E-Business "A Comparative Study on Dell Business Model"
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E-Business "A Comparative Study on Dell Business Model"

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Dell Direct Model, E-Business, E-Marketing, Online Marketing, Digital Marketing, Sostac Framework, SWOT Analysis, SLEPT Analsis, SMART Objective, E-Marketing Planning

Dell Direct Model, E-Business, E-Marketing, Online Marketing, Digital Marketing, Sostac Framework, SWOT Analysis, SLEPT Analsis, SMART Objective, E-Marketing Planning

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E-Business "A Comparative Study on Dell Business Model" E-Business "A Comparative Study on Dell Business Model" Document Transcript

  • Table of Contents Introduction:............................................................................................................................... 1 Dell Steering Committee Members: ................................................................................................... 2 Product & Services: ............................................................................................................................ 2 Competitors: ........................................................................................................................................ 3 Differentiator: ..................................................................................................................................... 4 Financial Performance: ....................................................................................................................... 4 Management Summary: ............................................................................................................. 9 Current situation: .............................................................................................................................. 10 Market strategy of dell in Nepal: ...................................................................................................... 10 E-Marketing Planning: ............................................................................................................. 11 E-Marketing Strategy:.............................................................................................................. 14 Background: ...................................................................................................................................... 14 Business Model: ................................................................................................................................ 14 SLEPT on the business model: ......................................................................................................... 14 Environment:............................................................................................................................ 15 Situation Analysis: ................................................................................................................... 15 Objectives Analysis: ................................................................................................................ 17 SMART:............................................................................................................................................ 17 Strategy: ................................................................................................................................... 17 Tactics: ..................................................................................................................................... 18 Action:...................................................................................................................................... 20 Control: .................................................................................................................................... 21 E-Business Strategy: ................................................................................................................ 22 Conclusion: .............................................................................................................................. 24 Reference: ................................................................................................................................ 24 Appendix:................................................................................................................................. 27
  • Figure 1 Dell Logo .................................................................................................................................. 1 Figure 2 Growth of Dell .......................................................................................................................... 5 Figure 3 Dell Performance ...................................................................................................................... 6 Figure 4 Dell sales by Region ................................................................................................................. 6 Figure 5 Dell sales by Segment............................................................................................................... 7 Figure 6 Earning Analysis ...................................................................................................................... 7 Figure 7 Dell Revenue ............................................................................................................................ 8 Figure 8 SOSTAC TM .......................................................................................................................... 11 Figure 9 Internet user in Nepal ............................................................................................................. 15 Figure 10 Dell Direct model surface ..................................................................................................... 22 Figure 11Dell direct model ................................................................................................................... 