Key factors of successful e-commerce - what HP can learn from Dell

Seminar paper from the year 2006 in the subject Business economics - Offline Marketing and Online Marketing, grade: 58, Northumbria University, language: English, abstract: Today Dell is a market leader that constantly gains competitive advantage with its effective e-commerce strategies. The following report was prepared for the Chief Executive Officer of HP in order to demonstrate the opportunities his company could realize by changing its traditional distribution system and starting to make use of e-commerce as a main distribution channel and to efficiently manage the supply chain through the internet.

Advanced e-commerce strategies hold many benefits. Dell was able to benefit from opportunities as they consequently considered some key factors of successful e-commerce:

- A continuous information flow enabled them to improve the relationship between all participants of the supply chain. As a result the company could reduce its inventory costs and deliver customers products and services they require.

- Dell further recognized the importance of a premium customer service as a key element for success. The selling of products directly through the internet without an intermediate is including cost saving potential but also risks due to the missing face-to-face contact between buyers and sellers.

- Further to that Dell aims to meet exactly the needs of its customers by offering mass customized products.

A company like HP should first start to establish e-commerce initiatives as an additional distribution channel as the electronic sale platform is getting a key role in the business life of today.

For a short-term step-by-step introduction of e-business the following recommendations could serve as a guideline:

1. integration of the internal databases in order to provide comprehensive information

2. create an e-business platform and make product range offered through catalogues available through an internet store.

3. establish electronic supply chain management.

4. Offer an effective online customer service through personalized web pages and the establishment of customer interaction centres.

This way the company can prevent losing market share to competitors like Dell and other successful e-business companies.