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Table of Contents

1.0 Overview of Organization ..................................................................................................... 2

1.1 Dell’s Company Background............................................................................................... 2

1.2 Dell’s Product and Service ................................................................................................. 3

1.3 Dell’s Market Segmentation .............................................................................................. 3

1.4 Dell’s Target Customer ..................................................................................................... 4

1.5 Dell’s Mission, Vision, Values and Philosophy .................................................................... 5

1.5.1 Company Mission ....................................................................................................... 5

1.5.2 Company Vision .......................................................................................................... 5

1.5.3 Company Values ......................................................................................................... 5

1.5.1 Company Philosophy .................................................................................................. 6

1.6 Dell’s Organization Structure ............................................................................................. 6

2.0 Analysis of Current Business and Competitive Environment .............................................. 7

2.1 Dell’s Current Business Environment ................................................................................. 7

2.2 Dell’s Competitive Environment ......................................................................................... 8

2.3 Dell’s Business Strategies ................................................................................................... 9

3.0 Implementation of Information System (IS) ....................................................................... 11

3.1 Current IS Implementations in Dell ................................................................................. 11

3.2 Analysis of the Current IS Implementation in Dell ............................................................ 12

3.2.1 Customers Relationship Management (CRM) ............................................................ 12

3.2.2 E-Commerce ............................................................................................................ 14

3.3 Impact of Implementing Information System (IS) in Dell .................................................. 15

3.3.1 Impact of CRM .......................................................................................................... 15

3.3.2 Impact of E-Commerce ............................................................................................ 16

4.0 Conclusion .......................................................................................................................... 18

5.0 Reference ........................................................................................................................... 19

5.0 Turnitin ............................................................................................................................... 23

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1.0 Overview of Organization

1.1 Dell’s Company Background

Dell was established in 1984 by Michael Dell when he dropped out of his university.

In 1987, Dell was the top mail-order computer company in U.S. By 1994, Dell was come

out new notebook computers and expanded to overseas. By late 1990s, Dell is the top

PCs direct seller in the world (Ford, Honeycutt, and Simintiras, 2003).

Dell is the world's largest personal computer supplier with a growing amount to

billions of US dollars. They are selling products to customers directly by using internet

and mail-order catalogs. Michael Dell said, “We are becoming the PC outsourcing

company, not just the PC supplier” (Heidrick and Struggles, 1997). In order to lower costs

and facilities the whole supply chain, Dell has improved its design, manufacturing,

procurement, and logistics. Finally, it has successful developed notebook and server

product lines and expanded its markets internationally. In 1998, the sales amount has

reached $18.2 billion, gained $1.46 billion of profit. Between years of 1995 to 1999,

Dell’s worldwide PC market share had grown from 3% to 9.2%. From 1994 to 1999, their

stock price has increased forty times; the total market value of the company is more

than $100 billion (Kraemer, et al., 2000).

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1.2 Dell’s Product and Service

Dell offers wide range of product and service to the customers. The products offer

by Dell is desktop, notebook, network servers, workstations, handheld computers,

monitors, printers, high-end storage products, computer peripherals and software. Dell

also offer wide range of electronics and PC accessories such as networking accessories,

digital cameras, camcorders, gaming consoles, LCD televisions, projectors and surround

sound speakers. Customers have the freedom to select the requirements they need;

place and custom configure order directly. Furthermore, Dell has bought a lot of

convenience to customers as they provided simple services to suit the customer's

lifestyle. Dell provides customer’s service and support tool to help customers on

maintenance, installations and setups, ongoing care, troubleshooting and repairs the

computer. This support tool keep customers system running in good condition and

protect customers' personal data. Dell’s technician can remotely access the customer's

computer to resolve the problems immediately (Dell, n.d.).

1.3 Dell’s Market Segmentation

In geographic segmentation, Dell has segmented the global market into 3 parts:

Americas, Asia Pacific, while Europe, Middle East and Africa are group together. For the

age and life-cycle segmentation, Dell target different ages and life cycle group by

providing variety of product and service to customers. In terms of gender segmentation,

Dell has take gender variable into consideration as number of women has gradually

increase in the social status and they are economic independence. Obviously, women

will reflect the difference appearance designed of computer. For behavioral

segmentation, Dell develops different type of computer range to different group of

people such as business people, student, and individual customers looking for home use.