23 Table 1 Dell Competitor Comparision .................................................................................................... 3 Table 2 Computer Hardward Rank (US) by Sale ................................................................................... 4 Table 3 Nepal's Information.................................................................................................................. 15 Table 4 PEST Analysis ......................................................................................................................... 16 Table 5 SWOT Analysis ....................................................................................................................... 16 Table 6 Tactics & Outcomes................................................................................................................. 18 Table 7 Budget Planning ....................................................................................................................... 19 Table 8 Mobilization of People............................................................................................................. 20
  • Introduction: The name DELL may be synonymous with “direct”, but the computer giant has more diversity in their marketing approach these days. Dell Company is a world one of the largest personal computer vendor, taking an increasing share of the market and making profit in this competitive industry. Dell hit fortune 500 in 1992 and became one of the leading PC industries in USA in 1999. Back in 2001, Dell becomes the world number one PC vender in year 2001. The company’s revenue in fiscal year 2001 was $31.9 billion and it also established itself as the world’s number one computer company The Dell Company products such as computers are sold worldwide covering the most of the country in this globe & it was the first company to start business with the help of the internet. This is to say that Dell is leading use of internet via www.dell.com to enhanced customer loyalty. In other word, Dell is the fastest-growing major company in the industry. Figure 1 Dell Logo Normally Dell delivers a superior customer experience through its unique direct business model. Its business model is different with the other PC vender’s around the globe. Dell sells its product directly to its end customer, which offered a chance to provided add-on product and services. Dell has consistently created exceptional value for its shareholders. The world’s number one direct-sale computer vendor provides a wide range of PC products for the customers and the evolving markets. In attachment with the computers, desktop and notebook, Dell provides networks server, workstation, storage systems, printers, projectors and Ethernet switches. The Dell company also include the 3rd party software and the peripherals. Its developing services unit provides systems integration, support and training. Finally the Dell company plans to being selling through retain stores in 2007. Initially Dell built its fortune with the Microsoft’s windows with the Intel microprocessor but finally in 2006 due to the customer demand it rolled out select the computers with the chips from AMD. After and year and on they started using the LINUX as an option and as well as Sun Microsystem’s Solaris as an operating system. 1
  • Dell traces its origin into the commercial markets to1984 and as we know the founder of the company is Michael Dell. Initially the company operate from the off-campus dormitory room at Dobie Center the startupaimed to sell IBM PC-compatible computers built from stock components. Michael Dell start selling personal computer directly to the customer, PCs Limited could better understand customer needs. Michael Dell dropped out of the school in order to manage his full concentration in the business. After getting about $300,000 in expansion-capital from his family. Dell is listed at number 44 in the fortune 500 list and the third personal computer vendors after HP being first and the LENOVO being second. Dell is the sixth largest company in Texas by the total revenue according ti the fortune magazine. On the geographic basis, Dell conducts and manages its operations worldwide. The Americas, Europe and Asia-Pacific & Japan regions are the three segments of the Dell geographic operations. The company headquarters are located in Austin, Texas and its manufacturing facilities are located in Nashville, Tennessee, Brazil, Ireland, Malaysia and China. Dell Steering Committee Members: S.N: Name Mr Michael Dell 1 Mr Brian T. Gladden 2 Mr Stephen F.(Steve) 3 Mr Mark Jarvis 4 Mr Bradley R. (Brad) Anderson 5 Mr Andrew C. Esparza 6 Mr Stephen J. Felice 7 Mr Martin J. Garvin 8 Mr Michael A. Miles 9 Mr Alex J. Mandi 10 Mr Ronal G. Garriques 11 Designation CEO & Chairperson SVP and CFO SVP and CIO; President, Global Services SVP and Chief Marketing Officer SVP, Business Product Group SVP Human Resource SVP; President Asia Pacific and Japan SVP, World Procurement Director Director President, Global Consumer Group Product & Services: S.N: Name Dell XPS 18 Portable All-In-One 1 Dell XPS 12 Convertible Touch Ultrabook 2 Dell OptiPlex Desktop’s 3 Dell Vostro TM Laptops and Desktops 4 Dell Personal Printers 5 Dell Workgroup Printers 6 Dell Active System 7 Dell Active Infrastructure 8 Dell XPS One 27” all-in-one Desktop with Touch 9 Screen Dell EqualLogic (Enterprise Class iSCSI SANS) 10 Category Product Product Product Product Product Product Product Product Product Product 2
