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WebWord Weblog Posting Posting Date: November 06, 2002 Is Dell the new monopolist? (David Strom) -- "I think Dell has set the tone for 2002, and will continue to do so in the coming years. And they are like a Predator guided aircraft, homing in on excess profits all over the computer industry landscape." (Comments: Do monopolists neglect usability? The reason I ask is that it is "common knowledge" that monopolists tend not to innovate. By extension, this might imply that they tend not to care about usability.)
Reader Comments...
It depends on what the Monopolists invest its superprofits into... Apple used to be something of a monopolist long ago, but it put its money back into R&D geared towards usability and aesthetics. I think the ease for new entrants to get stuck in and compete is the main thing encouraging Monopolists to spend more on being user friendly (or at least to apply more profits towards spin doctors, FUD and BS experts to appear more usable etc). Posted by: Jimbo on November 6, 2002 10:41 PM
I wouldn't classify Dell as a monopolist; not by a long shot. Currently I see them as an agile company looking for a means to leverage their position to garner revenue outside their core business. From a positioning standpoint, I don't see them profiting greatly from this strategy but then again, GE has been profitable outside their core business for years. Just goes to show that for every rule there are exceptions. It is generally accepted that true monopolies do not innovate. Posted by: boysen on November 7, 2002 10:27 AM
aggressive, successful business model = monopolistic lazy, complaining, inefficient, slow business model = free enterprise system. Please instead of cutting down tall poppies, try running the business properly.
Customers are not stupid. They buy from Dell for a reason. Competitors should focus on why people buy from Dell and seek to provide products & services that are better, or different and meet other needs that Dell does not. Customers don't care about Dell's profits, or HP's or Gateway's. No single customer can act in a way that materially affects the supplier's profitability. Industry pundits should stop focusing on the suppliers and start focusing on the customer. Stock price is not an indicator of customer satisfaction. Posted by: mcw on November 8, 2002 09:14 AM
What creates a monopoly is barriers to entry, not a market share over 50% (or whatever). Dell's size does not create barriers to entry and the article does not give evidence that Dell is trying to manufacture barriers (as Microsoft is alleged to have done). The behaviour of Dell and Microsoft suggests they don't believe a secure monopoly position is possible in to-day's global market - neither company shows any signs of the complacency which nearly brought IBM down in the 1980s. Dell's rapid innovation in products and sales methods is made possible by the fact that it never sold in any other way and therefore is free from the turf wars and channel conflicts which bedevil the efforts of many established companies to market on-line. Posted by: philip chalmers on November 12, 2002 11:03 AM
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