BUSINESS STRATEGY

What kinds of e-commerce are used? 

Dell uses business-to-consumer e-commerce and business-to-business e-commerce. But primarily uses business-to-consumer e-commerce, which means they sell their products and services to customers who are primarily individuals. Customers are hoping to purchase computers directly interact with Dell. But on the other hand, Dell sells their products and services to customers who are primarily into business. So Dell also uses business-to-business e-commerce.

What kinds of Internet business models are used? 

Dell uses two different kinds of Internet business models; built to order and direct sales. Built to order help Dell to save money, time and inventory. Dell makes its computers according to customer’s order. None of them are made from inventory. For example if a customer wants a custom models or any special style, Dell creates the product according to the customer’s needs and order.

A direct sale means Dell sales its products directly to the customers. Because Dell believes that selling products directly to customers without retailers or dealers would be the best.

What payments systems are used? 

Payment system means ensuring payment security, transaction privacy, customer authentication, and the purchaser’s promise to pay. Dell offers a variety of payment methods to pay for Dell products. Dell accepts PayPal and also accept of paying month to month.

What type of marketing mix does it adopt? 

Dell uses business to consumer e-commerce. In business to consumer e-commerce, marketing mix include registering with search engines, online ads, viral marketing and affiliate programs. Some web search engines guarantee you that your site name will appear at the top. Online ads are small advertisements which appear on other websites. Viral marketing encourages users of a product supplied by business to consumer e-commerce business to encourage friends to join as well. And lastly affiliate program is an arrangement between two different e-commerce websites that directs viewers from one site to the other.

INTRODUCTION

HISTORY OF DELL

You don't ever really know whether you have come up with the right plan until much later...When it either works or it doesn't. What is the right plan? It is the one that helps you identify what you need to to ensure success. It is the one that rallies your employees around a few common goal and motivates them to achieve them. It is the one that involves your customers' goals and your suppliers' goals and bring them altogether in a unified focus. 

-Michael DELL

Dell Computer Company was founded by Michael Dell in 1984 and now it is one of the leader in the personal computer industry through aggressive risk taking and cost lowering strategies. Michael Dell, the founder of Dell Computer, began his venture in 1980. Michael Dell's first computer purchased was Apple II. A year after, in 1981, IBM introduced the personal computer (PC). Michael Dell, saw this new product as a business option and he switched from Apple to IBM PC and began to learn all components. 

In 1983, Michael Dell, 18 years old college student at University of Texas, spent his evening pre-formatting hard disks for IBM compatible PC upgrades. In 1984, Michael Dell started a new computer company with $1000. Michael Dell's mission was to be the most successful computer company at delivering the best customer experience in markets. So he would meet some customer expectations such as highest quality, leading technology, competitive prices, flexible customization capability, best service and support, individual and company accountability, financial stability and superior corporate citizenship.

His cool new idea was to sell personal computers (PCs) directly to consumers from lower prices but offering limited customer support. 

STRATEGY 

Dell's differentiation strategy is based on some core elements: direct to the customer, built to order manufacturing which includes desktops, workstations, network servers and laptops, mass customization, just in time components inventories, partnership with suppliers, direct sales, market segmentation, customer service and data & information sharing with both supply partners and customers. Dell also offers a wide range of optional peripherals like monitors, cable, modems, video, and  data storage.  Dell is the leader in direct sales of computers. The idea behind selling computers directly to customers was to better understanding of consumers needs and to provide the most compelling solutions to meet those consumer's needs. According to Michael Dell, PC business had two advantages; first advantage is carrying a large stocks of parts and components and finished goods reduces the costs and risks. And the second advantage is bypassing retail dealers and distributors, selling computers directly to customers help company to eliminate unnecessary time and cost.