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Technology Stocks : Dell Technologies Inc.
DELL 127.92+0.4%Dec 30 3:59 PM EST
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To: calgal who wrote (165769)6/10/2001 3:20:03 PM
From: t2  Read Replies (1) of 176387
 
Dell's price war strategy seems pretty clear. Leave the business to very few large PC companies.
In the end, this strategy may help its key competitors like Compaq and Gateway as well.

The idea is to force as many companies out of business (or consolodation) ahead of the big upgrade cycle coming late this year with Windows XP.

I read somewhere that even being number one does not give a company large enough percentage of the PC market and that is what the large PC vendors want.

There is little incentive to go and buy the no-name brand at a local computer store anymore...and that must be a part of Dell's plan.

I see this strategy as very good long term one. Dell probably did not need to keep cutting prices aggressively just to get share from Compaq...they may have been more interested in taking away business from the emachine types of companies...and also to send the message that new entrants into the business are going to have a very hard time...a strategy to limit new competition.

So when WindowsXP launches, the big players take in the profits as they get a larger share of the overall market. In the meantime, they are getting leaner and leaner.
Seems like a pretty good strategy to me.
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