For income segmentation, Dell focuses on middle level income group. Dell has pay

attention to develop low-end products when it starts business in the developing

countries such as China, India and African.

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1.4 Dell’s Target Customers

Dell’s target customers can be classified as relationship customers and transactional

customers. Figure 1 shows Dell’s customer segments. The relationship customers are

large corporations, public sector, and medium business. These customers base are focus

on service, consistency, vendor reputation and product standardization; price for them

is only a secondary concern. Transactional customers are those small business and

individual customers who make transaction-by transaction buying decisions. These

customers are very price sensitive. They are always looking for low price, trustworthy,

and added value products (Weill and Vitale, 2001).

Michael Dell declared that the core customers for Dell are large volume customers

and corporate buyers. Large volume customers do not need a various services from the

dealer and the corporate buyers are having good experience in term of price and

technology. Dell focuses on institutions, business and government as these three

categories are the main contributor which contributes 90% of sales to Dell and 70% of

corporate customers will spend at least $1 million in PCs product per year (Margretta,

1998).

Figure 1: Dell’s Customer Segments

According to Strubel (2010), large corporate includes national and global

corporations accounted for $ 819 million revenue, public sector accounted for $1,361

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million revenue while small and medium business accounted $1,040 million revenue.

Total of Dell’s revenue for this three segment segments accounted 96.78%.

1.5 Dell’s Mission, Vision, Values and Philosophy

1.5.1 Company Mission

Dell aim to “Become the most successful computer industries at offer customers a

remarkable experience in the markets they serve around the world and meet customer

expectations of the highest quality, leading-edge technology, competitive pricing,

individual and corporate responsibility, the best-in-class service and support, and flexible

customization capabilities, outstanding corporate citizenship and financial stability.”

(Farfan, n.d.).

1.5.2 Company Vision

“It’s the way we do business. It's the way we interact with the community. It's the way

we interpret the world around us-- our customers’ needs, the future of technology, and

the global business climate. Whatever changes the future may bring our vision -- Dell

Vision -- will be our guiding force.”

Dell's visions are producing a structural and functional efficiency computer to customers

and build a computer system to suit the individual need (Ziauddin, n.d.).

1.5.3 Company Values

The company values are “superior service and support, easy to buy, easy to use” and

“provides excellent experience at a great values, promised to direct relationships,

providing good products with standard based technology outperforming the competition

with value and a superior customer experience” (Dell, n.d.).

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1.5.4 Company Philosophy

The philosophy for the Dell Company is “We’ll listen, and we’ll respond…It’s about the

customer. It’s that simple.” They are always listening to customers need and want and

take action immediately to fulfill customers require. Customers are always welcome to

contact them directly if customers have any question or problem on the system.

Complete and meet customers satisfaction is their responsibility (Farfan, n.d.).

1.6 Dell’s Organization Structure

Figure 2: Dell’s Organization Chart

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2.0 Analysis of Current Business and Competitive Environment

2.1 Dell’s Current Business Environment

PESTLE analysis is used to assess the company's current external factors. (Aguilar,

1967). Figure 3 is showing the Dell’s current business environment. Political (P) and

Legal (L) factors are the rules decide and set by government regulations and Dell need to

adhere. Buying power of potential customers and Dell’s capital cost are affected by the

economic (E) factors. Customer’s demand and the potential market size are resolute by

the social (S) factors such as demographic change, society cultural, attitude and value.

Technological (T) such as rapid change and adoption of new technologies by other

companies affect Dell’s effectiveness. Furthermore, environmental (E) factors such as

resources are affecting company production (Qianwen, 2014).

Figure 3: Dell’s PESTLE Analysis

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2.2 Dell’s Competitive Environment

Porter’s five force analysis is used to evaluate and judge the competitive

strength and position of the organization (Porter, 1985). Bargaining power of buyer

considered high as customers are high price sensitive and always looking for lowest

price especially huge amount of rival firm in the market. Rivalry among existing firm

concluded to be high as all the computer industry fighting to produce low cost with

better quality. Therefore, Dell must focus in difference area in order to compete with

their competitor. Dell Company never deals with the same suppliers. They will change

suppliers if the suppliers are not satisfying their requirement. Thus, this shows that the

bargaining power of suppliers is high. The growing of smart phone and tablet industry

which are predicted affect the sales of laptop and personal computer as its offer similar

benefit with personal computer. However, Dell’s laptop and personal computer offer

many unique application and software compare with smart phone and tablet. Hence,

threat of substitutes is moderate. The new entrants are difficult to enter into PC market

as Dell has large market share and economic scale which limits new entrants (John,

2012).