  • 11 12 13 14 15 16 Dell Compellent (Storage Area Networks) Dell Force 10 (Network Swiches) Dell Power Edge (Business Servers) Dell Accidental Damage Protection Dell ProSupport Service Dell Efficient Workforce Product Product Product Service Service Service Competitors: The ring of dell start from desktop to data center. The world’s third supplier of PCs after being HP and Lenovo 1st and 2nd respectively. Dell provides a broad range of technology products in order to maintain their standard in the market. The table mentioned below verify the global competitors of the dell company. According to the total marketing cap the HPQ has 38.82B whereas Dell Company has 23.33B which proves that HPQ is the leading competitors of dell. Likewise LNVGY has 9.36B market cap which is the following competitors of dell. DELL PVT1 23.33B N/A Market Cap: 108,800 7,9671 Employees: N/A Qtrly Rev -0.11 Growth (yoy): 14.75B1 Revenue (ttm): 56.94B N/A Gross Margin 0.22 (ttm): N/A EBITDA (ttm): 4.22B 0.05 N/A Operating Margin (ttm): -99.90M1 Net Income 2.37B (ttm): 1.35 N/A EPS (ttm): 9.89 N/A P/E (ttm): N/A PEG (5 yr 0.90 expected): 0.41 N/A P/S (ttm): Table 1 Dell Competitor Comparison HPQ 38.82B 331,800 -0.06 LNVGY 9.36B 27,000 0.12 Industry N/A N/A 0.00 118.68B 0.24 33.54B 0.12 N/A 0.00 14.36B 0.08 943.37M 0.02 N/A 0.00 -12.89B 575.10M N/A -6.55 N/A 22.40 1.10 16.48 0.68 N/A N/A N/A 0.32 0.28 N/A Pvt1 = Acer Incorporated HPQ = Hewlett-Packard Company LNVGY = Lenovo Group Limited Industry = Personal Computers 1 = As of 2012 3
  • Company Symbol Price International Business Machines IBM Corporation HPQ Hewlett-Packard Company DELL Dell Inc. CSCO Cisco Systems, Inc. XRX Xerox Corporation Seagate Technology Public Limited STX Company AAPL Apple Inc. NCR NCR Corp. EMC EMC Corporation TOSBF Toshiba Corporation Table 2 Computer Hardward Rank (US) by Sale Change Market Cap 194.31 0.00 216.40B P/E 19.97 13.35 20.67 8.38 36.40 0.02 0.00 0.00 -0.02 -0.00 38.82B 23.33B 110.21B 10.26B 13.06B N/A 9.89 11.89 9.50 4.72 417.20 26.54 22.39 5.40 0.02 -0.01 -0.01 -0.01 391.78B 4.34B 47.12B 22.87B 9.96 29.92 18.28 15.47 13.40 Differentiator: Dell Inc. provide a high range of industry leading products, services and the solution to meet the on-going requirements its global customers with the dynamic attitude of dell direct model and the best breed partnerships with the other leading organization in the world such as the Intel, Microsoft, AMD, VMWare etc. The main dell differentiators are listed below: 1. Value for money: The continual cost saving of dell direct model allow us for the better understanding of the end users and ensure that dell customers receive the best value without any unnecessary costs. 2. Speed and ease of procurement: The dell premier page provide order tracking information, purchase history reporting, roadmap information, order status etc to enable the VGA’s to configure, price and order dell products at defined pricing with the configuration unique to the agency. 3. Product Stability & Reliability: Normally dell receive countless awards for its service and the positive support to the customer. 4. Image Direct: it’s the online portal that ensures customer to configure and maintain their SOE, when the update are applied to the master image all the child are then automatically updated. Apart from this dell key differentiator there we can find other many more in practice such as product commonality, best breed partnerships, reporting capability, extensive service capability etc. Financial Performance: According to the dell adoption to the customer, the main practice based upon the increased choice, decreased cost & complexity and product and process interoperability. Dell financial status is increasing the day by day. The financial performance is managed by the following areas: 4
  • 1. Financial Highlight: Financial performance of dell is directly proportional to the virtual growth of dell product and service. Thus the growth of the dell shows the company net profit margin over the year, market cap, revenue growth etc. based on the fiscal year 2012, dell best financial year where it collect the total revenue of $62.1 billion. The enterprise solution and service business, a bellwether for execution of dell strategy grew 6% to $18.6 billion. It was the 30% of the total revenue and was the half of the gross margin dollars. Figure 2 Growth of Dell 5
  • Figure 3 Dell Performance 2. Sales Performance: to supplant sales in the saturated PC market, dell is increasingly entering to the new markets. Although PC markets hold the largest share of the total sales. Figure 4 Dell sales by Region 6
  • Figure 5 Dell sales by Segment 3. Earnings Analysis: Earning analysis is presented in the figure below. Figure 6 Earning Analysis 4. Revenue & Ratio Comparison: The strong performance of the dell was driven by the strategic movement to optimize dell operation and investment in the end-to-end solution and the service capabilities. 7
  • Figure 7 Dell Revenue 5. Stock Analysis: 6. Management Outlook: Dell ended the fiscal year 2012 with almost $62.1 billion in cash and short term investments. This could be the good cash equivalent because of their high liquidity. Another reason is the big source of the cash is the company impressive working capital management. The company strong operations, working capital management and minimum capital expenditure are the reasons for the company outstanding return on invested capital. 8
  • Management Summary: Dell is one of the most successful and profitable computer corporations in the global. It has been known for its innovative customer service and product custom configuration. As it continue to grow, it is faced with the challenge of how to maintain its customer relationship and its inventory management, while continuing to meet the demands and the requirements of its customers. This document will examine the history of the dell company. It normally includes the history behind the dell formation or the organization establishment, its steering committee members, geographical area cover by the dell company along with its size. Likewise this paper covers the product and service of the dell including its major competitors, differentiators and the overall financial performance achieved by the company. The financial performance also examines the total revenue collection, net margin with net profit, gross profit, growth of the company etc. This paper provides the surface level understanding about the