Dell.com Analysis the Potential the Internet Provides Essay

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Dell.com Analysis

The potential the Internet provides businesses to scale their supply chains, manufacturing, fulfillment, services and new product development strategies globally is exemplified in the decades of lessons learned at Dell Corporation. Of the thousands of businesses that sought transformation of their business models with the Internet by concentrating only on the websites, Dell was immediately contrarian, looking to streamline back-office systems first. This analysis presents how the core strategies Dell continues to differentiate on, including build-to-order, configure-to-order and mass customization continue to earn them new customers and retain existing loyal ones through their website strategies. Dell has taken a more systemic and process-based perspective of their websites and as a result the product configuration, guided selling, pricing and innovative service applications are immediately functional and scale globally. Dell has been able to define a development methodology for online strategies that enables the core strengths of their order management, supply chain, mass customization and services systems. As a result, the experience customers have on the Dell websites drastically surpass those of competitors, as the individualized transactions enabled by tight back office and enterprise systems integration make their online initiatives a lasting competitive differentiator over time.

Introduction

The high technology industry continues to be one of the most volatile and rapid in terms of disruptive innovations completely re-ordering markets with each new product generation. Dell has found a series of strategies for getting out in front of these man y technological innovations by deliberating using its website as a means to listen and serve customers while at the same time attracting new ones. The intent of this analysis is to critically evaluate the Dell Corporation website including how the company chooses to use this online property for promotions, cross-linking, building their role as a trusted advisor in the many technology markets they compete in. Figure 1 shows the Dell website as of March 2011. The design of the site emphasizes the specific segments the company competes in, with navigation across the top of the frame. Dell Services, Headlines and Deals are all shown below the main window which in the screen capture says "Pop.Click.Switch." This main window revolves every several seconds to show another promotion or marketing message and is considered a main segment of their e-marketing campaign. The lower left corner of the site has a selection for country. Dell sells into 160 different nations according to their filings with the SEC, in their 10Qs and 10Ks. The site map is located at (www.dell.com/sitemap)

Figure 1:

Dell.com Website as of March 2011

Dell also hosts their website internally as they are the leading provider of servers globally and hold many of the patents in server virtualization (Venezia, 2010). This gives the company exceptional levels of control over the security levels provided and the levels of support for multimedia, including streaming audio, video and real-time videoconferencing on their enterprise-class systems. Dell has gone through many iterations of business model strategy and market segmentation structuring to arrive at their current model which concentrates on the core segments of the home, small and medium business, public sector including government and the large enterprise (Gemma, 2007). Dell has also successfully redefined lean manufacturing and also made it synonymous with their brand and that their site reflects this (Pritchard, 2002).

Analysis of the Dell.com

Over the last two decades, Dell has been one of the most disruptive innovators of e-commerce there has been in the high technology industry, relying heavily on their website and electronic channels to launch, sell and support a wide variety of PCs, laptops, servers and complete systems. Dell's level of disruptive innovation spans from e-marketing, e-commerce, product configuration, guided selling and the integration of all these Web-based systems to their supply chain operations, which are designed to optimize inventory turns over time (Liu, Mackie, 2008). Of the many disruptive innovations in how to conduct e-marketing through the innovative use of product configuration systems and dynamic pricing, which Dell holds a patent on for build-to-order systems, the company has also re-engineered the online sales cycle as well -- drastically shortening it through the continual evolution of their Website and online initiatives (Moltzen, 2007).

These disruptive innovations from Dell include one of the most advanced approaches to connecting with al listening to customers, which is accomplished through a Dell Community Microsoft accessible from the main website (Altus, 2007). The many initiatives on the Dell website today can be traced back to the strategic decision in 2007 to continue pursuing more of a customer-centric vs. technology-driven focus, with the website being segmented into microsite areas, which serve as customer listening systems (Lawton, Vranica, 2007).

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As social networking has continued to proliferate, Dell actually had a head start on using online initiatives to listen to customers, as their decision in 2007 to initiate customer listening systems in each of the market segments they compete in continued to gather momentum and interest. This aspect of customer listening and now through social networks, interacting and communicating in real time with customers, continues to be one of the core strengths of Dell and is also evidenced by the many social media integration points through their website (Bernoff, Li, 2008). Dell has successfully used social networking and broadcast service Twitter for example in both service and selling strategies very successfully (McCormick, 2009). The Dell senior management team, in reporting on results during Fiscal Years 2009 and 2010, cite the successes of delivering real time customer service and support over Twitter, the sales of low-end laptops, and the innovate use of all social networking sites to sell refurbished systems online. In the filings that Dell senior management has made with the Securities and Exchange Commission (SEC) in their Form 10Ks and 10Qs, the successes of social media stand out as among the most promising online strategies. Dell executives comment in these documents that while social media as a selling platform is still nascent and emerging, its value in increasing customer satisfaction in the home market specifically has been a strong complimentary strategy to the main Dell.com website. Dell has also taken their customer listening systems and strategy to a best practices level on the current site, according to industry experts at Inc. Magazine who wrote that Dell is one of the few high tech manufacturers who can successfully deliver a unified experience across Facebook, LinkedIn, Twitter, YouTube and Flickr (Chafkin, 2010). Also evident from analyzing the SEC filings from Dell and the contributions of founder and CEO Michael Dell to these documents, the company uses its website applications, resource loads, and approaches to e-marketing as a means to test the scalability of their own servers. Dell will challenge marketing teams to device entirely new approaches to streaming media, defining new data structures to support white papers, data sheets, and all other forms of e-marketing and e-selling documents to deliberately test the scalability and security of their servers. Michael Dell sees this as a means to get the company's servers ready for the heavy workloads the company's customers can place on them over time (VARbusiness, 2002).

Dell Quoting, Pricing, Product Configuration and Services Applications

The Dell business model is considered one of the most disruptive due to its state-of-the-art online quoting, pricing, product configuration and services applications that are accessible from their website in any of the languages supported. Dell is considered a pioneer in the development of these systems, having been the first company to successfully integrate quote-to-order, product configuration, pricing and real-time supply chain integration onto their websites (Foreman, Gallien, Alspaugh, Lopez, Bhatnagar, Teo, Dubois, 2010). Integrating to supply chain systems is one of the core strengths of the Dell business model, as the company can routinely attain 26 or more inventory turns a year, nearly twice the level of their nearest competitor (Liu, Mackie, 2008). Dell has often stated in their Form 10Ks and 10Qs on file with the SEC their goal of integrating all their Web-based systems together is to attain an inventory turn level of at least 40 before the year 2013 as they would realize nearly billions in supply chain savings because of operating at this level of efficiency. Dell senior management sees the website and the collection of applications mentioned as a means to better understand and anticipate the needs of customers and respond more accurately and efficiently to customer needs. This strategy of integrating the Web-based online ordering, quoting, pricing, product configuration and services systems together is transparent to the user of their website today yet the real-time performance of these systems synchronized together is evident from the user experience online. After having created a user account and went through the process of configuring a high-end laptop, it became apparent just how well integrated the quoting, product configuration, pricing and supply chain systems supporting the web applications are. As the configuration of the laptop was changed and recalculated for a new price, availability was automatically changed. This availability component of the quote reflects the real-time integration of these systems to supply chain….....

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