Dell

The Tuesday, March 30th edition of the Wall Street Journal reported an interesting story on Dell. The company has been lending money (including interest free deals on purchases of more than $25,000) to small business customers as a means of inducing sales.

I've never been able to figure out whether Dell's top management "gets it," i.e., whether they understand Chickens and Pigs. The company history reveals a history of phases. As some points, they seem to understand the importance of the Chicken customer (e.g., the subject of this blog). At other points in its history, management has been completely off the mark (e.g., the legendary "Stuart" period, marked by the glorious "Dude, you're getting a Dell!" ads.)

Two summary assessments stand out, though:

1. Management has struggled with separating the reality (the business has always relied upon the Chicken as its core customer) from the hype (expert opinion that the company's success was tied to its low cost position). I know of no company that has been so completely befuddled by outsiders who don't understand its goings-on.
2. The company is only now, with its 2009 purchase of Perot Systems, starting to come to grips with the deep problem underlying its decline: the fact that their 2010 value proposition is, essentially, the same one they offered in 2002. You can't win Chickens with a non-compelling value proposition.

In this light, the easy financing being offered to small business customers is little more than a stop-gap. Small businesses aren't the type of customer that really moves "the big iron." Dell's success depends upon winning $250 million contracts, not $250,000 deals.

Comments

[akku dell]

i like dell
thaks to share

[Miracle]

Holy cnocise data batman. Lol!