progress toward the improving and sustaining the profitability of the dell Inc. Meanwhile, e-marketing planning evaluation using the framework of SOSTAC TM classified on the document. These frameworks consider the proper e-marketing strategy in order to evaluate the e-marketing planning. During this e-marketing planning the SOSTAC TM framework is describe in brief in order to utilise in the next context of the course i.e. emarketing strategy. In other aspect of this document the e-marketing strategy is classified taking the scenario of the dell company. During this phase the case study and research based on the internet is taken in order to make the proper e-marketing strategy for the dell in Nepal. In case of Nepal, dell company strategy is specified by using the trademark of the SOSTAC TM along with the relevant analysis and approach. Secondly, at the bottom of the document the e-business strategy of the dell i.e. direct model is evaluated from sell side of the e-commerce. Likewise, the dell direct model is also considered to boost the dell’s overall e-marketing strategy. Also the impact of the dell direct model in Nepal is also examined in both the aspect. In other word, the document provides the implementing report on the dell direct model in Nepal. These reports also include the SLEPT framework in order to calculate effectiveness of such direct model in the market of Nepal. Also the alternative of the dell direct model is also studies for Nepal in case of the dell direct model implementation failure. Finally at the end of this paper, some of the websites are evaluated whose attributes resemble the dell e-marketing planning and strategy. The list of the website may be of any nature but the structure of their workflow must match the basic roadmap of the dell company. And the evaluation finding is used in order to generate the conclusion for the evaluation. Lastly the conclusion part of the paper verify the overall objectives of the course work regarding the history of dell, e-marketing planning of dell, e-business strategy, site evaluation etc. and the appendix section include the research work completed for the project in order to generate the better solution. 9
  • Current situation: Dell has successfully developed cooperative relationships with the world’s most advanced and unique technological companies around the globe. These companies deliver the latest and advanced relevant technology to dell and from dell this sorts of technology came to the customer business. Dell currently has around 450 certified partners in Europe-almost times the amount that ware certified H1 2009. Recently dell signs a distribution agreement in France & Switzerland with Magirus. Dell partner direct portal is now available in 12 different languages. Dell finalises the acquisition of compellent, building out its storage portfolio. At the current stage of dell’s high performance computing (HPC) solution modular HPC infrastructure stack built from industry-standard hardware components and the best breed of the partner’s products. Dell’s building block strategy ensures the creations of the best in class HPC solutions. The resulting solution provides the performance and the scalability, required by the most demanding applications, at the fraction of the cost of the proprietary systems. Market strategy of dell in Nepal: The commercial market of Nepal is in the phase of promotion. Nepal just marks itself in the map of the global IT community. The dell marketing strategy in Nepal is based on the survey result including the percentage of the people reach to the infrastructure of internet in Nepal. And also the percentage of computer literate in Nepal. Thus being the developing country, Nepal cannot fully support the dell direct model in Nepal. That’s the reason why the hybrid strategy is suitable based on its own nature including the dell direct model and business through the different retailer in the different location. 10
  • E-Marketing Planning: The SOSTAC TM planning system is one of the most powerful planning systems ever developed. Simple but it is extremely effective as it contains all the ingredients vital for the perfect and wise marketing plan. It is the straightforward model that goes systematically through the steps to build a marketing plan, and helps to ensure that all relevant factors are considered, without the need to go into excessive and expensive details. Figure 8 SOSTAC TM SOSTAC TM is an acronym for the 6 basic elements of marketing plan: a) Situation Analysis (Where are we now?): Situation analysis looks at the company from internal SWOT and external PEST point of view to give an overall picture of the company strength, weakness, opportunities and threats & from this point we have the platform to write the effective marketing plan. 1. Internal/External Audits: it normally includes the current internet marketing audits (business, marketing and internet marketing effectiveness), reach of the website, audience composition etc. For internal audits and for external Marco and micro economic environment is considered. 11
  • b) c) d) e) 2. SWOT Analysis: It describe the strength, weakness as the internal factors for business & opportunities and threats as the external factors. 3. PEST Analysis: It describes the political, economic, social and technological aspect of the environment. 4. Demand Analysis: A key factor driving objectives of e-business is the current level and future projections of customer demand for e-commerce services in the different marketing segment. It generates the current and projected customer use of the online channels. Objective Analysis (Where do we want to go?): Objectives analyses determine the corporate business objectives for the online marketing. It includes the tangible and intangible benefits to the business, detailed objectives, online value promotion. Basically SMART Technique is used to generate the objectives in order to maintain smoothness in the online marketing. 