Introduction
The purpose of this mini-project is to study the significance of e-commerce on organizations adopting different business model and how it has contributed towards achieving its maximum potential. Inadvertently, we will also look at how e-commerce allows organizations to maximize its shareholder’s wealth.
Company’s Background
Dell Inc. is the world’s leading computer systems company which offers customization of its products and services to serve a wide range of customers’ requirements. Founded by Michael Dell in 1984, with an initial cost of $1000, it is one of the most-admired companies in
Dell’s Business Model
Dell adopts the B2C model as its products and services are directly marketed to end users and corporate customers via the Internet and telephone networks. Classified as a virtual storefront, Dell relies mostly on e-commerce as an electronic business application for e-marketing purposes which are also aimed at commercial transactions.
The widespread of e-commerce in this Information Age also allows Dell to provide exceptionally customizable systems at an affordable rate, much to the delight of the customers. Dell is able to gather useful data pertaining to its supply chain management in the shortest timeframe and meet the demand of customers without sacrificing on the most important factor, quality.
The Internet in particular has significantly enhanced Dell’s business model, making it easier for customers and potential customers to reach Dell directly. It also allows Dell to tap into a pool of market which is geographically dispersed, however wanting to experience the unique proposition Dell promised.
Apart from direct sales through the Internet and telephone networks, Dell has moved towards integrating physical space to market its products and services. In the early 2000, Dell set up kiosk locations in shopping malls across the
Dell’s Payment Scheme
Dell generally assumes upfront payment unless otherwise stated prior to Dell’s acceptance of an order as it supports the just-in-time (JIT) system. JIT is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated costs. In short, the JIT inventory system is all about having “the right material, at the right time, at the right place, and in the exact amount”. When it is implemented correctly, it can lead to vast improvements in the organization’s quality and efficiency.
Payment for the products will be made either by credit card or some other prearranged payment method unless credit terms have been agreed to by Dell. All these are made possible with the existence of e-commerce through the electronic funds transfer; computer-based systems used to perform financial transactions electronically. It is essentially safe to perform such transactions online as it requires users to be authorized and authenticated.
Apart from payment through credit card, Dell also supports payment via wire transfer; a method of transferring funds from one organization to another. Bank wire transfers are the most expedient method for transferring funds between bank accounts. The customer’s bank transmits a secure message (via a secure system such as SWIFT, or Fedwire) to the Dell’s appointed bank, requesting deduction of funds in accordance with the instructions given. The message also includes settlement instructions. An example of an organization which offers wire transfer is Western Union.
Dell’s Website Analysis
Strengths
Dell possesses an advantage as it is the world’s leading computer systems organization in the industry with the innovative idea of marketing its products through the Internet to reach a wider target market. Its website also provides a “Dell Community” which allows visitors to communicate with one another in a more interactive way. Through this community, Dell hopes to achieve a two-way communication with its potential customers, encouraging open conversations with them in order for customers’ satisfaction to be guaranteed. With such sharing sessions, Dell is able to cater to the demands of customers more effectively as they believe everyone has something to contribute to the community. As quoted in the website “We're listening and that’s not just talk”.
Apart from discussion forums, suggestion box and latest blogs updates, Dell has also uploaded a StudioDell Video on its website to allow visitors to preview and rate videos on its upcoming technology in the market.
Also, customers’ reviews are featured on the website as a testimony to the quality products offered by Dell and excellent customer service encountered during their transaction with Dell. Overall, Dell’s website is comprehensive from as can be seen from two different aspects; the customers as well as potential investors in the business. The website conducts as Dell’s most essential touch point; to seek for the latest technology or gadgets in the market, to communicate and contribute ideas, for transaction purposes as well as to attract investors into the money-making business.
Weaknesses
Dell’s website appears to be very verbose with its jargons and may appear to be user-unfriendly to the less IT-literate community. A first time user of the website might find it difficult to navigate around the website. It also appears to be less appealing and enticing for the MTV generations who will be more attracted to bright layouts and outstanding graphics. Hence, Dell needs to improve on its website design and layout in particular to be more simplified and attractive for all users.
