An example of E-commerce failure and its causes

Dell Computer Corporation is one of the largest firms consisting of approximately 30,000 employees. There are located throughout the United States, containing high top quality supplies and security services. In order for a large company like Dell to grow with all the competitors in the industry, the organization must be willing to take chances, to expand the corporation. However, the risk a company chooses to take can either be detrimental or beneficial. Dell's success over the years has caused concern for the future of the young company. Dell's business-to-business( B2B) exchange failed for a number of reasons.

1) Lack of insight in the research and development area
A lack of knowledge in this area proved to be detrimental because the company was unprepared for the lack of cooperation that other business showed in this new idea. Dell;s strong name and recognition may have worked against it, causing the company to be viewed as purely a computer manufacturer rather than a site also for alternative business products.

2) Recklessly jumped into B2B market
Dell set up a B2B marketplace hoping to allow online consumer sales to flourish. However, the computer industry is extremely competitive with several B2B exchanges taking place on the Web, only the strongest will survive. The computer maker closed the B2B exchange because of a lack of demand and unwillingness of customers to participate.

3) Dell gave up too early in the game
Beginning the business in October 2000 and ending in January 2001 gave them only a short time frame to produce a profit. If the business allowed more time to prove itself, it might have been able to salvage some of its profits as they should have focused on showing consumers that they are not just a PC firm.

4) Dell's choice of suppliers
Dell's suppliers include 3M, Motorola, and Pitney Bowes. They are second-rate firms compared to companiessuch as Compaq, Hewlett-Packard and Gateway. These three firms joined forces and formed an Internet-based exchange and had advantage over Dell.

5) Difficult in choosing best fit match in business world
Maybe if Dell incorporated smaller companies, they would have had more support and the potential for a larger growth. On the other hand, if they were to select a well-known firm, closely related to the computer industry, it could have provided consumers with a high degree of reassurance.

6) Dell was "caught up in hype"
There is no such thing as "easy money" and with all the competition within the computer industry. Dell should have thoroughly researched the positive and negative effects the corporation could receive. However, Dell recklessly jumped into this market and as a result failed after four months.

Luckily Dell is a strong company and was able to survive after the loss. With the future of the B2B commerce looking very bright, it would be a good idea for Dell to continue on this project with an optimistic outlook.