Figure 4: Dell’s Porter’s Five Force Analysis

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2.3 Dell’s Business Strategies

A company’s business strategy must show that its value is differentiating among

their competitor in order to succeed in the competitive market (Porter, 2001). The

bargaining power of Dell’s customers is comparatively high, Dell’s need to build up a

unique business strategy in order to retain its sustainability, fulfill customer’s

satisfaction and build up customer’s loyalty by staying ahead of its competitors. Dell is

different with others computer industry which selling product through retailer and

reseller. Dell using its own website (www.dell.com) selling products to customers

directly and provide customized products according to customer orders (Brown and

Eryn, 1999).

Dell has chosen a distinctive business strategy to serve its customer which is

based on direct sales and build-to-order strategy. Through this strategy, Dell has a clear

understanding on their customer’s needs and able to projection customer’s future

demand. In additional, Dell able to know the whole business process and customer’s

activities from order, purchase, deliver, repairing, upgrading, and replacement. It helps

Dell offer add-on products and services to satisfy their customers, coordinate with

maintenance and technician to assist customers in PC repairing and upgrading. This

makes customers easier and convenience to make purchase from Dell (Manataki, 2007).

Furthermore, other key advantages is allow Dell effective use of lean manufacturing

which can minimize inventory, lower cost to given better price and value to customer,

rapid adaptation to new technology and change of demand, and fast arrival of new

products.

Build-to-order process involves the whole production cycle and supply chain.

Therefore, Dell computer designed to reduce the production of human touch, selected

suppliers to make sure high product quality, suppliers are integrate into physical

production, and the whole order fulfillment process is initiated by an internal and

external information system (Kraemer, et al., 2000). Dell business strategies have drive

Dell being the leading computer industries in the world.

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Figure 5: Dell’s Direct Model

Figure 6: Dell’s Built-to-order Process

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3.0 Implementation of Information System (IS)

3.1 Current IS Implementations in Dell

Dell uses information systems to gain competitive advantages to reach the

business goals. The IS currently used in Dell are Supply Chain Management (SCM) and

Enterprise Resource Planning (ERP) to identify specific components, check inventory,

automatically setup components and send to the appropriate suppliers when received

customers order. Electronic Data Interchange (EDI) used to transmitting and receiving

purchase orders, invoices and shipping schedules. Dell also uses "just-in-time" (JIT)

system for manufacturing approach. Order Management System (DOMS) used by

customer service, sales, finance and human resources department for entering order

data and check payment. Customer Relationship Management (CRM) used to determine

customers target and segment effectively. In additional, Dell used IT Inventory

Management, online system and Wed Pages for customers to get all information and

customized products, E-commerce to improve supply chain and customer services. HR

operations and HR management in Dell used Human Resource Management System

(HRM) to motivate and training employee (Wiley, n.d).

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3.2 Analysis of the Current IS Implementation in Dell

3.2.1 Customers Relationship Management (CRM)

Customer relationship management (CRM) is used to build up and maintain a

good relationship with customers. CRM business model used by Dell is direct business

model, where the computer systems are custom-built based on customers’

specifications and services are tailored to customers’ needs. Dell is using CRM system to

contact customers directly and capturing as much information as possible (Klinker,

Terrell and Mahfouz, 2006).