Characteristics of Dell’s Website
Usability (7/10)
Usability means ease to use. Dell’s website is observed to be quite easy to navigate only after several visits. It has many direct links to sources of information that visitors need in order to gain sufficient knowledge of the products for sale.
However, the combination of text, graphics and links enables Dell to bring across the intended message to its visitors. The hardest design concept to master is "less is more". Therefore, it is the responsibility of the website provider to prioritize the information presented.
Information Design (9/10)
Information design includes laying out the information that the user wants in a way that makes it very easy to get. One way to accomplish this is to minimize the number of mouse clicks that users must execute to get the information they need or want.
Dell is found to excel in this area as there are many links available on its website which enables visitors to reach the intended destination within few clicks. For example, specific links are dedicated for home or office users, small medium enterprises, MNCs as well as education purposes to allow easy access for them.
Graphics (8/10)
Graphics on the website plays a pivotal role to attract the attention of visitors. As the saying goes, “first impression counts”. Dell manage to distinguish itself as a successful desktop and notebook wholesaler very well by displaying bright and interesting graphics of its products on the website.
The design and graphic used on the website also clearly defines the consumer market targeted by Dell and shows the reliability and trustworthiness of the messages conveyed to the public. Hence, graphic design must be consistent with the target audience. Also, ensure that the theme chosen for the website is able to support the business goals and promote interaction with audience.
Research Two: EBAY
INTRODUCTION
Company Overview
Ebay Inc pioneers communities built on commerce, sustained by trust, and inspired by opportunity. Ebay provides a community for millions of people around the globe to come together anytime anywhere through an array of websites that emphasize on commerce, payments and communications.
Purpose of The Ebay MarketPlace
A powerful global platform in the world of Information Technology that transverses international boundaries where a community of individuals and small businesses can conduct sales of goods and services online.
Millions of buyers and sellers around the world can and are currently processing trades of different variety of items through auction-style and fixed-price trading. To service the needs of people of different nationalities, Ebay offers direct localized sites in Asia Pacific,
FEATURES
Business Model
Ebay adopted two types of Business Models: C2C & B2C.
C2C: The auction-styled trading is the more commonly used method that links people from around the world in their trading activities. Individuals, clients who are registered with eBay, can bid for or list their items with each other directly.
B2C: Ebay has launched a fixed-price trading store system which enables users to set up an online store to sell their products. This small-time business account enables individual client of ebay to pick and select from a variety of items at a fixed price.
Payment Schemes
PayPal, a global leader in online payment solutions with an all-in-one service, was acquired by eBay in Oct 2002. They have more than 153 million accounts worldwide, available in 190 markets and transacting in 17 currencies.
PayPal allows anyone to pay in any way they prefer, including through credit cards, bank accounts, buyer credit or account balances, without sharing financial information. PayPal's service builds on the existing financial infrastructure of bank accounts and credit cards and uses the world's most advanced proprietary fraud prevention systems to create a safe, global, real-time payment service.
PayPal has received more than 20 awards for excellence from the internet industry and the business community -most recently the 2006 Webby Award for Best Financial Services Site and the 2006 Webby People's Voice Award for Best Financial Services Site.
STRENGTHS
Benefits to User
1) User can navigate around ebay website easily and conveniently. The website design and layout is attractive and easily understandable, due to its clearly labeled links and icons. A standardized set of website design is used on all ebay websites around the world.
Necessary explanation pops up when the cursor moves above any icon or keywords.
2) Users have a wide Selection of choices. Being an ecommerce website serving clients from around the world, users now have a wide range of products to choose from.
Be it the hottest Nintendo Wii game console or a fashionable Gucci handbag, users can choose realize their wish list regardless of the product category before the coming Christmas!
3) Users have a peace of mind where payment is concerned. Using Paypal or credit cards, users will be able to conduct their transactions efficiently. All transactions are traceable and Paypal also offer buyer protection up to $200, thus boosting users’ confidence in ebay.
