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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (289)	9/21/1998 1:10:00 PM
From: jhg_in_kc	Read Replies (2) \| Respond to of 4691

The barrier to entry is dell's unique build to order, just in time manufacturing system, which is theoretcially replicable but for all practical intents and purposes too costly to replicate. Dell's profit margins will always be greater than its competition because it has no inventory, buys parts locally in whatever currency applies and so passes on any decline in component costs to the customer. THe only thing that concerns me about Dell is if businesses stop buying or replacing computers. I also wonder why Warren Buffett hasn't bought Dell. In time Dell's growth rate will slow as the company becomes bigger but I believe this is several years in the future. Its main competition, Compaq, is going to be losing market share to Dell, I believe. jhg