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E-BusinessAC omparison of the Dell and Compaq Websites
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E-Business A comparison of the Websites for Dell and Compaq Computers Introduction e-Business: The conduct of business with the assistance of telecommunications equipment and the Internet e-Commerce: The conduct of commerce: transactions having the objective of supplying commodities, goods and services on the Internet. I believe the terms e-Commerce and IBM’s coined term e-Business are interchangeable and mean essentially the same thing. These definitions I believe, will allow the most effective way of analyzing the two business modules I have chosen for this paper. The two business modules are websites that offer similar products and services namely computers, these sites are: Dell computers: http://www.euro.dell.com/countries/uk/enu/gen/default.htm Hewlett Packard (HP): http://www.hp.com/country/uk/eng/welcome.html The Market Marketers need to promote what customers want. However what the customer considers of value from their purchase is the benefit(s) derived from it. These benefits can be wide ranging i.e. do they help the environment, does this company contribute to charities, the after sales service. Marketing is not just about these things, it entails a much more complex framework and this must include four crucial areas: Analysis, Planning, Implementation and Control. Within e-Business, analysis is of great importance, it will show you where an opportunity exists or could exist, appropriates initiation of a new value chain, identifies which segment of the market to target and establish possible tactics of potential competitors. The value chain, being the business model, can be very simple but also very complex. “The value system can be thought of as the entire ‘chain’ of suppliers, distributors, competitors, buyers, and intermediaries that bring an existing offering to the market”. (J. F. Rayport & B. J. Jaworski, 2001: 27) Market segmentation very rarely rewards companies on their intended objectives because there are different segmentation approaches and each of them must be conducive with the way the company approaches the market. Segmentation consists of many variables: geographic; demographic; behavioral; situational; and psychographics to name but a few, and having the right blend could mean success or failure. However with the use of e-Business some of these variables pose less of a problem than they previously did. E-Business reduces the geographic ties with the use of the Internet. Potential consumer information that was previously very difficult to obtain can be acquired from various data information providers such as www.nua.ie/surveys and cr.yp.to/surveys.html. Using the Internet to increase the sales pipeline you must: focus on understanding your target audience; have an effective Internet Marketing Strategy; deliver the message on what your product to increase the conversation about your website; and finally analyze your strategy to improve it and, as an on flow of that, improve the Return of Investment (ROI). These aspects overlap and relate to each other. To achieve a better understanding of the market the use of a SWOT analysis as a framework to help decision-making is favorable. Both Dell and HP need to constantly assess their situation under each of the headings: • Strengths: what their advantages are, what do you do well • Weaknesses: what could they improve, what do they do badly, what they should avoid • Opportunities: identify emerging trends and advantageous circumstances’) • Threats: what are the obstacles, where is the competition, is the change in technology threatening their position, could any identified threats harm profits. By doing this, they should be in a better position to plan for all eventualities and better able to focus activities to where they are strong and where the greatest opportunities lie. Micro-marketing Micro-marketing is the process of individualizing marketing, so that the product fits the customer perfectly. Dell does this much more convincingly than HP. However much of the marketing that Dell and HP undertake seems to fit fairly well into this category. As the Internet companies become more profit-driven and accountable, marketing research must play a role in providing actionable measurements of marketing efforts. Marketers need to develop their research techniques which will provide them with the ability to correlate market spending to resultant returns in sales and profits. The use of databanks will provide marketers with research results which will assist the marketer in thoroughly understanding the relationship that the consumer has with the brand and how that relationship may be optimized from a profit point of view. Product Life Cycle To be able to market their product(s) properly, Dell and HP must be aware of the product life cycle of its product(s). The standard product life cycle tends to have five phases: • Development • Introduction • Growth • Maturity • Decline It can also be shown graphically. This graph has two lines-one to show the level of profit and one to show the level of sales: Firms will often try to use extension strategies. These are techniques to try to delay the decline stage of the product life cycle. The maturity stage is a good stage for the company in terms of generating cash. The costs of developing the product and establishing it in the market are paid and it tends to then be at a profitable stage. The longer the company can extend this stage the better it will be for them. Dell does not purchase components until a customer has ordered the component; this allows Dell to stay up to date with the changes within technology without worrying too much about the product life cycle. The Product/Service Dell and HP sell basically the same product(s): computers. They sell them to the same market segments at similar prices and with similar benefits. What lies beneath the surface is what makes one company more profitable than the other. After all, profit is the primary focus as you need this in order to continue business, expand and diversify. You need a profit to continue business, to expand and to diversify. Dell’s Business Model This is very simple: make-to-order, cash is received before the product is built or delivered and produces custom results from standard inputs. Cleverly, they reversed the designing and customizing of the individual systems back out to the customer on the website. This gives the potential customer complete control on the specifications of the product and a higher level of service.
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