficiency and effectively productivity.

Supply chain partnership

In order to achieve the goals and competitive advantage in the market, Dell should partner with the partners which have the supply chain as well in their company and look for the partner which is ready to partner. (Tompkins Associates, 2011) With the partners that have already ready to fight together in the market, Dell could save their time and budget in their overall product manufacturing cost to deliver the product cost.

Supplier Relationship Management

Supplier Relationship Management is an approach that could be used by Dell to maintain the relationship with its suppliers. This approach is very important as Dell will be working with its suppliers together from time to time to ensure that the raw materials are always ready when it is insufficient in production. Dell could always have meeting with their suppliers to discuss any problems occur between them. Besides that, extranet could another way for Dell to communicate with its suppliers.(Dell Supply Chain Management, 2011) By using extranet, the communication between Dell and the suppliers could be reached in the fastest time. If there is anything misses out during the materials ordering, they can resolve it immediately with the extranet connection.