Dell’s CRM system is mainly used by Marketing, Finance and Manufacturing

Department. It facility by 3 types of software which is “Hotlink”, marketing automation

software; “Premier Page”, custom designed Web pages containing purchase data; and

“Proclarity” (Klinker, Terrell and Mahfouz, 2006). Marketing team used “Hotlink” to

monitoring customer and market trends which can effective targeting and

communication on real time (Moon, 2003). Dell get closer with its large customer by

using “Premier Pages” which is a paperless ordering process for configuration, ordering,

services, support, and customized PCs according to customer’s need (Gray and Byun,

2001). According to Michael Dell, the idea of Premier Pages was to “gain less

information about customers – they already know about them – and more to create a

real win-win situation” (Levey, 1999). The process of Premier Pages to understanding

customer’s need is beginning when the customer orders the PC and the PC will built

after the order was confirmed. “ProClarity” have the deeply analytical abilities which

able to highlighted and resulting the positive and negative of business areas and also

break down the sale by region. Management team used “PloClarity” to measure the

company’s trend and successes, access customer’s demographic information, sales

history and trade relationship. Sales team used to track activity within accounts, and

take action on the lapsed quotes while marketing department used to track customer

activity, product sales, and marketing mixes (Klinker, Terrell and Mahfouz, 2006).

On another side, Dell deployed e-Business software which is “i2 Supply Chain

Planner”, “i2 Collaboration Planner”, and “i2 Factory Planner”. This software is designed

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to meet the need of supply chain and coordinate the build-to-order processes from

order to customer support. Dell’s management team used to profile customers, target

customer’s preference as well as determine the outcome. Moreover, Dell used this

system to pull material, track backlog numbers, check stock status, and supplier

commitments. This system can let supplier know what parts to deliver to which factories

and be assembled to meet customer needs. (Klinker, Terrell, and Mahfouz, 2006).

Likewise, Dell partnership with Salesforce.com in online CRM provides system-

integration service for small and medium business. Dell using Salesforce.com to track

sales opportunity, generate and analyze sales report, sales forecasting and view real-

time dashboards (Dell, 2011).

Dell's CRM system involves monitoring global customer's purchase which

provides Dell a better understanding on their business to delivery better services and

right products to customers (Klinker, Terrell and Mahfouz, 2006).

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3.2.2 E-Commence

Since 1995, Dell formed website (dell.com) to provide products information,

technical support and others service to customers. Customers can purchase computer

peripherals, software, and others products from the website. Dell Company has also

display out the firm’s information for example annual reports, stock value, and financial

figures. By 1996, Dell started e-commerce for personal computers and the target market

is mainly on the catalog customers. Customers can choose and deploy a model, acquire

a price quote, and buy the personal computers through online or by phone. The

customer will received a confirmation e-mail after they have make ordering and able to

check the ordering progress through Dell’s order status system. Dell also sells its

refurbished computers at electronic auctions, dellauction.com (Kraemer and Dedrick,

2001).

Likewise, Dell have provides online support website (www.support.dell.com) to

the customers which offered variety support tools in term of products, order, warranty,

resolution assistant, contact details which can online discussion with technicians as well

as customer forum to sharing information and raise up requirement (Dell, n.d.). Dell

used Web Services, an E-Collaboration technology to communication with its logistics

partner on collecting, maintaining and delivering components which can help Dell

company to reduce inventory. Besides that, Dell deployed a ValueChain.Dell.com to

allow suppliers share the real-time information such as inventory, capacity and quality

metrics and cost while Dell share customers demand, product quality and customers

requirement to the suppliers. The entire materials purchase and procurement between

with suppliers is automated (Lewis, 2001).

Dell’s success using E-commerce to coordinates with suppliers, logistics

providers, and distributors of third-party products, system integrators, and service

providers (Kraemer and Dedrick, 2001).

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3.3 Impact of Implementing Information System (IS) in Dell

3.3.1 Impact of CRM

By using CRM, Dell has become a PC industries leader in service and consistency.

Dell has direct comprehensive relationships and builds up a very strong relationship with

customers through custom building and direct business model. CRM improve the

process management and the accuracy of customer’s information of Dell. These helping

Dell reduce customer’s complaint, forecasting and meet the customer’s demands,

delivery high quality products and services to the customers and increasing the sales

volume (Klinker, Terrell, and Mahfouz, 2006). Dell is able to discuss together with its

customers on the technical solutions and provide a variety of internal technical tools to

customers which have save customer’s time and company cost. Dell has fulfilled

customer current needs and requirement as well as tracking their customer changing

demands and expectations through CRM system. With this system, Dell’s marketing

team able to classify and target their potential customers. Moreover, Dell can optimize

information sharing between departments. Most importantly, this system have enables

Dell in one-on-one relationship with customers, improve customers’ satisfaction and

loyalty as well as maximizing company’s profit (Klinker, Terrell, and Mahfouz, 2006).

