Introduction
With the ever-advancing technology, the Internet becomes a necessity to most people living around the world. More online businesses have also started to establish as early as the 1990s, to cater to the needs of consumers who prefer to stay indoors. Because of its convenience, more consumers prefer to purchase products online, resulting in more merchants entering businesses through the Internet. This will thus create more competitiveness.
The objective of this report is for us to select a competitive E-Commerce website, and to identify the objective, features, characteristics and analysis of the selected site. After much consideration, we have selected www.dell.com.sg as the E-Commerce websites to research on.
About Dell
Michael Dell founded Dell in 1984 and it is now the world’s leading computer systems company. Dell direct sales operations are currently in 13 markets in the region: Australia, Brunei, China, Hong Kong, India, Japan, Korea, Macau, Malaysia, New Zealand, Singapore, Taiwan and Thailand.
The Company goals are to provide each customer with carefully tailored standards-based computing solutions and develop new innovative products. From the server, storage and professional services needs of the largest global corporations, to those of consumers at home. It does business directly with the customers, one at a time.
1. Objectives
1.1 Purpose of Dell
The Company is based on a simple concept: by selling computer systems directly to customers in persons, via the Internet or phone. Therefore, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs.
The “Soul of Dell" defines the kind of company they are and aspire to become, which serves as a guide for their actions around the world. The core elements of the “Souls of Dell” are:
Customers: Dell believes in creating loyal customers by providing best products and services and outperforming the competition with value and a superior customer experience.
The Dell Team: They believe that their continued success lies in teamwork and the opportunity each team member has to learn, develop and grow.
Direct relationships: Dell believes in being direct in all they do. They are committed to behaving ethically; responding to customer needs in a timely and reasonable manner; fostering open communications and building effective relationships with customers, partners, suppliers and each other and operating without inefficient hierarchy and bureaucracy.
Global Citizenship: They believe in participating responsibly in the global marketplace. Dell is committed to understanding and respecting the laws, values and cultures wherever they do business.
Winning: Dell has a passion for winning in everything they do. They are committed to operational excellence, superior customer experience, leading in the global markets they serve, being known as a great company and great place to work, and providing superior shareholder value over time.
2. Features
2.1 Business Model
Dell uses the direct- sales model (Business to Consumer), which eliminates retailers that add unnecessary, time and cost, or can diminish Dell's understanding of customer expectations. The direct model allows the company to build every system to order and offer customers powerful, richly configured systems at competitive prices. Dell also introduces the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels. Dell's major competitors include Apple, Hewlett-Packard, Sun Microsystems, Gateway, Lenovo, Sony, Acer, Toshiba and Asus. By leveraging its business-model, Dell attempts to undercut competitors and offer customers a more attractive choice of personal computers and other equipment.
Dell sells all its products both to end-use consumers and to corporate customers via the Internet and telephone network. It maintains a negative cash conversion cycle through use of this model: in other words, Dell receives payment for the products before it has to pay for the materials. Dell also practices just-in-time (JIT) inventory-management, profiting from its attendant benefits. Dell’s JIT approach utilizes the “pull” system by building computers only after customers place orders and by requesting materials from suppliers as needed. Since the days of the original dominance of telephone ordering, the Internet has significantly enhanced Dell’s business-model, making it easier for customers and potential customers to contact Dell directly. This model also has enabled Dell to provide very customizable systems at an affordable rate, since Dell manufacturing builds specifically for each customer.
From an organizational structure perspective, Dell has reorganized their whole organization from a very traditional functional structure to a much more process oriented, team-based approach. This structure was, by and large, driven by the offering concept in tandem with the e-business solution or ‘click only’ in other words. Dell has now revolutionized the industry to make computing accessible to customers around the globe, including businesses, institutional organizations and individual consumers.
2.2 Payment Schemes
Dell offers their customers various methods of payment via credit card, telegraphic transfer, cheque or bank draft, direct deposit, flexi payment and financing/leasing.
Credit card payment is very popular among the consumers, accounting for 90% of online purchases. It is worldwide acceptance, easy and secured way of payment. The advantages is that merchants will have in- built security as they process the transactions on site through arrangements made with commercial banks or credit card companies and consumers also gain legal protection. However, there are disadvantages such as high level of merchant fees, cost for consumers may be slightly higher as a result and not everyone has a credit card.
Therefore the various methods of payment offered by Dell have made the transaction process more effective and efficient.
2.3 Security
The Dell Store website is registered with site identification authorities to enable browser to confirm the Dell Store's identity before any transmission is sent. If the consumers are using a security-enabled browser, the information they send Dell regarding their purchase is encrypted, making it extremely difficult to read even if it is wrongly intercepted.
The Dell Store also utilizes industry-standard Secure Sockets Layer (SSL) technology to allow the encryption of: potentially sensitive information such as customers’ name and address, critically sensitive information like their credit card number.
