Analyzing CRM Implementation at Dell Inc.: Benefits and Risks

This report provides a detailed analysis of Dell Inc.'s Customer Relationship Management (CRM) strategy. It begins with an overview of Dell's business, including its founding, market position, and competitive strategies, particularly its built-to-order and direct sales models. The report then explores the issues Dell faced before CRM implementation, such as the lack of direct customer interaction and limited product-specific information. The core of the report discusses the benefits of Dell's CRM strategy, including improved customer relationships, a loyal customer base, and a significant competitive advantage. The report highlights the software used, like Hotlink, Premier pages, and ProClarity. Furthermore, the report identifies and analyzes potential risks associated with Dell's CRM approach, such as the lack of dealer relationships, dependence on suppliers, and challenges related to quality control. The report provides supporting references and examples to substantiate the findings.

Running Head: Dell Inc., Singapore1
Dell Inc., Singapore
Student’s Name
Professor’s Name
Course Name

Running Head: Dell Inc., Singapore2
Q2 a.) Appraise the benefits of the CRM system for Dell. You should provide a background
of the Dell (name, business, competitive strategy, etc.). Then, identify the problem/issue
encountered by Dell before the CRM system was implemented. Finally, discuss the benefits
of CRM in solving problems of Dell? References and examples should be provided to support
your answer
Answer:
Overview of the Organisation
Dell was founded by Michael Dell in the year 1984. Towards the end of the 1990s, the
company had attained the position of the largest direct PC’s seller in the world. In the year
2005, Dell established its design centre in Singapore (Sg, n.d.). Dell is the world’s largest
personal computer supplier and sells the computers directly by using mail-order catalogues
and the internet. Dell offers a number of products to its consumers which include notebooks,
workstations, monitors, high-end storage products, software, desktops, network servers,
handheld computers, printers, and computer peripherals. The company also offers a lot of
accessories and electronics that include digital cameras, gaming consoles, projectors,
networking accessories, camcorders, LCD televisions, and surround sound speakers (Farfan,
2017).
Dell’s market segmentation and target customers
Dell targets the life style groups and the age groups by offering a number of services and
products to its consumers. Dell also takes the gender roles into consideration as over the years
the numbers of women have attained greater economic independence than earlier and the PC
designs reflect the change (R, 2012). Dell also designs its products as per the behavioural
segmentation keeping in mind the requirements of students, business people, and individuals

Running Head: Dell Inc., Singapore3
purchasing the computers for home use. Dell also designs its products keeping the income-
segmentation in mind and while most of its products are designed for the middle-income
target segment, the company has also started developing low-end products in the recent years
especially in the developing economies (Farfan, 2017).
Business Strategy and Competitive Strategy
Dell has selected a unique business strategy to meet its customer requirements, that is based
on the built-to-order and direct sales strategy. With this strategy, Dell has been able to obtain
a clear understanding of the market demand and customer requirements and was able to aptly
project the future demand (Sg, n.d.).
In its direct sales strategy, Dell is able to discern the customer’s individual requirements and
also the market movement with the help of the information gathered from the order,
purchasing, delivering, repairing, replacing, and the upgrading by the customers. By
processing this information Dell is able to offer its consumers add-on services and products
which will meet the consumer requirements and also provide technical assistance to the
customers, which results in a loyal customer base for Dell (Dells Competitive Advantage &
Strategy, 2015).
The other strategy employed by Dell is the built-to-order process. Dell has managed to
minimise the human intervention in the process and has integrated a selected number of
suppliers, who supply the high-quality components and product parts, into its physical
production system. The whole process of order-fulfilment is managed by an external and
internal information system (Dells Competitive Advantage & Strategy, 2015).
Dell’s CRM strategies
Issues addressed by CRM

Running Head: Dell Inc., Singapore4
Before Dell introduced the concept of build-to-order computers, the consumers went to a
retail store or an electronic store to purchase computers. There was no direct or indirect
interaction with the computer manufacturers and the point of consumer interaction was
limited to the salesperson of the particular outlet (Jayashree, Shojaee, & Pahlavanzadeh,
2011). The main problem that the customers faced was that they could not get production
specific information about the computers that they were purchasing since the salespeople did
not have knowledge about the manufacturing or related processes (Linoff, & Berry, 2011).
CRM strategy of Dell
Dell employs a CRM strategy that focuses on making segmentations and identifying the
potential customers, listening to the customers, learning from the customers, and each
member of Dell’s team is responsible for the learning from the customers (Harsono, 2012).
Dell uses three different kinds of software that automate and facilitate the CRM process.
These are:
 Hotlink: This is the marketing automation software which helps in real-time
monitoring of the trends in markets and consumer needs. This software also provides
Dell with word of mouth advertising (R, 2012).
 Premier pages: This is the software that has the custom designed internet sites or web-
pages for both the individual and the institutional customers. These web-pages allow
all kinds of customers to accelerate and simplify the support and procurement
processes (Jali, 2011).
 ProClarity: This software analyses all the data and highlights the negative and positive
areas of the business and measure the successes and trends of the business. It helps the
marketing department in tracking the consumer activity, sales, and developing

