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

To: Gabriel008 who wrote (23854)	12/2/1997 9:56:00 AM
From: Rosemary	Read Replies (2) \| Respond to of 176387

Gabriel, Just when I think I know all the initials here comes some more. What's a BTO & CTO? Thanks

To: Gabriel008 who wrote (23854)	12/2/1997 10:19:00 AM
From: jbn3	Respond to of 176387

Gabriel, Thanks for the post. IMO CPQ's initiative to target first-time buyers with cheaper, limited-feature machines has multiple goals, including the following: 1) to broaden the customer base for PCs. I think it is doing that successfully. 2) to acquire additional market share at the expense of other providers. I think they are enjoying some success here. 3) to eventually eliminate some of the competition by squeezing the profits of less efficient vendors. To soon to tell 4) to build a loyalty market for its higher end home products when the new buyers want to upgrade or need a second machine. To soon to tell. Probably successful, but will depend heavily upon the quality and service experience of those first-time buyers. 5) to erode DELL's growth in the business market by exposing potential customers to CPQs domestic product and hoping that brand loyalty will carry over. Once again, extremely dependent upon the product quality and service experience of the home-consumer. IMO, the point you made in your post about the channel BTO system relinquishing a lot of quality control is going to be a critical item. If quality of product or service becomes a problem, it will negate much of the positive. Much of DELLs success stems from its deservedly excellent reputation, not only in quality, but at least as importantly, in service. Regards, 3.

To: Gabriel008 who wrote (23854)	12/2/1997 12:19:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to 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