Best practices in B2B e-commerce : the case of Dell and IBM in the computer hardware industry

Abstract

Research was done on several public sources to identify the 828 practices of two players in the computer hardware industry. As key players in a technology intensive industry, such as computer hardware, yet coming from different starting points, IBM as an incumbent and Dell as an attacker should provide insights in key success factors in e-commerce and their application to a more general group of players in other industries. A framework for analyzing the specifics of the 828 strategy for these two companies was developed. This framework was an adaptation and evolution of the Value Chain and the Integrated Value Chain concepts. This framework provides a better understanding of the relationship between the 828 strategy and the overall strategy of the company. From the results achieved by these companies' 828 practices, several conclusions and recommendations were drawn for IBM and Dell. Specific recommendations on the key issues brought about by the Internet in areas such as channel restructuring, customer relationship management and trends towards providing full customer solutions are provided. This work also shows how specialization and partnerships will play an increasingly important role for computer hardware vendors, as clients look for integrated solutions and one stop buying for products and services. An assessment of the future challenges brought about by new marketplaces such as e-marketplaces, specifically 828 exchanges, shows how companies need to be prepared to embrace e-business rather than e-commerce in order to survive. Other new challenges are analyzed, particularly those related to the commoditization of the computer hardware industry, the birth of PC substitutes, such as wireless appliances, and the use of the Web as the software holder. Finally, a partnership or strategic alliance between these two companies is discussed as a plausible strategy to leverage on their distinct core strengths: Dell's capability to effectively manage outsourcing and the direct channel, and IBM's skills on building in-house capabilities for creating new service lines and developing world class software.