Dell Leverages the
Internet
Group D
MGS 3040 Section 3
Professor Melworm
1. Selling directly has given Dell a competitive
advantage.
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Michael Dell changed the whole way his company was selling
computers be eliminating the retail channel by selling directly
to the consumers.
Dell’s strategy is being the cost leaders across the industry.
Dell gained it’s competitive advantage by developing a
superior business processes.
Dell eliminated the retail channel by selling directly to the
consumers
They eliminated the cost of distribution and sales by taking out
the extra cost and eliminated its cost of inventory.
Dell builds every computer to the customer’s order which
mean Dell’s finished goods inventory has been already sold.
2. What information systems does Dell need to
have to sell directly to consumers?
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One of the most important information systems is a
website. The website provides customers with
information on the different products they offer and
that are available to them. Their existing website
offers products for homes and the business sector.
The website is also available in different languages to
make it easier to customers.
They also need to have a system that once a order is
placed it will provide the customer with order status
updates automatically. For example, send a
confirmation once the product is shipped out from the
warehouse and when it is expected to arrive.
3. Besides selling direct, what other programs
has Dell created that give it a competitive
advantage ?
Dell's efficiency comes from two factors. First, they sell
directly to their customers so their distribution
channels are simple and cheap. Second, they focus on
the build to-order philosophy.
 Keeps inventories low.
 Provide customers the ability to choose what they
want in their computers.
 Each product is assign to only one technician, this
way is much easier to assist customers with questions
about a particular product.
4. Does this situation mean that Dell
Computers will be cheaper than HP and other
computers? Why or why not?
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In the case that Dell computers are purchased by consumers on its
website only, not in any retail store, yes their computer will be cheaper
than others. The price for a computer Inspiron 13, is $549.00 similar
computers in www.cnett.com rate between $650.00 in above. This
clearly shows that Dell sell computer in a lower price than other website.
Dells reputation of lower prices allows them to have more consumers to
access to their website more frequently.
On the other Hand, Sony or Hp needs to sell its inventory to below the
consumer’s price or in a discount price to Internet stores or retailer, if
they want to be competitive and attractive to them. This strategy allows
them to get more access to consumer. Nowadays, one of the most
popular Retail Stores is Best Buy and more, more companies use it to
offers their products. This is interesting strategy from companies to
reach all types of customer; from teenager to parents who would go to
the store and see their computer whether it is what they went to purchase
or not.
Continuation of Question 4
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Dell is cheaper in this example for these reasons. One it is a
direct sale (there is no middleman) Dell sells to a customer and
it makes a profit. If it were in a store Dell would sell to best
buy and make a profit then Best buy would sell to the
consumer and need to make a profit also. The second reason is
that Internet sales do not require a "brick and mortar" location.
There isn't a storefront which eats into profits by having lights
employees and an actual physical location.
5. How can HP successfully compete with
Dell?
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Dell is well knowing for desktop production
for many years. desktops are cheaper, so unless
need to travel or take their computers to
meetings, select a laptop. For years HP focus
their business in laptops production, making
easy for those who needs to travel and attend
meetings. laptops are smaller and easy to carry
around, so customers tend to choose a brand
more reliable and well knowing for laptops
production leader.
6. What information system can HP set up
that will better enable it to compete with Dell?
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To enable them to compete with Dell they would need
to use a better Transaction Processing System, which
would make the transactions of new purchases be
made with lesser problems.
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By simplifying the transactions there is less time
processing and more time building the computer.
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Purchasing a desktop from Dell and HP at the same
time HP would have it shipped by 10/13/09 and Dell
would have it 10/19/09 which is a six day difference.
7. Do you think Dell would have been successful if
the internet had not been invented? Why or why
not?
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In 1994 Dell introduced its website www.Dell.com and
only seven months after the release they had internet
sales of approximately $1million per day. Throughout
the years Dell has implemented its website by product
configuration, order entry, and technical support,
helping the company to grow. The Internet has helped
Dell to extend the reach of Its direct sales business.
Dell knows who the end user is, what equipment it has
bought from the company, where it was shipped, and
how much the customer has spent with Dell.