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

To: Geoff Nunn who wrote (83042)	12/1/1998 1:25:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Geoff, re: Here is what concerns me about Dell entering the e-commerce business. You quotes several sources that seem to confirm that Dell is in a capital rationing mode. I have no argument with you there, and you conclude that the reasoning behind Dell's investment decisions (or at least a serious consideration) is to maintain its core competency which you conclude is in computers. I disagree. Dell's core competency is in marketing. That was the genesis of the company, and all of its recent moves have been in support of marketing. The reason that Dell's approach is so phenomenal is that he has stripped the very expensive costs of providing hi-tech equipment (most notably R&D and inventory) out of the equation. An integral part of this effort is e-commerce, which, as MSD noted, has no variable cost component. So given what I believe to be Dell's core competency, I think that e-commerce is precisely where Dell will go, provided that its offerings continue to meet certain criteria. Among these are products that are easy to assemble and can utilize an efficient assembly system limiting inventory holding costs. Alternatively, Dell could just drop ship for other manufacturers and eliminate inventory problems altogether (as I believe it currently does for Sony). TTFN, CTC