Dell Ecommerce Case

CENTER FOR RESEARCH ON INFORMATION TECHNOLOGY AND ORGANIZATIONS University of California, Irvine 3200 Berkeley Place Irvine, CA, 92697-4650

Dell Computer: Using E-commerce To Support the Virtual Company
Authors: Kenneth Kraemer and Jason Dedrick Center for Research on Information Technology and Organizations University of California, Irvine Irvine, CA 92697-4650, USA

June 2001

Contact Authors: Jason Dedrick: jdedrick@uci.edu / Kenneth Kraemer: kkraemer@uci.edu

Dell e-commerce case 6-13-01.doc

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DELL COMPUTER: USING E-COMMERCE TO SUPPORT THE VIRTUAL COMPANY Kenneth L. Kraemer and Jason Dedrick University of California, Irvine INTRODUCTION Dell Computer has been touted by itself and others as a quintessential Internet company. The Internet has given Dell a means for extending the reach and scope of its direct sales business model at a relatively low marginal cost. It has done so in part by automating functions such as product configuration, order entry, and technical support, enabling the company to grow revenues without a corresponding increase in customer service costs. Also, it has used the Internet to coordinate a network of suppliers and business partners who carry out many of the processes involved in building, distributing and supporting personal computers. Dell refers to this network of partners as a “virtual company” linked electronically by the Internet. Another name for this type of industrial organization is the value web (Kraemer and Dedrick, 2000). In early 2000, Dell began to redefine itself as the company that “knows how E works.” Capitalizing on its reputation as an e-commerce pioneer, Dell has offered to share that expertise with its customers as they develop their own e-commerce capabilities. Dell is using the virtual company approach to expand the scope of its business without a commensurate expansion of its own work force and without making a major acquisition. It is doing so by developing a network of software and services... [continues]

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