Dell ability to improve service, retain and obtain new customers without increasing any

cost through CRM system. Based on Dell’s report, Dell PCs daily ordered from “Premium

Pages’ have earned around $5 million which accounted 40% of Dell’s daily online

revenues (Umar, 2003).

CRM system brings a lot of advantages to Dell but there are also have

disadvantages need to face by Dell when implementing CRM system. CRM software is

difficulty integrates with others system and it also costly to Dell as Dell needs more

resources and people to upgrading and running the software. Besides that, Dell’s

employees need a lot of training on the CRM system as this system is complexity to use.

Employees are requiring additional work to input data, continue to updating the latest

customer’s information and maintenance the data. Dell is also facing legal aspects such

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as customer’s privacy and ethical issues during the CRM implementation (Gray and Byun,

2001).

3.3.2 Impact of E-Commerce

Dell has experienced tremendous sales success through e-Commerce. In 1997,

Dell’s online sales reach $1 million a day via internet and the new online clients were

nearly 80%. In 2000, Dell had earned $50 million per day (about $18 billion in a year)

through internet sales and sell $62 billion per year of computer products (Harsono,

2014). The key benefit of e-Commerce is fully automated the entire process of Dell’s

Company, which is faster, efficient, and cost-effective. Dell does not require a

substantial increase in the number of employees although the sales volume is

continuous growing. Dell’s phone bill began dwindling when the company starting using

e-commerce (Klinker, Terrell and Mahfouz, 2006).

The key benefits of the Dell’s e-commerce are face-to-face get in touch among

the buyer and the seller. Staffs are deliver quality product and provide outstanding

customer service and support. Besides that, Dell has succeeded in lowering the

minimum level of inventory in the industry. By mid-2006, it was turned over its

inventory every five days, compared to HP's main competitor average 41 days (Harsono,

2014). As a result, E-commerce has lower Dell’s supply chain cost so that Dell can

reduces costs to customers as Dell can exactly know what customers want and produce

the product without experiencing wasteful resources in production (Breen, 2004).

Dell’s e-commerce allows customers to customize their computer systems such

as mix and match products features. By doing this, Dell has reach $55.9 billion sales in

2004. British Airways is a good example to prove Dell is a strategic supplier. Dell supply

notebooks and desktops to 25,000 British Airways users (Harsono, 2014). Dell has build

up the strong relationship with its customers through E-commerce which help Dell’s

customer service quickly and efficiently in handle customer’s request and also provides

wide range of service to customers.

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Figure 7: Customers Who Use Dell’s Products and the Sales Revenue

Moreover, E-Commerce enable Dell to draw attention of media, others

companies and customers (Kraemer and Dedrick, 2001). The website become a

communication tool for media, press releases, news and information which have build

up the faith between customers, employees, and media (Business 2000, n.d.).

There have limitations of E-commerce as well. Dell only can get to its established

customers and could not reach to the new corporate and government customers by

using e-commerce. Dell must reach the new customers by using direct sales force as e-

commerce unable to reach the new customers (Klinker, Terrell and Mahfouz, 2006).

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4.0 Conclusion

The above study show that complicated and definitely useful IS are necessary to

all business, especially PC industry. IS have enables all different department in a

company look in the same direction and also assure Dell’s growth and sustainability. By

using CRM and e-commerce, Dell is easily to capture and analyze the customer’s

information. Both IS system also provides Dell a major support in creating and

maintaining long-term relationships with customers and delivering the best customer

experience. Dell has successful in maximize operational efficiency and customer

satisfaction as well as reduce the cost and inventory. IS have enable Dell to evaluate

trends, problems, solutions, performance, customer satisfaction in real time and provide

positive feedback to customers.

As a conclusion, both CRM and e-commerce system are successfully

implemented in Dell. Dell has been one of Fortune’s top five “Most Admired” companies

and ranked No. 28 by Forbes 500 (Shea, n.d.). Dell is famous as the world’s leading

business in terms of customer satisfaction, reliability and technology advancement.

(word counts: 3392)

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