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Technology Stocks : Intel Corporation (INTC)

INTC 35.53

-1.1%

Nov 14 9:30 AM EST

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To: Burt Masnick who wrote (72875)	2/4/1999 2:25:00 PM
From: GVTucker	Read Replies (2) of 186894

Burt, RE:<<My son is a newly minted MBA from an ivy league school and while he was in school he mentioned in passing that, in todays world, it is suicidal to compete solely on price.>> Not true. Some of the greatest companies in the US compete solely on price. Wal-Mart, Southwest Airlines, and Home Depot come to mind immediately, but there are many more. AMD's problem is not that they compete solely on price. AMD's problem is that they are not the lowest cost manufacturer. That other leg is essential for a company that chooses to compete on price. Keep your prices lower than everyone else, knowing that you are the only one that can make money at that price. When others finally catch up to you on a cost basis to match your price, you have also been working on efficiencies and can lower your price even further, maintaining that edge. Intel's long held superior manufacturing ability is what precludes AMD from succeeding at this strategy, and that is why going with a much higher risk strategy of trying the higher end K-6-3 is AMD's only option.

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