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Technology Stocks : Dell Technologies Inc.

DELL 137.49

-1.1%

9:37 AM EST

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To: Gabriel008 who wrote (23854)	12/2/1997 12:19:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Gabriel, there is one advantage that BTO offers that was not considered. Under this model the consumer can buy a machine built to his requirements. Previously, if you wanted a Compaq you had to buy a pre-packaged group of options: i.e. so much memory, so much hard-drive space etc. This new found flexibility will be very important. This has long been an advantage of companies like Dell and Gateway over companies using traditional retail channels. The H&Q article also said that BTO methods would reduce the boom or bust cycles. Here, I think they are dead wrong. One of the ways to view traditional channels is as a series of "buffers", each capable of holding a certain amount of inventory. BTO eliminates those buffers, so component manufacturers (e.g. dd's) are much more sensitive to the ultimate consumer than they were before, because they now lack the intermediate buffers that can smooth out the peaks and troughs of demand. Regards, Paul

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