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

To: Chuzzlewit who wrote (48345)	6/20/1998 2:58:00 PM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176387

Chuz, I agree entirely with you. There clearly are economies of scale in the areas you mentioned. The point about the savings resulting from buying components in volume having a downside in the effect on inventory is an interesting one. Clearly, these firms as they expand at some point experience diseconomies of scale. As you say they become bureaucratic behemoths. BTW, one person who seems acutely aware of this is Michael Dell. I felt one of the most interesting points he made in the HBR article was the inefficiencies computer firms experience when they become large. He said that the large, vertically integrated firm, the model of the 1980's (IBM,DEC), is a thing of the past. Virtual integration, he thought, could exploit many of the advantages of "verticality" without engendering the management difficulties expected from with actual integration. One of the things I admire most about Michael Dell is his keen sense of economic efficiency (not to be confused with engineering efficiency). Thanks very much for your kind remarks to me. Geoff