1. SMART: It describe the objectives in terms of the specific (with numbers), measurable (confirm achievement), actionable (can we do it?), reasonable (realistic) and timed (time frame deadlines). 2. Business Mission/Objectives: It describes the mission, vision and the key objectives. Strategy Definition (How do we get there?): Strategy defines the investment and commitment to online channels. It also plays the role in the market and the product positing in order to drag the audiences. 1. Segmentation: It involves understanding the grouping of customers in the target market to find out their needs and potential to the revenue source. 2. Targeting: It involves evaluating and selection of the right segments & development of the offers. 3. Positioning: It involves identification of the proposition for each segment. Tactics (The details of Strategy): Tool/ Measures adopted to deal with short term opportunities and threats or used during the implementation of the strategy. 1. Product: The element of the marketing mix that involves researching customer’s need and generating product accordingly. 2. Promotion: Element with in the marketing mix that ensures the communication with customers and other stakeholders to inform them about the product and the organization. 3. Price: It involves defining the product prices and pricing model. 4. Place: It involves distributing products to customers in line with demand & minimizing cost of inventory, transport and storage. 5. People: It delivers the service to customers during interaction with the customers. Action (The daily/Weekly activities): Detailed action plan for the each tool and tactic 1. Tasks: The different process undertaking during the action plan of the tactics defined. 2. Resource: It specifies the different resource required for the detailed action plan. 3. Partnering: Making proper understanding with other 12
  • 4. Budget: It includes budget allocation for the different heading and sub headings including the cost for development, promotion and maintenance. 5. Risk Assessment: Risk management and control portion is covered by the risk assessment field 6. Legal Issues: Different governmental policies and legal issues regarding the action plan are monitored in this section of the SOSTAC TM framework. f) Control (What you need to watch and when): Tracking our progress by measuring, monitoring, reviewing, modifying and updating. 1. Business Contribution: It includes the channel profitability- revenue, costs, and return on investment. 2. Marketing Effectiveness: It involves the channel outcomes-leads, sales, conversion, rate, channel satisfaction. 3. Online marketing Effectiveness: It includes the channel behaviour-page impression, visitors, repeat visits, and conversion rates. 13
  • E-Marketing Strategy: Background: Dell is committed to building value not only for their customers and their business, but also for the communities that the company and its employees call home. Dell relies on the diversity of its personnel, suppliers and customer communities to maximize innovation, growth, competitiveness and customer satisfaction. Currently dell is planning to expand its business in the developing country like Nepal. Dell understand that a company with the extensive supply chain, they have a responsibility to work with their suppliers to promote high standards of behaviour, including sustainable environmental practice, the health and safety of people and fundamental human rights and dignity. Likewise the international strategy focusing on the increased profitability by reaping the cost reductions that come from the experience curve effects and geographical economies. Unlike this strategy dell global business model is based on pursuing a low cost strategy on the global scale. In Nepal, the dell is planning to release the overall product and service from the dell company but at this section the different product and service is released at the different geographical segments of the markets. Business Model: During the phase of expanding the dell horizon in Nepal, their dell the authority can apply different business model such as dell direct model, channel partner model as well as dell hybrid model. In case of Nepal, the dell hybrid model is suitable because the infrastructural development of the country is in the progressive mode. During this phase the dell direct model is not complete suitable because of the lack of the facilities of the telecommunication, transportation etc. These aspects play very important role for the direct model of dell. But using the hybrid model, which is the combination of the direct model as well as channel partners, is feasible in order to obtain the target business goal and objectives of dell for Nepal. The budget allocation for the dell hybrid business model for Nepal is maintain approx. 90 lakhs including the overall cost structure for the e-marketing and planning. SLEPT on the business model: This section is described in the coming section of e-marketing strategy topic. 14
  • Environment: Name of the Country: Nepal Area: 140,800 sq km Population: 23 million Capital city: Kathmandu National language: Nepali People: Hindus, Newars, Tibetans, Gurungs, Magars, Tamangs, Rais , Limbus, Sherpas etc. Government: Republican GDP: US $27.4 billion GDP per head: US $1100 Annual Growth: 6% Inflation: 2.1% Literacy Rate: Key Cities: Kathmandu, Pokhara, Bharatpur, Biratnagar etc. Major Industries: Tourism, Handicraft, Agriculture & Water Resources Table 3 Nepal's Information Among the total population about 23 million of peoples the internet user in Nepal was last reported at 2375777.75 in 2010, according to the World Bank report published in 2012. The internets are the peoples who have access to the worldwide network. The following figure shows the development in the internet user in Nepal. Figure 9 Internet user in Nepal Using the SOSTAC TM Framework for the dell hybrid model: Situation Analysis: PEST Analysis: PEST Analysis of Dell e-marketing in Nepal Economic Political • Nepal Economic Growth • Philosophy of political party • Unemployment rate • Ideology of government or party in 15
