To: Don Martini who wrote (59500 ) 8/19/1998 12:25:00 PM From: Mohan Marette Respond to
DELL's SWELL ! "Our Focus is on the Possibility,not just Revenues""We do see an opportunity to grow much faster in the market," Dell says. "Our focus is on the possibility, not just revenues." "It makes you wonder whether we're doing well because we're doing a good job or because our competitors aren't doing a good job," Dell says, his monotone blending with classical music from hidden speakers. Dell, in short, has a lot of superlatives going for him. One after another his biggest competitors, IBM, Hewlett-Packard and Compaq, have gotten pummeled by price-cutting wars in the computer business, forcing profound changes in how they make and sell computers. "Dell is the one everyone is gunning for," said Chris Goodhue, an industry analyst with the Gartner Group research and consulting firm, based in Stamford, Conn. "Dell has a key structural advantage." The personal attention to corporate clients has paid off in long-term customer loyalty and a legendary ability to win new accounts. Dell's army of hawkers aren't exactly bible salespeople, but their devotion to selling Dell machines approaches religion - with legendary 70-hour work weeks and six-figure incomes lavished on the sales performers who reign in the biggest accounts. Continuing a recent trend, the company's sales grew 54 percent in the past three months, more than double the industry average, and profits rose 62 percent to beat Wall Street expectations. By focusing on higher-end machines with bigger margins, Dell has managed to post consistently strong income even as rivals' narrowed. "If you look at a lot of these low-priced machines, they might appear as a brilliant strategy to expand the market," Dell says. But, he adds, many of these machines are stockpiled older models that don't run a lot of new software. Dell had some rough times in 1993, when the company briefly tried to sell computers through retail stores and unsuccessfully pushed its first laptops. But the company quickly refocused on its roots, hiring top industry managers to help run what had become a multi-billion dollar direct-sales business. Dell's foray two years ago into selling more powerful business machines, servers that run networks of desktops, is handsomely paying off. The models took aim at machines already sold by Compaq, Hewlett-Packard and IBM, which all use off-the-shelf innards such as Intel Corp.'s Pentium II microprocessor and the Windows NT operating system from Microsoft Corp. "You're seeing the results of the direct model, which is just a more efficient way of delivering systems to people," said Roger Kay, an industry analyst with International Data Corp., based in Framingham, Mass. Dell's latest drive is boosting sales over the Internet. The company already is the biggest online seller of computers, with a brisk $6 million in daily business just two years after launching its Web store.
