William,
Hi!!!
RE: So objective...
DELL is easy to figure out....why does the market not realize this company is in diapers? Well, folks are negative and inclined not to believe they can continue revenue growth at these levels....but, what IMO makes DELL so unique is the opportunities that the internet provide...
Thought you may be interested in this: Just received it from someone and hope it wasn't already posted...It says quite a lot...and if you've done your homework it is not hard to see that DELL is way ahead of everyone...
DELL IS IN DIAPERS.....
May 10, 1999
The Outlook
The Outlook
Cambridge, Mass.
Most executives -- barring any lingering Luddites -- know that the
Internet could change almost everything. That has become the
conventional wisdom. What they want to know is how.
For an answer, many are looking to Michael Dell of Dell Computer Corp.,
the leading architect of the Internet-enabled, thoroughly digital
business enterprise. They believe that what Mr. Dell has done to the
computer industry, someone else will do to autos, chemicals, banking
and plenty of other sectors.
That was the starting point one day last week, when 15 executives, plus
a few consultants and professors, spent a day holed up in the faculty
lounge here at Harvard University. As they talked among themselves
about the opportunities and threats posed by the inexorable rise of the
Internet, they began using the word "Dell" as a verb. They concluded
that Compaq Computer Corp., whose chief executive was forced out April
18, is suffering partly because it has been "Delled" -- outflanked by
cheaper products from a thoroughly digitized Dell.
"You want to be the Deller rather than the Dellee of your industry,"
said Ted Rybeck, chairman of Cambridge consultancy Benchmarking
Partners Inc. and host of the meeting. Moreover, it isn't just this
group up in Cambridge that is going to school on the strategies of
Dell, which is based in Round Rock, Texas. Chief executives, including
Lawrence Bossidy of Allied Signal Corp., have sought out Mr. Dell for
conversation and counsel.
What the admirers see isn't so much Mr. Dell's fairy-tale rise from a
few notions in his dormitory room in 1984 to $18.2 billion in revenue
last year. It's more that Dell has bypassed traditional distribution
channels and gone directly to customers. Most important, perhaps, like
Amazon.com Inc., Cisco Systems Inc. and a few other companies, Dell
helped pioneer the almost end-to-end use of digital networks to
communicate with its customer, take orders and then pull together
products from suppliers.
In truth, at the end of last year, Dell was completing only about $3
million in transactions a day -- or just over 5% of total revenue --
over the Internet. But the idea of putting digital networks at the
heart of their company is the vision that has excited senior executives
across the U.S. Last year, they spent about $40 billion just on
"enterprise technology," designed to streamline the flow of information
around companies.
A fair amount of this has been disappointing. Senior executives
regularly discover that they have spent tens of millions of dollars
fixing their year-2000 computer problems with the new systems, but have
often failed to transform their companies into digital powerhouses. But
the spending is likely to continue and expand into the overseas
operations of suppliers and customers.
Even traditional companies are starting to defend against
Internet-based competition. They often have a strategy or a budget for
a digital backbone that will connect the company to suppliers and end
consumers.
"We need to have a defensive strategy" says Peter Burrows, vice
president and chief technology officer at Reebok International Ltd.,
Stoughton, Mass. Reebok has to be prepared if someone tries to do in
shoes and clothing what Dell has done in computers -- eliminate the
middleman and sell direct.
The lesson of the mouse didn't click right away with Barnes & Noble
Inc. The book-retailing giant failed to respond to the arrival in 1995
of Amazon.com until two years had passed. Barnes & Noble launched its
Internet site, a joint venture with German publishing giant Bertelsmann
AG, in 1997.
What all these companies know is how powerful the Internet can be as a
tool to learn about customers. For auto companies, much of that
customer information resides with the dealer. How to keep the dealers
happy but still make contact through the Internet is the delicate but
important strategy for many companies.
As companies collect more information about customers, they see
patterns emerging. Wal-Mart Stores Inc. has used data collection to
formulate "market baskets" of typical shopping trips. Reebok's Mr.
Burrows notes the way an Internet site allows companies to track how
customers scrutinize a product, down to a fabric preference. An
Internet site lets companies watch how customers focus on various
features of products, and they can see when people buy, and when they
just browse and leave.
At the moment, the U.S. is barely in the infancy of this trend, while
Europe, Asia and Latin America are in the embryonic stage. To some, it
heralds the dawning of the new economy, but some wince at the idea that
it spells the end of inventory, business cycles and inflation.
Says Paul Romer, professor of economics at Stanford University's
business school, "It isn't so much that we have a new economy, as we
have a new understanding of the importance of technology in the
economy."
--Bernard Wysocki Jr. |
