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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Paul Merriwether who wrote (21396)	11/13/1997 11:23:00 AM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

First off, I'm not annoyed by your comments (biblical or otherwise), I'm amused because you haven't supported a single comment you made. Secondly, the point behind my comment about HP vs. TI is not that higher quality wins out, it's simply that differing marketing strategies that can be equally effective. Third, you make the mistake of confusing the ease of assembly of a single product with lack of technology and expertise required for mass production. Dell has constructed a manufacturing/assembly system that has become the standard in the industry. It is the paradigm! Now, other companies such as CPQ and AAPL want to emulate that approach. Still others, like GTW, find that they don't know how to make the plan work (GTW had major inventory problems). The jury is out with respect to CPQ, because we have insufficient evidence of how well it has executed the plan. So to breezily dismiss the model by saying that a host of other companies know how to do it is specious. Perhaps you think that Dell's advantage is temporary. That may or may not be true, but let's wait until we have some real data. But regardless of what you feel, you should recognize the following: avoiding retail channels and using BTO allows companies to maintain lean inventories, which in turn leads to high ROA's, and thus allows (financially, at least) for very rapid expansion of the business. Paul

To: Paul Merriwether who wrote (21396)	11/13/1997 9:09:00 PM
From: jbn3	Read Replies (1) \| Respond to of 176387

re: Dell wants to only concentrate on one particular segment of the market and will have to compete with IBM, DEC, CPQ etc on this segment. Paul, methinks you have been misled. In the last annual report, pages 4-7, we find the following items. "While we are pleased to report that our desktops grew at an annual rate of 53 percent, we also made good progress in our effort to broaden our product portfolio..." "The market for notebook computers continued to grow at a robust rate last fiscal year. Unit sales of Dell Latitude notebooks outpaced the market, increasing 69 percent..." "Following 18 months of preparation in building the infrastructure needed to support an expanded server business, we launched our newest PowerEdge single and dual-processor server that made network computing more affordable for many business customers. As a result, unit sales of servers increased more than 160 percent..." "In fact, we have many more opportunities for growth than we can possibly pursue at any one time. Our challenge will be to focus on those areas that offer the greatest opportunities for improved service to our customers and the best possible returns for our shareholders." While I greatly admire your sister's ability and initiative in building her own computer, I don't believe she was building a network server to someone else's specifications and to work with their specific software. One last quote: "We have broadened our focus beyond inventory, however, to encompass all aspects of asset management including receivables and payables. The result was a cash conversion cycle--the time from vendor payment to customer collection--of negative four days at year-end. This allowed us to generate $1.4 billion in cash from operations during the year. At this level of cash flow, we were able to fund our rapid growth internally while buying back 11 percent of our outstanding shares." If I extend your theory of competition, then Harley Davidson is bound to fail because BMW, Yamaha and Suzuki are now building motorcycles--and shucks, even your sister could assemble the parts. Besides, they are just concentrating on one segment of the transportation market. regards, 3 (I apologize for length of post)