  • • • • • power Extend of bureaucracy influence of primary groups Legal issues and regulations Corporate social responsibilities • • • International Economies Effect inflation and fluctuating currency rates Impact of taxation and GDP on sales Social Technological • Cultural influences • Enforcing the new technology • Society attitude • Introducing enticing product to the customer • Marketing of IT products • Expanding the educational markets • • Internet based marketing Table 4 PEST Analysis SWOT Analysis: SWOT Analysis of Dell hybrid Model Weakness Strength • Cross-channel support • Existing customer base • Technology skills • Deal directly with the customer without middle person. • Intermediary use • Existing distribution • Brand perception • Existing brand • • Wide variety of product and services • Opportunities • Cross Selling • New markets • New Product & Services • Alliances & Co-branding Threats • Customer Choice • New Entrants • Competitive Products • Social Media • Channel Conflicts • Traffic trade barriers affect the position in the multiple countries. Table 5 SWOT Analysis Demand Analysis: • Customer access to internet: Based on this figure reflecting the internet user in Nepal, the demand of certain percentage of the customer depends on the internet in order to find out the right product of their choice. 16
  • • • Intermediate analysis: According to the hybrid business model, the huge section of the dell market is based on the access to the internet. That is to say the market place for the combined dell direct model & the channel partner is the different website working on the same filed of e-business or e-commerce. The market place are listed below: 1. www.nepalibazar.com 2. www.hamrobazzar.com 3. www.muncha.com 4. www.enasha.com 5. www.sastobazar.com 6. www.rojeko.com Competitors analysis: The major competitors for dell in Nepal are listed below: 1. HP 2. LENOVO 3. TOSHIBA 4. ASUS 5. ACER 6. APPLE Inc. Conclusion: At the end the outcomes of the situation analysis provides the description results regarding the company performance, advantages, customers, competitors etc. Form this we came to the conclusion that are the markets place based on the customer access to the internet. With regards to this the maximum percentage of using internet remains in the age group of 18-30, and the profession is student. The higher traffic generate from city areas of the country. That is the capitals of the country generate much more traffic than others in Nepal. Objectives Analysis: SMART: a) Long Term Objectives: • To overcome the budget allocated for the e-marketing within 5 years (90 Lakhs). • To make the profit of 5000 per laptops for two years. b) Short Term Objectives: • To support the launch of the dell business in Nepal by generating 50% brand awareness in the immediate country one month before opening. • To measure the performance and progress by using the electronic awareness methods such as point clicking system on social networking websites and dell officials website at the end of fiscal year. Strategy: The dell hybrid model has five key growth channels through which they develop their iconic brands. These are listed below: 17
  • 1. Email Marketing: It is the tool for building relationships with both potential and existing 2. Social Media: The adverting through the social networking sites. 3. SEO: SEO is the practice that aims to improve a website’s ranking for specific keywords in the search engines. 4. Online Advertising: It increases the sales by increasing brand awareness online. 5. Affiliate Marketing: it is the system reward whereby referrers are given a “finder’s fee” for every referral they give. 6. Direct Marketing (direct mail, phone): 7. ORM: The influence and understanding of the perception of the entity online 8. PPC: PPC is advertising on search engines where the advertiser pays only for each click on their advert. 9. Web PR: Public relations on the web. Conclusion: Apart from above mentioned strategy we have other many strategies in the field of e-marketing. Under the consideration of the above mentioned strategy, some of are chosen as the key growth channel for the dell hybrid model in Nepal. The number of people with the internet access is increasing day by day in Nepal so the email, online, affiliate and partner, social media marketing are very suitable for Nepal. Tactics: Using SOSTAC TM Framework the tactics and its outcome are mentioned below: Tactics Email Marketing Online Marketing Affiliate Marketing SEO/ORM Social Media PPC/ Web PR Table 6 Tactics & Outcomes Outcome Customer Retention Branding and Acquisition Sales and branding Customer retention, branding, participation and acquisition Branding and Participation Customer retention, branding and acquisition Apart from this different blogs, social networking plays an important role for the branding, sales for the proposed model of dell in Nepal. 1. Blogs: 2. Advertising: Providing the high percentage for the first few month (10 months) in the field of marketing and slowing reducing the cost for advertising 3. Local Markets: • www.nepalibazar.com • www.hamrobazzar.com • www.muncha.com 18
  • • www.enasha.com • www.sastobazar.com • www.rojeko.com 4. Social Networking: • Facebook (Page, Group) • LinkedIn (Professional network) • Myspace • Twitter (micro blog) • Youtube (Video) • Google+ (Circle, page) 5. Local News (RSS Feed) • Newspaper • Magazine • Radio/Television Ads 6. Web Promotion: • SEO • PPC • Google Analytic • Back Liking S.N: Category Cost 1 Radio/Television 2 Billboard (densely traffic area) 50000/month* 24 1200000 months 40000*12 480000 months=480000/- 3 4 A4 Leaflets 20000/Press Release (500 words with picture 20000*60 days colour) 20000 1200000 5 6 Promotion Booklets (1000 copies) Social media promotion (SEO, Youtube video, Facebook etc.) Staff Salary Equipment’s Others 50000/100000/- 50000 100000 2000000/500000/1000000/Grand Total 2000000 500000 1000000 6550000 7 8 9 Total Table 7 Budget Planning 19
