• An example of an E-Commerce success and its causes

Dell.Inc is one of the world’s top providers of computer products and services such as servers, storage, workstations, notebook and notebooks computers, to businesses and consumers. Dell was an early and enthusiastic convert to the Internet, creating its first web site in 1994 and moving many of its business activities to the Internet ahead of its competitors. The company saw that its direct model gave it an advantage in selling online. The company's strategy of selling over the Internet is with no retail outlets and no middleman. Dell’s online sales channel has proven so successful and an Aberdeen Group analyst Kent Allen has asked “Does the consumer need to go to the store to buy a PC anymore?”.

History of Dell.Inc
Dell was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to customers, they could best understand customer needs and efficiently provide the most effective computing solutions to meet those needs. Dell.Inc evolves business strategy by combines their revolution direct customer model with new distribution channels to reach commercial customers and individual consumers around the world.

1. Dell Delivery
Due to its efficient supply chain management, Dell is capable of shipping a PC within 24 hours of receiving an order. This introduction of the internet and e-commerce has helped Dell improve this efficiency and profitability.

2. The front end
A key part of Dell's success is that the site offers consumers "choice and control." Consumers can click through Dell and assemble computer system piece by piece, choosing components like hard drive size and processor speed based on their budgets and needs. This ability allows people to custom design and a lot of people are catch up now. Instant, this direct contact with consumers gives Dell a competitive advantage, which they know what their customers are orders and get feedback on how their site is working.

3. The back end
“Now that many e-tailers have built a customer-friendly front end, their back end supply chain is a greater focus”, says Aberdeen's Allen. The progress on making sure [e-tailers] weren't just capturing the order but was fulfilling the order. That's where Dell is continuing to succeed.

By using a direct-sales model via the internet and the telephone-network, dell has maintains a negative cash conversion cycle (CCC) through use of this model. Dell has no central warehouse facility, so Dell.Inc 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.

4. Dell Ventures
Another piece of Dell’s e-commerce strategy has been Dell Ventures, which has invested $700 million in about 50 Internet companies (as of July 2000), in areas including broadband and wireless communications, business-to-business and business-to-consumer e-commerce, ASPs, server and storage infrastructure, Internet content, and e-consulting. These investments give Dell access to new technologies without expanding its own R&D activities, and may pay off financially if the companies go public.

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