Leigh,
Hi!!
RE: siliconinvestor.com
First, thanks for the link...Excellent article...As a matter of fact some of the lines in this remind me of the tour of Parmer last year...We were told of this new method of calculation costs from suppliers and what it would do the competition...Michael had also discussed this in that long Jan.1 2000 memo to the employees...Looks like that squeeze is on...Wow, this was a great article...For once someone is writing about DELL and what they are capable of doing with the direct method...The advantages listed here are written in a simple manner and someone is finally making it a point to tell people why DELL is unbeatable...Thanks again..Really enjoyed this one...
RE:
Direct sales route
Dell's methods have always differed. It builds its machines to order and shuns sales through independent dealers. By selling directly via the Internet, catalogs and the telephone, it maintains direct contact with customers and can regularly gauge their sensitivity to price changes. It also routinely polls customers on their willingness to pay for new technologies, such as whether they would substitute flat-panel displays for bulkier monitors.
More recently, suppliers and others close to Dell say, the company has developed a cost-forecasting system that underpins its fluid pricing. The company won't discuss in detail how it sets prices, beyond saying that its strategy has cut into its rivals' business. "Contrary to what most companies say, it's not necessary to be price competitive," says James T. Vanderslice, Dell's co-president. "It's most necessary to be cost-competitive."
And Leigh the word spreads fast among the potential customers...I can recall that once our school district had signed the deal with DELL that they gave us back $23,000 since they were that much under the other bids...Let me tell ya...There were quite a few more school districts just in our area that immediately went to DELL...Even our bus drivers were telling me that schools had boxes upon boxes of DELL's that maintenance had to haul in from deliveries because "the deals were far better than the others"...Many of these are possibly up for upgrades now...I know we're looking into portables and the new line from the cable is being dug and covered this past week...
Best, Kemble |
