Jim:
Speaking of the "end game" for Dell is difficult. That will result from actions and opportunities accepted by
management. I am still astounded by the performance of Dell, 7 times the growth rate, and most of the profits
They call it a war. Its not a war, its a parade led by Michael with others trying to catch up.
And it looks like Mikie will stay up front.
Others refuse to work adequately on their inside efficiencies, sales efficiency, procurement efficiencies which have to be implemented by lower level employees who will not get the job done without inspired leadership.
Gateway implements the brilliant strategy of setting up stores just when most stores are absolutely stuffed with competing systems and people are learning to buy on-line.
The major war has been and will continue to be in the stores, between HWP and CPQ and Toshiba pricing. EEEE is finished as a company.
I think we vastly overate the importance of stock price to management. Most have left personal money concerns far behind, 200mm shares owned by the Packards, 100mm by Ted Waitt, about 338mm by Dell, and B Gates and Buffett are out-of sight.
That leaves two driving things- power and ideas (or ideals) Which I am not too familiar with( haha).
. The thing I miss most in losing substantial Dell gains, is the idea I could help others, and am forced to spend too much time looking after my own assets.
What Dell has done for the country is beyond measure, breaking the stranglehold held by IBM, Cpq, and other entrenched companys. Preventing Asia ( check EEEE management) from taking over much of the industry as happened to the auto industry. Making jobs for US workers, in addition to benefitting Asian companies that
produce many parts - giving them secure LT contracts. Cutting the prices in Brazil by 50% by building a plant
there and eliminating the 100% import duty.
If stock price alone were the sole object, then shareholders in Cpq, Ibm, HD, and Ford could have been rich beyond measure. The sums wasted by CPQ in buying Tandem and Digital seem staggering, although Dog may dispute that(G)
Its the ego and desire for power that causes these people to want to grow and waste assets in the process
by expanding into more remote areas of lesser profitability. I am not a gambler- those people are gamblers.
They spend billions betting that China will become just as great a consumer as the US.
Grow or die is the motto.
IMO Dell is surprised that some companys will continue to maintain money losing PC divisions.
But there are many advantages for a company to keep running even if losing money.
The reward of free advertising by keeping company name in the public eye (displaying products in stores)
The hope of cutting expenses by re-organizing. Keeping the division on the books as an asset to borrow money Management makes their salary and options even if profits disappear.
Only if all else fails will they take a cut in pay, so they can argue thats the next step.
And hope the economy makes a come-back and PC prices rise.
They won't quit easily !!!!
The last one is where Dells "got'em", because gaining back lost market share is going to be really tough.
Despite not having much Dell, this is the most entertaining game one could ask for.
Regards
Sig (running out of words) |