  • Action: 1. Resource: • Capital: this is concern with the total capital required for the marketing plan including the allocated budget. • People: It indicates the direct as well as indirect personal linked to the dell in the business purpose for Nepal. It includes the staff and others such media personal celebrities etc. Mobilization Roles Celebrities President, Nepal Marketing Manager Human Resource Manager Financial Advisor Responsibilities Branding and promotion Managing the execution in the country Making suitable strategy Recruiting & managing the staff and its allowances Decision making based on the budget allocation Table 8 Mobilization of People • System: it includes the various technological system required for the smooth processing of the company. Some are listed below: i. Accounting System (Tally, Fact Accounting) ii. Networking system iii. Technological system like (POS, Real time terminal for advertisement etc.) iv. Online help desk (for customer service) v. Attendance system (HR Management) Organizational Chart for dell in Nepal: 20
  • 2. Finance: The financial status regarding the e-marketing plan is about 90 lakhs Nepalese currency. But the budget plan indicates the maximum utilization of approx. 6550000. Control: Operation Strategy S.N: Goals & Objectives Customer Retention 1 Brand Awareness 2 Branding And Participation 3 Financial Performance 4 Market Situation (Profit/loss) 5 Update on polices and schemes 6 Channel Behaviour 8 Channel Satisfaction 9 Impression Rate 10 Sales 11 Return on Investment 12 Approach Weekly Monthly Weekly Monthly Monthly Yearly Monthly Monthly Weekly Monthly Yearly Destination Databases Customers Customers Databases Databases Databases 21
  • E-Business Strategy: Dell’s direct model, based on direct sales from the PC manufacturer to the corporate customer or to consumers. This methodology is derived from the slicing of the computer industry that took place during the initial phase of the dell establishment. This model removes the intermediaries between the customer and the manufacturer as shown in the figure below. Figure 10 Dell Direct model surface The figure shows the transactions between a supplier organization and its customers. Customers are discovering that the advantages enjoyed through dell’s direct business model are not limited only to the products dell provides but also the service solution they offer. The following figure describes the work flow of the direct model of dell. In sell-side of dell direct model, dell sells their product & service to the organization electronically from their own private e-marketplace website or from website. The sell side is directly suitable for the customization. It allow customer to configure online. You can choose the chip, hard disk, monitor etc. self-customization generates fewer misunderstanding about what customer want, and it encourage business to fill orders more quickly. 22
  • Figure 11Dell direct model For the dell direct model implementation in Nepal, the logical answer is big NO because the internet access user in Nepal is below 60% as of the 2011 data published in 2012 by the government of Nepal. So if the model implemented in Nepal is can’t function well like the other countries in the globe because of the following: • • • • Growing internet market Uncomfortable with credit card sales Uncertain market Costs of enforcing direct model took a sizable chunk away from dell’s earnings. Hence beside the direct model both the hybrid as well as indirect channel partner model is under favourable for the smooth running of the company business. SLEPT on the direct model: i. ii. iii. iv. Social: It plays an important role in the growth and development of country. So we have to think before launching business in the new place. Cultural aspect, health consciousness and age distribution are also the social factors. Legal: different rules and regulation depending on the law of the country are important to understand before starting plan for business. Economic: Some of the economic factors like interest, inflation rates, economic growth & others factors which affect any kind of business. Political: If the political factor is not suitable for the company then either they need to shut down the company or change their policies according to them. Some of the political factors are like the tax policies. As in Nepal we are forced to pay 200% tax for any government like for car, motorbike and for other vehicles. Other factors are trade restrictions and tariffs. These are the serious issues which we need to think of. v. Technology: Ecological aspects, rate of technological change, research and development are the factors for technology. 23
  • Conclusion: Apart from these the dell direct model and its internet application other many companies are moving forward the build-to-order model. Few businesses will avoid becoming an e-business. Those that refuse to change will be overrun by their competitor while running the business in the new geographical area like Nepal. Those who do accept the challenge will benefits from consideration and implementation of the critical success factors that have been described in this paper. There are many points learned from the dell’s experience which is listed below: • • • Ensure better customer service is offered Implement technology in a phased fashion Extend the connection from the customer to the supplier These are major aspect to run the business in the new market place like Nepal. Reference: Introduction to Information Systems: Enabling and Transforming Business - R. Kelly Rainer, Casey G. Cegielski - Google Books. 2013. Introduction to Information Systems: Enabling 24
