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Table of Contents

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


1.1 Dells Company Background............................................................................................... 2
1.2 Dells Product and Service ................................................................................................. 3
1.3 Dells Market Segmentation .............................................................................................. 3
1.4 Dells Target Customer ..................................................................................................... 4
1.5 Dells 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 Dells Organization Structure ............................................................................................. 6

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


2.1 Dells Current Business Environment ................................................................................. 7
2.2 Dells Competitive Environment......................................................................................... 8
2.3 Dells 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 Dells 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,
Dells 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 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.).

1.3 Dells 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 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).

Figure 1: Dells 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 Dells revenue for this three segment segments accounted 96.78%.

1.5 Dells 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


Its 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 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.).

1.6 Dells Organization Structure

Figure 2: Dells Organization Chart

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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).

Figure 3: Dells PESTLE Analysis

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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).

Figure 4: Dells Porters Five Force Analysis

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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

Figure 6: Dells 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).
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

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 firms 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 Dells 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).
Dells 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 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).

3.3.2 Impact of E-Commerce

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


Dells 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 Dells
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. Dells phone bill began dwindling when the company starting using
e-commerce (Klinker, Terrell and Mahfouz, 2006).
The key benefits of the Dells 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 Dells 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).
Dells 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 Dells
customer service quickly and efficiently in handle customers request and also provides
wide range of service to customers.

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Figure 7: Customers Who Use Dells 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 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.

(word counts: 3392)

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