Running Head: Dell Inc., Singapore5
marketing mixes. It also helps the sales management to track the accounts and act on
the lapsed quotes (R, 2012).
Benefits of Dell’s CRM strategy
By implementing the new CRM-SCM strategy Dell has built a strong relationship with not
just the consumers but also its suppliers. This strategy ensures that the computer components
or parts required by Dell’s customers are always available from the suppliers to meet the
specific consumer demands. It also put an effective system in place which ensured that the
final product was efficiently and effectively; shipped and delivered directly to the customer.
This direct consumer focus of Dell’s CRM strategy has given the company a big competitive
advantage over its rivals (Jayashree, Shojaee, & Pahlavanzadeh, 2011). By implementing the
customer-focused CRM strategy Dell has developed a very loyal customer base and since it
costs more to gain new customers than retaining the old customers, the strategy has proven to
be very cost effective by generating a lot of repeat business for Dell (Greenberg, 2010).
Q2. B.) While CRM is being adopted widely for various applications, there are certain risks
associated to its implementation in many organisations. Relate any three (3) risks that you
think Dell could face as a result of implementing CRM in the organisation. You should
support your answer with good reasons.
Answer:
Risks associated with Dell’s CRM strategy
Although Dell’s CRM strategy has proved to be very successful there are a few drawbacks or
risks associated with the same. The three major risks or drawbacks with the Dell CRM model
are:

Running Head: Dell Inc., Singapore6
 Dealers help in promoting the brand name of a company they are associated with. But
in the direct CRM model of Dell, the company does not have the scope to forge any
strong dealer relationships. The other big names in the computer business like HP,
Intel have an advantage of their brand being pushed by the dealer networks. This
could also have a negative impact on the brand name of Dell as they do not have the
dealer support to promote the brand and its products to the customers (Jayashree,
Shojaee, & Pahlavanzadeh, 2011).
 Since Dell does not manufacture any parts or components of the computer, therefore,
it has no research and development facility. The company is dependent on its
suppliers for a standard technology which it offers to its customers. But, there is a
lack of visibility along the complete supply chain of Dell ((R, 2012)). Dell has a huge
range of products, the components for which are sourced from different suppliers for
customers that are spread across countries. The quality checks become difficult and
this can result in product recall causing damage to the reputation of the company. Dell
faced one such situation in 2004 when it had to recall almost 4.4 million laptop
adapters from all over the world due to their overheating defect (Dudovskiy, 2015).
 Dell is dependent on its suppliers for all the product components since it does not
manufacture any part of the computer. This limits Dell’s scope as it can only work
with a few large suppliers and in case some suppliers withdraw, then Dell will suffer
huge losses in income and revenue (R, 2012).

Running Head: Dell Inc., Singapore7
References:
Baran, R. J., & Galka, R. J. (2013). CRM: the foundation of contemporary marketing
strategy. Routledge. Retrieved from: https://books.google.co.in/books?
hl=en&lr=&id=d5SXsI7Tx5AC&oi=fnd&pg=PR3&dq=CRM:
+The+Foundation+of+Contemporary+Marketing+Strategy&ots=rQw3tfy-
Rq&sig=ZO9g_12MPPttLz_V7lwK7Aj0uzo#v=onepage&q=CRM%3A%20The
%20Foundation%20of%20Contemporary%20Marketing%20Strategy&f=false
Dell’s Competitive Advantage & Strategy. (2015, November 25). Retrieved from:
https://toughnickel.com/industries/Dell-Competitive-Advantage
Dudovskiy, J. (2015, September 03). Dell SWOT Analysis. Retrieved from: http://research-
methodology.net/dell-swot-analysis/
Farfan, B. (2017, July 22). All About Dell Computer: Mission, Stats, History, Facts Research
Profile. Retrieved from: https://www.thebalance.com/dell-computer-company-profile-
2892813
Greenberg, P. (2010). The impact of CRM 2.0 on customer insight. Journal of Business &
Industrial Marketing, Volume 25, Issue 6, pp. 410-419. Retrieved from:
http://www.emeraldinsight.com/doi/abs/10.1108/08858621011066008
Harsono, A. (2012). HOW IT-ENABLED SCM AND E-COMMERCE HELP DELL
IMPROVE COMPETITIVE ADVANTAGE. SISFOTENIKA, Volume 2, Issue 1. Retrieved
from: http://www.jurnal.stmikpontianak.ac.id/file/ALEXANDER_-
_SISFOTENIKA_VOL2_NO1_2012.pdf
Jali, S. (2011, March 31). CRM practices in Dell Inc. Retrieved August 18, 2017, from
https://www.slideshare.net/shrayjali/crm-practices-in-dell-inc

Running Head: Dell Inc., Singapore8
Jayashree, S., Shojaee, S., & Pahlavanzadeh, S. (2011). A critical analysis of Customer
Relationship Management from strategic perspective. In 2010 International Conference on E-
business Management and Economics, IACSIT Press, Hong Kong, Volume. 3, pp. 340-345.
Retrieved from: http://www.ipedr.com/vol3/69-M10082.pdf
Linoff, G. S., & Berry, M. J. (2011). Data mining techniques: for marketing, sales, and
customer relationship management. John Wiley & Sons. Retrieved from:
https://books.google.co.in/books?
hl=en&lr=&id=AyQfVTDJypUC&oi=fnd&pg=PR37&dq=customer+relationship+managem
ent&ots=KXFsrpTYBM&sig=J1EpPuoyuBFHbtZ7fSleLtIv-2s#v=onepage&q=customer
%20relationship%20management&f=false
R. (2012, December 04). Customer relationship management (CRM) is a combination of
people, processes and technology that seeks to understand a company's customers. Retrieved
from: https://writepass.com/journal/2012/12/customer-relationship-management-crm-is-a-
combination-of-people-processes-and-technology-that-seeks-to-understand-a-companys-
customers/
Sg, D. (n.d.). Our history. Retrieved August 18, 2017, from
http://www.dell.com/learn/sg/en/sgcorp1/our-history