  • and Transforming Business - R. Kelly Rainer, Casey G. Cegielski - Google Books. [ONLINE] Available at:http://books.google.com.np/books?id=maK8xskEduYC&pg=RA1PA215&lpg=RA1PA215&dq=sell+side+e+commerce+for+dell&source=bl&ots=U60x1iKh4C&sig=6tnvRQjtb 4fPkvuUixE8ZrHOPo&hl=en&sa=X&ei=P6yCUeCUD42GrAfX54HgAw&ved=0CEIQ6AEwA w#v=onepage&q=sell%20side%20e%20commerce%20for%20dell&f=false. [Accessed 02 May 2013]. A Briefly Introduction of South Asian Himalayan Country Nepal. 2013. A Briefly Introduction of South Asian Himalayan Country Nepal. [ONLINE] Available at:http://www.hellonamastenepal.blogspot.com/. [Accessed 02 May 2013]. Internet users in Nepal . 2013. Internet users in Nepal . [ONLINE] Available at:http://www.tradingeconomics.com/nepal/internet-users-wb-data.html. [Accessed 02 May 2013]. Five Key Marketing Strategies for Web Business Growth « Business Growth « Entrepreneurship « Sylvia Browder. 2013. Five Key Marketing Strategies for Web Business Growth « Business Growth « Entrepreneurship « Sylvia Browder. [ONLINE] Available Online Marketing Strategies 101. 2013. Online Marketing Strategies 101. [ONLINE] Available at: http://www.squidoo.com/top-Online-marketing-strategy-for-Home-Business. [Accessed 02 May 2013].at:http://sylviabrowder.com/entrepreneurship/business-growthentrepreneurship/five-key-marketing-strategies-for-web-business-growth.html/. [Accessed 02 May 2013]. Welcome to AVON - the official site of AVON Products, Inc.. 2013. Welcome to AVON - the official site of AVON Products, Inc.. [ONLINE] Available at:http://www.avon.com/. [Accessed 02 May 2013]. Mary Kay | Official Site . 2013. Mary Kay | Official Site . [ONLINE] Available at:http://www.marykay.com/. [Accessed 02 May 2013]. hamrobazar.com :: Nepal's Online Marketplace. 2013. hamrobazar.com :: Nepal's Online Marketplace. [ONLINE] Available at: http://hamrobazaar.com/. [Accessed 02 May 2013]. Talk Fusion | Video Email | Video Communication | MLM |Direct Selling | . 2013. Talk Fusion | Video Email | Video Communication | MLM |Direct Selling |. [ONLINE] Available at: http://www.talkfusion.com/home.asp. [Accessed 02 May 2013]. Top Direct Selling Companies In The World in 2012 - Poll. 2013. Top Direct Selling Companies In The World in 2012 Poll. [ONLINE] Available at:http://www.businessforhome.org/2012/06/top-direct-selling-companies-in-the-world-in2012-poll/. [Accessed 02 May 2013]. 25
  • . 2013. . [ONLINE] Available at:http://www.dell.com/downloads/global/corporate/annual/nar.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://images.hoovers.com/images/i/samples/Dellreport.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at: http://somo.nl/publicationsen/Publication_1956/at_download/fullfile. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://business.missouri.edu/zou/Class/mkt4000/DELL%20Inc%20%5BCompatibility%20 Mode%5D.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://stuff.mit.edu/afs/athena/course/15/15.823/attach/Dell%20CASE.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at: http://dmxdublin.com/wp-content/uploads/2013/03/PRSmith_Developing-Digital-Marketing-Strategy.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://www2.uhv.edu/kuangy/acct6351/Sample%20Projects/sample%20project%20with%2 0pro%20forma%20%20analysis.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://www.businessstudiesonline.co.uk/AsA2BusinessStudies/TheoryNotes/2871/3Hr/PD F%20Non%20Print/09%20SLEPT%20Analysis.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://www.davidmeermanscott.com/documents/Marketing_Strategy_Template.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://www.topsidemedia.com/sites/default/files/Web_Marketing_Plan_Example.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://web.efzg.hr/dok/MAR/vskare//kolegiji/im/materijali/digital-marketing-plantemplate-smart-insights.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://www.chinaclick.com.cn/pdf/resource/SOSTAC%20emarketing%20plan%20for%20B2B%20Company.pdf. [Accessed 02 May 2013]. . 2013. . [ONLINE] Available at:http://i.dell.com/sites/content/corporate/secure/en/Documents/2011_Analyst_Mtg_Web_P DF.pdf. [Accessed 02 May 2013]. 26
  • Appendix: 1. www.hamrobazzar.com 27
  • 28
  • According to the evaluation form for the www.hamrobazzar.com, the first impression of the site is of 78 out of 120 which is the higher than the average rating in context of Nepal. based on the dell company this website not really operate as dell but it is somehow related to the dell because it’s the one of the leading online shopping market in Nepal. 29
  • 2. www.usana.com 30
  • For www.usana.com: It is the world’s leading health sciences companies in the field of the nutrition. The direct marketing is similar to the dell strategy. However the website evaluation form shows the strength of the site. The outstanding results in the different category under the form show the market value of usana.com. 31
  • 3. www.talkfusion.com 32
  • Likewise for www.talkfusion.com: Talk fusion provides the world class video products because they believe on the passion of changing the people’s lives. It is also dedicated on the enforcing the ethical practice and professionalism of the direct selling just like dell company. The website evaluation based on the above mentioned figure displays the outstanding results. 33
  • 4. www.marykay.com 34
  • For www.marykay.com: It is the trusted global name in the field of the skin care, makeup and body care specially for the ladies. This business also implements the direct model for the customer’s satisfaction. During the evaluation of the website the different evaluating factors generate the best result as compare to the other sites in the same business. 35
  • 5. www.avon.com 36
  • Lastly for www.avon.com: Avon is another name globally recognized for the skin care, cosmetic product direct selling online. It also works similar as the dell direct model. It is also the leading brand in the field of the direct marketing for cosmetic products. During the evaluation phase the result generated was outstanding as to the www.marykay.com. Apart from these listed company there we can find many more company who implement the marketing process through the direct model. Some of them are listed below: • • • • • www.dxn.com www.angel.com www.zadly.com www.enagic.com www.cutco.com 37