Dell—Using E-Commerce for Success
PEBA
1-2 Part 1: Introduction to E-Commerce and E-Marketplaces
ONLINE FILE W1.2
Application Case
DELL—USING E-COMMERCE FOR SUCCESS
The Problem/Opportunity Founded in 1985 by Michael Dell, Dell Computer Corp. (now known as Dell) was the first company to offer personal computers (PCs) via mail order. Dell designed its own PC system (with an Intel 8088 processor running at 8 MHz) and allowed customers to configure their own customized systems using the build-to-order concept (see Chapter 2, Appendix 2A). This concept was, and is still, Dell’s cornerstone business model. By 1993, Dell had become one of the top five computer makers worldwide, threatening Compaq, which started a price war. At that time, Dell was taking orders by fax and snail mail and losing money. Losses reached over $100 million by 1994. The company was in trouble. The Solution The commercialization of the Internet in the early 1990s and the introduction of the World Wide Web in 1993 provided Dell with an opportunity to expand rapidly. Dell implemented aggressive online order-taking and opened subsidiaries in Europe and Asia. Dell also started to offer additional products on its Web site. This enabled Dell to batter Compaq, and in 2000 Dell became number one in worldwide PC shipments. At that time, Internet sales topped $50 million per day (about $18 billion per year). Today, Dell (dell.com) sells about $62 billion a year in computer-related products online, from network switches to printers, employing over 88,000 people. Direct online marketing is Dell’s major electronic commerce (EC) activity. Dell sells to the following groups: ◗ ◗ ◗ ◗ Individuals for their homes and home offices Small businesses (up to 200 employees) Medium and large businesses (over 200 employees) Government, education, and health-care organizations allows BA (and other businesses) to browse, buy, and track orders on a Dell Web site customized for the user’s requirements. The site enables authorized users to select
1-2 Part 1: Introduction to E-Commerce and E-Marketplaces
ONLINE FILE W1.2
Application Case
DELL—USING E-COMMERCE FOR SUCCESS
The Problem/Opportunity Founded in 1985 by Michael Dell, Dell Computer Corp. (now known as Dell) was the first company to offer personal computers (PCs) via mail order. Dell designed its own PC system (with an Intel 8088 processor running at 8 MHz) and allowed customers to configure their own customized systems using the build-to-order concept (see Chapter 2, Appendix 2A). This concept was, and is still, Dell’s cornerstone business model. By 1993, Dell had become one of the top five computer makers worldwide, threatening Compaq, which started a price war. At that time, Dell was taking orders by fax and snail mail and losing money. Losses reached over $100 million by 1994. The company was in trouble. The Solution The commercialization of the Internet in the early 1990s and the introduction of the World Wide Web in 1993 provided Dell with an opportunity to expand rapidly. Dell implemented aggressive online order-taking and opened subsidiaries in Europe and Asia. Dell also started to offer additional products on its Web site. This enabled Dell to batter Compaq, and in 2000 Dell became number one in worldwide PC shipments. At that time, Internet sales topped $50 million per day (about $18 billion per year). Today, Dell (dell.com) sells about $62 billion a year in computer-related products online, from network switches to printers, employing over 88,000 people. Direct online marketing is Dell’s major electronic commerce (EC) activity. Dell sells to the following groups: ◗ ◗ ◗ ◗ Individuals for their homes and home offices Small businesses (up to 200 employees) Medium and large businesses (over 200 employees) Government, education, and health-care organizations allows BA (and other businesses) to browse, buy, and track orders on a Dell Web site customized for the user’s requirements. The site enables authorized users to select
References: FOR ONLINE FILE W1.2 Finkle, J. “Top Dell Execs Leave as PC Maker Restructures.” Reuters, December 31, 2008. reuters.com/article/ businessNews/idUSWNAB624720081231?feedType= RSS&feedName=businessNews (accessed April 2009). dell.com (accessed February 2009). dellauction.com (accessed February 2009). National Cristina Foundation. “Dell Recycling.” Cristina.org. cristina.org/dell.html (accessed January 2009).