Businesses today operates under intense competition and are under pressure to provide a product/ service that is customized, of high quality, and delivered in time at lowest possible cost. The growth and development of electronic and communication technology has been a key environmental factor that has revolutionized business in recent times. Many successful business organizations have harnessed electronic and information technology, especially internet to improve the efficiency and effectiveness of their business processes to gain competitive advantage. E-business involves business communications and transmissions over networks and through computers, specifically the buying and selling of goods and services, and the transfer of funds through digital communications. (Hutt & Speh, 2004)
Dell Computers is a classic example of an organization that has used internet technology to successfully refocus its business from a traditional business model to an e-business model. It has used Internet to improve the efficiency of many of its business processes and enhanced customer focus, responsiveness and relationships in all its customer segments including individual consumers, small businesses and large corporations. Dell is now able to align with its customers through the internet, on order management, product configuration, design and customization. This has resulted in better service and more satisfied customers for Dell.
The Dell website allows the company to provide low-cost access to both order entry and order tracking 24 hours a day, seven days a week. This has reduced personal selling efforts and driven down the transactions costs massively both for Dell and its customers. The advent of globalization has resulted in supply chain of any organization becoming a key cost driver. Dell has used Internet to electronically link customers, suppliers, intermediaries and alliance partners in spite of organizational, geographical and functional boundaries. It has helped the company to drastically reduce the lead times as vital data with respect to sales forecasts, production plans, delivery schedules, shipments through distribution network and inventory levels at various stock points is shared amongst the participants of the supply chain on a real time basis. The unauthorized use of such competition critical information is a major risk facing Dell.
Effective communication has always been a major challenge to any business. Dell has used Internet to expand its communication capabilities with its customers. Internet leverages the advantages of both, advertising which is paid form of non personal mass communication and personal selling which is face to face communication. Dell provides real time, up-to-date, low cost and fairly customized information to its potential customers in different segments. This has reduced the company’s expenses on communication mix to a great extent. The major limitation of Internet as a communication tool is that it is impersonal, though information can be customized to a large extent. The purchase of computers is associated with a fairly complex buying behavior, especially for individual consumers. The over emphasis of Dell on Internet technology may drive many of the customers, who are more comfortable with face to face communication for their information needs, to its competitors.
Dell has used Internet technology very effectively to penetrate far-flung global markets. It has exploited the technology to expand its customer base all over the globe by implementing order and procurement management systems as well as sales, marketing and customer support functionality. Its website has provided it the necessary coverage freeing it from investment in sales force or “bricks & mortar” assets in every potential market. The company also uses the internet to provide a wealth of marketing information with respect to the segments, the customers and their charging needs. Such information can be used for better responsiveness.
Dell’s e-business success has resulted in the risk of delineating with members of its distributor channel who perform vital marketing activities. The major risk Dell may face in future is that it may not receive co-operation from its channel members when a future unforeseen situation may call for their support. So also most of the company’s strategic data is also available to its competitors who can easily respond to its strategic moves. The confidence and the security involved in electronic payments still remains a challenge to Dell.
Hutt, Michael, D & Speh, Thomas, W (2004), Business Marketing Management, Thomas Southwestern pp. 117 – 144