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

To: Chuzzlewit who wrote (66657)	9/22/1998 1:26:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 176387

Chuzz, I agree 100% that indirect channels will feel "slighted" should a manufacturer take thier products direct. I stated this and suggested ways to move around this issue. 1 Exclusivity 2 Incentives 3 Rebates 4 Co-marketing 5 Unique Product Lines (Direct vs. Indirect) Number 5 comletely gets around the issue. 1-4 make the channel partner more money and bring in more business. Remember, channels are in this for the $$$, the partnership is important but takes second seat. Also, if you're CPQ, or HWP you have industry clout which an indirect channel would love to leverage. So, assume CPQ goes to Circuit City and provides the following: 1 - Exlusivity - Circuit City is the ONLY authorized CPQ channel 2 - Increases their discounts to CC such that they are higher than competitors 3 - CPQ funds a large marketing campaign identifying CC as the channel 4 - CPQ increases rebates to consumers for buying at CC 5 - CPQ agress to not see the low end consumer models direct. So, you're telling me CC turns down the free marketing and exclusive rights to the CPQ machines? Well then the Good Guys or Comp USA or another competitor will gladly accept exclusivity. Sales channels LOVE nothing better than to have exclusive rights - especially to a product known as well as CPQ or perhaps HWP. In the meantime CPQ builds their domestic direct model - again this could be done via a discrete subsidiary and gets this perfected - selling only to businesses...or mainly to businesses. What do you think? OG

To: Chuzzlewit who wrote (66657)	9/22/1998 1:52:00 PM
From: stockman_scott	Read Replies (2) \| Respond to of 176387

CHUZZ: Thanks for the great analysis of the direct model and I agree that it is very difficult to duplicate it. Here are a few quotes from the latest Lehman Brothers report on DELL (dated 9/11/98): -"And while the indirect vendors have made progress to reduce inventory levels in an effort to increase competitiveness against the direct model, DELL's relative advantage remains wide. For example, in the best case scenario, indirect PC vendors will reduce channel inventory levels to 2-3 weeks and reduce inventory levels on their books to 2 weeks creating a total of 4-5 weeks of inventory in the combined pipeline. In contrast, DELL maintains inventory levels of 1 week yielding a 4-5 fold advantage over the indirect model." -"We believe DELL's share gains have recently accelerated as a result of indirect PC vendors inability to meet demand." -"The current environment characterized by rapidly falling component costs continues to disproportionately favor the company's direct business model." -"DELL remains the strongest positioned PC stock." -"DELL remains our favorite PC stock." ----------------------------------------------------------- Hmmmmm.....some of the analysts realize that DELL IS THE NEXT DELL !! -Scott