Gary,
You asked why a corporation would buy 100 equally configured machines from DELL rather than CPQ assuming that CPQ had a $200 price advantage over DELL
I provided several arguments, one being that I think your initial premise is flawed; that is, false; as Cramer would say, "WRONG".
Quoting my point "B. Every PC magazine report I have seen for the past 18 months lists DELL in a higher consumer confidence position than CPQ. So perhaps that says something for DELL quality."
you replied, "Is this consumers or business users? You respond to different questions using a different basis."
Sorry. I got sloppy, so in trying to save space and time, I didn't flesh out my point well enough for you it seems.
1) PC periodical surveys consistently list DELL at the top of consumer confidence, ahead of CPQ.
2) Some, if not all, corporate buyers are also individual consumers.
3) Some, if not all, corporate buyers also read these surveys.
4) Some, if not all, of those corporate buyers who read the surveys are impressed and influenced by DELLs continued high ratings.
5) Therefore, some of those corporate buyers buy DELL in preference to CPQ.
I regret that I do not have mean failure rates for CPQ and DELL machines. Therefore, I try to extrapolate from the consumer to the corporate using data I do have.
Further, you state: "DELL quality? Now you have me laughing."
Your ignorance in this arena is abysmal. However, you have an excuse, since you are new to the thread and haven't had the benefit of our discussions over the last 60,000 posts.
1) Empirical evidence: if DELL's value added (a function of initial cost, quality, and service) were not BETTER THAN CPQ's value added, how has DELL moved from 5th in market share to a tie with CPQ in only a couple of years? Who is better placed to evaluate them than corporate America, which has voted with its $$$ and its future?
2) Once again, consumer surveys consistently give highest marks to DELL.
Then you state "DELL's components are no different than any other manufacturer might or could use. Again...no barrier to entry."
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Ignorance again? DELL holds several hundred patents. I grant you that is not overwhelming, or perhaps significant, when compared with IBM, HWP, DEC etc. But DELL's primary function is supplying customers with their PC requirements. Ergo, most, if not all, of those patents deal directly with the construction and function of PCs. I doubt that any one of them would present an insurmountable barrier to entry, but taken collectively, they probably comprise a fairly steep hurdle. Is your new manufacturer going to pay DELL royalties to use DELL's processes and technology?
Isn't DELL just a distribution company?
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You ask: What keeps a wealthy businessman from coming in a copying DELL? Answer so far is NOTHING.
CPQ, HWP, and IBM have been trying to copy DELL for a couple of years now, ever since they first perceived DELL as a threat. Obviously, they have had only moderate success...
* Unit sales
gartner11.gartnerweb.com
* IDC says 72% more units
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* European growth and sales
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* DELL to overtake CPQ
news.com
and, of course....
* DELL Q2 earnings
sec.yahoo.com
briefing.newsalert.com
* CPQ Form 10Q Q2 earnings
sec.yahoo.com
go2net.newsalert.com
* HWP Q2 earnings
sec.yahoo.com
My question for you: Assume you were a wealthy businessman, who plans to take a shot at DELL (even though CPQ, GTW, HWP, and IBM have done so and failed)... How are you going to do it? Please go through step by step, how much capital you think you'd need, where you'd get financing, where you'd get supplies, what form of ERP you'd use, labor, facilities, etc. Work up a time line. And, most importantly, where you'd find customers. Please devote as much time to the process as I've given your seemingly facetious question. And post your plan here.
Just a (hopefully) "Wise Guy",
DELLish, 3. |
