DELL COMPUTER
In this time of economic turmoil when most PC makers have stumbled, Dell hasn't missed a beat. Revenue is climbing at a 50% clip, and earnings are growing even faster, at 65%, thanks to Dell's ability to squeeze suppliers and keep costs low. The company's business model, of configuring computers according to customers' exact specifications, enables it to avoid the inventory risk that plagues other PC makers, such as Compaq Computer. (Dell turns over its inventory in one week; most competitors are thrilled to do that in four weeks.) Compaq Computer is again making noise that it will go head-to-head with Dell, but it has failed to deliver on those threats in the past.
It's true that circumstances surrounding Dell's suppliers are worrisome. As disk drive makers get healthier, for example, Dell won't be able to secure fire-sale prices, and profit margins could deteriorate. But there is a huge market for Dell abroad and in cyberspace, and that practically ensures strong growth over the next few years.
iionline.com
StevenN |