Benefits to Management
1) Increased in value of eBay Inc. Since the very first dated stock price release of eBay, stock price has grown from USD 2.23 on
2) Increased in revenue. The financial statement shows that the net revenue increased from USD3.27B at year end 2004 to USD5.96B at year end 2006. This shows the profitability of the company as well as the viability of the ecommerce system.
*eBay’s earning largely came from its involvement in ecommerce. Profit organization primarily emphasize on their profit making ability and result, therefore it’s main concern is economical benefits. Hence, their revenue and market value can be seen as having a direct relationship with the success of its involvement in the ecommerce operations.
WEAKNESSES
Flaws at User-Level
1) Quality of items- Buyers may receive product at its sub-prime condition. All transactions are done on goodwill and trust, thus buyers have to buy on trust and goodwill while sellers have to sell on their morals and ethics. This has been addressed by the user ranking system which users can read a little about the feedbacks
2) Physical Presence of Products- Buyers cannot touch and feel the physical products when making their purchase. Buyers cannot try out the clothes that they buy or try out the jewelry like rings through the internet. In the case of unfit products, buyers cannot refund the products as most products on eBay have no specified return policy.
Flaws at Management-Level
1) Limited control over its users’ credibility- eBay Inc has millions of registered users. Anyone can just create an account with them and start bidding for the items. Backgrounds and credibility of the users cannot be verified and thus uncertainty arises such as fake bidders and sellers.
2) Site Security-Internet is a global technology which is always under constant threats from hackers and viruses. Professionals must be employed to test the security systems and ensure the security of the operations of the websites.
3) Internet-eBay relies heavily on the use of internet. Hence internet connection plays an important part to their everyday operations. The internet is susceptible to physical cable damages.
If another earthquake rocks
POTENTIAL
Ebay Inc has several potential waiting to be realized as can be seen from their corporate acquisition in 2007. Ebay has further expanded their operations, strengthening their foothold in the ecommerce industry.
1) StubHub - Acquired
All transactions are processed and delivered via StubHub's patent-pending FanNetwork(SM) ticket delivery service, supported by seven-day toll free customer service, and backed by the industry-first FanProtect(SM) Guarantee. Ebay now has access to the events market and this can increase profitability and value to eBay Inc.
2) StumbleUpon- Acquired on 30 May 2007. StumbleUpon, an early-stage company that helps people discover and share content online. With approximately 2.3 million users and approximately five million recommendations daily, StumbleUpon is one of the most popular new ways to discover content on the Web.
This acquisition will provide eBay with in-depth exposure to a fast-growing community-based service with approximately 2.3 million users. This move can be seen as a way to get a share of the file-sharing market.
3) Afterbuy.com – Acquired on
Afterbuy can be connected to external services and business processes such as accounting software or shipping solutions of logistic services. This acquisition is seemed as a way of improving its current auction operations and increasing their presence in the German market.
SPECIAL HIGHLIGHTS
1) Ebay Desktop Application- This application system allows user to watch bid and buy items without the need of using a web browser. It makes use of the hard disk space on your personal computer to store watched items and favourites as well as past purchase history.
Search results are displayed in a graphical list down the left side, while the right side updates to show pictures and item information—much like the preview pane works in Outlook. A real-time countdown display is shown, and you can bid right there on the screen.
2) List with Popular Options- This is a simplified listing form method which is one page long, needing needing only to fill in the fields associated with the most common options. This will appeal to users who wants a quicker and easier way to list their items.
3) Ebay Countdown Beta- A faster way of screen bidding. Users can monitor their auctions with instant updates to the current bid and time remaining for their items. They will also have quicker access to all their watched and bid items.
4) 1 Click Bid - 1 click bid is for all those people who have always wanted an easier way to win an item in the last few precious minutes before an auction ends. Very soon, user will be able to use 1 click bid in the last 15 minutes of an auction to re-bid with one click only.
Users don't have to keep refreshing the browser page and bite their nails as the page loads to see if they are still the highest bidder. Instead user will see a little layer appear on the item page displaying the information they need to plot your bidding moves in the last few minutes.
Instead of refreshing the entire page, they just need to refresh the smaller layer. Faster and more convenient.
