To: Stoctrash who wrote (27118 ) 12/27/1997 10:59:00 AM From: CPAMarty Read Replies (2) | Respond to of 50808
Dell Is Market Leader In Low-Cost PCstechweb.com (12/24/97; 1:09 p.m. EST) By John Evan Frook, InternetWeek <Picture>Market research firm ARS Data issued a report this week that said Dell Computer has assumed a leadership position in the low-cost personal computer market. That's a big switch for Dell, which traditionally lagged behind competitors like Gateway 2000 in direct sales of low-priced hardware. Dell, Austin, Texas, has long made its name by selling reliable systems and providing strong customer support, but its prices were 12 percent higher than Gateway at the start of the year, according to ARS Data. The La Jolla, Calif.-based researcher said that Dell's prices now are 5 percent lower than Gateway. The news follows the emergence of Dell's Web site, which currently generates about one-third of its sales. One of the leading purveyors of electronic commerce on the Web, Dell's success is significant for more than revenues. The company said it has used its site to trim support costs, and better transform leads into customers. Indeed, a heady 40 percent of 400,000 weekly visitors reach the ordering section. ARS analyst Michael Autrey said in a statement, "Dell is well positioned to compete in this difficult market,'' where PCs are routinely priced below $1,000. "Through manufacturing efficiencies, combined with the margins they preserve by eliminating third-party channels, Dell can effectively compete in the price-sensitive consumer market.'' Dell, which has historically made the majority of its sales to government organizations and business, turned up the heat on the consumer market last fall. It was one of the first computer manufacturers to prepare a Web-based push strategy aimed at providing consumers with new product information, automatic troubleshooting and direct marketing based on personal preferences. Earnings reflect its strategic bid to corral Joe consumer, as the consumer market represents Dell's fastest-growing business segment. As far as manufacturing efficiencies, Dell has made a strong bid to merge Web technologies with enterprise resource planning. Under a directive initiated by company chairman and chief executive officer Michael Dell, the computer manufacturer replaced a server farm running on Tandem Computer servers with Dell-branded servers, and closely integrated the ERP systems with the server farm that supports its Web site. Today, when an order is received over the Web, bar-code information generated by the order goes directly to Dell's ERP system, which manages the assembly of the machine, and the status of the machine's construction is returned to the Web site. The factory is a likely prototype for upgrades at other Dell production facilities in the near future.