Dell has also implemented an added security measures concerning the privacy of customers credit card information. They encourages consumers to submit their order electronically without a credit card number and a sales representative will contact them personally to obtain the information.
3. Characteristics
3.1 Design Scheme & Graphics
On the homepage of Dell, the consumer is ‘greeted’ by graphical representation of the main products that Dell is offering to them. Not many words are used and this captures the customer’s attention. It is simple and easy to find the information one needs at a glance as most of the information can be found on that single page.
Dell has also classified the solutions into 3 main categories: Home & Home Office, Small Business and Medium & Large Business. This makes it more accessible and convenient for all range of customers. The customer can also alter the size the text on the page, thus catering to each individual who prefers large/regular-sized text and facilitating reading and illustration of the information.
Besides these, the keyword search box and drop down list allows customers to find what they require in a much faster way. Further information about Dell, concerns over privacy, site map and feedback are also available.
4. Analysis
4.1 Strengths
Because of Dell's direct model and the industry's response to it, information technology has becomes more powerful, easier to use and more affordable, giving technology savvy customers the opportunity to take advantage of powerful new tools to improve their businesses and personal lives.
Dell has used its commanding position to introduce many new products and services, especially to corporate customers, such as a custom Dell Web page for corporate accounts.
There is also improved operational efficiency due to mass customization by staying close to the customer using a Web-based order entry model that can build and ship a customized PC to any of its millions of consumers in only a few days, even overnight if the customer is really in a hurry.
For consumers, convenience is a fundamental factor, which affects consumer’s shopping desire. Dell therefore provides their consumers with an unprecedented depth of information necessary to make purchase decisions. They categorize their products according to notebooks, desktops, servers, printers, monitors and different solutions to cater to different type of consumers; this will thus enable them to find the right product at the right price in just a few clicks.
Dell has also developed advanced search technology to help the consumers find the products they are looking for by narrowing their selections according to the screen size, product category and graphics capability. There is a “Dell Deal” feature, which provides the consumers with information on the hot deals products and those advertised products on newspapers and online.
Therefore, consumers can save more time in searching their preferences by using these easy-to-search tools, as they are exact, fast and convenient.
4.2 Weaknesses
There are some difficulties faced by those online businesses as baby bloomers or people who are not comfortable in using the Internet to do online purchases will find it difficult or unsafe to adapt to such way of doing business.
Other than the distribution/production side of the PC business, there's another side to it: the support side. And here, the direct model looks less attractive. If after all, Dell is selling directly to customers, Dell has to shoulder all the related support costs, from handling information requests before the sale to taking and tracking orders to handling service inquiries after the sale. Dell can't offload any of those costs onto resellers or retailers or other distribution partners - because Dell does not have any distribution partners.
The direct sales model provides a cost advantage on the production side but brings a cost disadvantage on the support side.
Now, as long as most of the costs (for Dell and Dell’s competitors) lie on the production side, Dell is golden. If, however, the balance of costs shifts toward the support side, Dell is in trouble.
This is exactly what's been happening in the PC world. As PC prices have plummeted, thanks to cheaper components and ever more automated manufacturing, support costs have not fallen in tandem. Yes, Dell can get economies of scale in support and can automate certain tasks, but in the end there's a heavy labor component to support that sets a floor for costs: customers need to be able to talk to a human being when they have questions or problems.
Dell tested that floor recently, and it got burned by customer-support problems, so now it's having to reinvest on the support side of its business even as it continues to slash prices to hold onto market share. In its last quarterly financial statement, Dell noted, "We have increased our headcount not only to accommodate our global growth but to also improve our customer experience."
So there, perhaps, is the flaw in the direct sales model, particularly when it's applied to a commodity product like the PC: You have a cost disadvantage in customer support, which is hidden as long as support represents a fairly small portion of the each product's overall cost. But as the price of Dell’s product falls, due to savings on the production side, support begins to represent an ever larger percentage of its cost.
Dell's problems are more the result of massive brand failure than business model failure. The company has not added customer value where others, such as Apple, have done so in spades. Dell simply lacks the brand imagination to think beyond the parts it purchases. The company's purchasing logic ultimately led it to believe that its customers were commodities too, best served by least-cost drones.
If innovation is "more customers in the product, less process in the company," Dell has shown that solving only the process part is never enough.
5. Conclusion
From the above analysis, in order to be a competitive e-commerce website, it must be able to meet the customer needs, bringing in new customers and also retaining the current customers in this highly volatile environment it is operating in. This will be contributed by the website’s business model, graphics, security system and many more.
In this case, Dell has provided their customers with customization services which is thererfore a winning point compared to other competitors. Security is also an important issue which customers is concerned about and we can see that Dell has a security system that allows the consumers to give them the trust. More research and development has to be done also so as to present the latest PC technology at the lowest possible cost to targeted customers and only then can Dell continue to maintain its position as the World’s leading computer systems company.
