Professional Documents
Culture Documents
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1.0 Overview of Organization
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1.2 Dells 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 customers 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. Dells technician can remotely access the customer's
computer to resolve the problems immediately (Dell, n.d.).
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1.4 Dells Target Customers
Dells target customers can be classified as relationship customers and transactional
customers. Figure 1 shows Dells 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).
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million revenue while small and medium business accounted $1,040 million revenue.
Total of Dells revenue for this three segment segments accounted 96.78%.
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1.5.4 Company Philosophy
The philosophy for the Dell Company is Well listen, and well respondIts about the
customer. Its 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.).
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2.0 Analysis of Current Business and Competitive Environment
2.1 Dells Current Business Environment
PESTLE analysis is used to assess the company's current external factors. (Aguilar,
1967). Figure 3 is showing the Dells 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 Dells capital cost are affected by the
economic (E) factors. Customers 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 Dells effectiveness. Furthermore, environmental (E) factors such as
resources are affecting company production (Qianwen, 2014).
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2.2 Dells Competitive Environment
Porters 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, Dells 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).
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2.3 Dells Business Strategies
A companys 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 Dells customers is comparatively high, Dells need to build up a
unique business strategy in order to retain its sustainability, fulfill customers
satisfaction and build up customers 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 customers needs and able to projection customers future
demand. In additional, Dell able to know the whole business process and customers
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: Dells Direct Model
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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).
Dells 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 customers 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
customers 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
companys trend and successes, access customers 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. Dells management team used to profile customers, target
customers 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
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3.3 Impact of Implementing Information System (IS) in Dell
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 customers information of Dell. These helping
Dell reduce customers complaint, forecasting and meet the customers 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 customers 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, Dells 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 companys 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 Dells report, Dell PCs daily ordered from Premium
Pages have earned around $5 million which accounted 40% of Dells 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, Dells
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
customers information and maintenance the data. Dell is also facing legal aspects such
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as customers privacy and ethical issues during the CRM implementation (Gray and Byun,
2001).
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Figure 7: Customers Who Use Dells Products and the Sales Revenue
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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 Dells growth and sustainability. By
using CRM and e-commerce, Dell is easily to capture and analyze the customers
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 Fortunes top five Most Admired companies
and ranked No. 28 by Forbes 500 (Shea, n.d.). Dell is famous as the worlds leading
business in terms of customer satisfaction, reliability and technology advancement.
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5.0 Reference
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