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Why Amazon Can't Make A Kindle In the USA
Forbes ^ | 8/17/2011 | Steve Denning

Posted on 08/24/2011 10:45:19 AM PDT by Dick Holmes

How whole industries disappear

Take the story of Dell Computer [DELL] and its Taiwanese electronics manufacturer. The story is told in the brilliant book by Clayton Christensen, Jerome Grossman and Jason Hwang, The Innovator’s Prescription :

ASUSTeK started out making the simple circuit boards within a Dell computer. Then ASUSTeK came to Dell with an interesting value proposition: “We’ve been doing a good job making these little boards. Why don’t you let us make the motherboard for you? Circuit manufacturing isn’t your core competence anyway and we could do it for 20% less.”

Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. On successive occasions, ASUSTeK came back and took over the motherboard, the assembly of the computer, the management of the supply chain and the design of the computer. In each case Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. However, the next time ASUSTeK came back, it wasn’t to talk to Dell. It was to talk to Best Buy and other retailers to tell them that they could offer them their own brand or any brand PC for 20% lower cost. As The Innovator’s Prescription concludes:

Bingo. One company gone, another has taken its place. There’s no stupidity in the story. The managers in both companies did exactly what business school professors and the best management consultants would tell them to do—improve profitability by focus on on those activities that are profitable and by getting out of activities that are less profitable.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Philosophy
KEYWORDS: economy; jobs; management; mercantilism
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To: Dick Holmes

“So Dell, where do you see yourself in the economy in the next five years?”

Standard interview question these momo’s will ask everyone who wants a job there, and can’t answer it themselves.

If anyone thinks the desktop/laptop/notebook is going away anytime soon, they’re mistaken.

You are just going to see more special purpose computing in more places.


21 posted on 08/24/2011 11:10:55 AM PDT by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: sickoflibs

That’s not quite right if you are refering to ITAR? The ITAR regulations are for transfer of defence sensitive information. In the case of Dell, yes they were required to make a disclosure through channels, but once no defence sensitive information was determined to be included, out it goes.

So. To get back into the biz, one needs to come up with a way to pull 20% off ASUSTeK...

Figure that out, and YOU win.


22 posted on 08/24/2011 11:12:30 AM PDT by Freeport (The proper application of high explosives will remove all obstacles.)
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To: Ouderkirk

I do not agree about desktops. Developers and gamers need
to be able to replace the major subsystems (memory, video options, HDD) and need to support big memory hogging apps.

Try running MS Developer Studio or SoftImage on a tablet
and you will discover that workstations will be with us for the forseeable future.


23 posted on 08/24/2011 11:12:31 AM PDT by RitchieAprile (The Democrat Party is a continuing criminal enterprise..)
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To: Ouderkirk
HP not stupid? Coulda fooled me. They're dumping the tablet they launched a month ago.

Laptops are still what businesses use on the road. Besides, they had free advertising, all those HP logos on their stuff people use at the office and at home. And what about the volume discounts they get for buying huge amounts of components? Aren't they gonna miss that, whatever they choose to make?

24 posted on 08/24/2011 11:14:31 AM PDT by Dick Holmes
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To: Redleg Duke

I find that interesting. Back in 1976 I was fortunate enough to take a tour of the HP Factory that made Oscilloscopes. If I remember Correctly EVERYTHING to make an Oscilloscope was made by HP from the CRT’s to the Resistors and transistors.

And at the time HP test equipment was simply the very best you could buy.

Sometimes you have to look back and see that the beginnings of the end for a company occur when the Lawyers and Accountants run the Company instead of the Engineers who design and build the products the company is known for.


25 posted on 08/24/2011 11:15:05 AM PDT by The Working Man
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To: Ouderkirk

HP is not being stupid at all. Laptops and desktop computers will go the way of the VHS tape.

The new tablet stuff has rendered them obsolete and as the tablets become more powerful there will be no need for personal computers as we understand them, outside of core infrastructure.


Yes, but didn’t HP discontinue their tablet too?


26 posted on 08/24/2011 11:17:56 AM PDT by chaosagent (Remember, no matter how you slice it, forbidden fruit still tastes the sweetest!)
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To: Buckeye McFrog

meadow muffins


27 posted on 08/24/2011 11:26:57 AM PDT by petro45acp (NO good endeavour survives an excess of "adult supervision" (hence the American experiment))
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To: Free Vulcan

It’s hard to focus on the long term when you are a CEO that plans to pump up your stock options, cash out and move on in a couple of years to the next sucker.


28 posted on 08/24/2011 11:28:48 AM PDT by Dick Holmes
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To: Ouderkirk

I do CAD-CAM work here, no way a tablet can begin to do what is needed in that area. They may be fine for the social media and other simple input apps, but anyone who is serious about worker production in an office setting will always take a PC over any small tablet now.

The best of both worlds is having both, but workers will be far more productive in a non-virtual office setting with a dedicated workstation to input on, and also far easier to control sensitive data if you are working in that area also.


29 posted on 08/24/2011 11:31:31 AM PDT by Abathar (Proudly posting without reading the article carefully since 2004)
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To: The Working Man

Think also of HP calculators. They were the best and now they are gone.


30 posted on 08/24/2011 11:39:43 AM PDT by Citizen Tom Paine (An old sailor sends)
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To: Abathar; Ouderkirk

Well said Abathar, throw in the use of dual screens for CADD and tablet will never do. Screen size is also of importance for many applications.


31 posted on 08/24/2011 11:40:57 AM PDT by Ratman83
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To: Citizen Tom Paine

That is because they wanted to stop the reverse polish notation.


32 posted on 08/24/2011 11:42:38 AM PDT by Ratman83
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To: DonaldC
I’ve not used a tablet myself, but it seems more an entertainment curiosity to me. Maybe others can give some insights i don’t have.

I think you have it right. A lot of users just want to send email and surf the web. Tablets are good for that, very portable and very easy to use. In the past some users have had $1500 desktop machines and used them for surfing the web. That behavior is going away.

Power users won't be happy with tablets, but power users know enough to stay away from tablets for any serious work.

33 posted on 08/24/2011 11:46:32 AM PDT by ClearCase_guy (The USSR spent itself into bankruptcy and collapsed -- and aren't we on the same path now?)
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To: Graewoulf

The only thing that has destroyed more American businesses than union labor is American management.


34 posted on 08/24/2011 11:51:04 AM PDT by Last Dakotan
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To: Ouderkirk; Dick Holmes
Just Best Buy has OVER 150,000 HP tablets in stock. They have sold about 80,000. HP is lost in the tablet world.
35 posted on 08/24/2011 11:54:59 AM PDT by mad_as_he$$
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To: DonaldC; Ouderkirk
I’ve not used a tablet myself, but it seems more an entertainment curiosity to me. Maybe others can give some insights i don’t have.

Someone should invent a tablet with a fold down keyboard attached to it. That would be really useful, seems to me.
36 posted on 08/24/2011 11:55:55 AM PDT by youngidiot (Hear Hear!)
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To: Ouderkirk
The new tablet stuff has rendered them obsolete and as the tablets become more powerful there will be no need for personal computers as we understand them, outside of core infrastructure.

That is clearly wishful thinking. REAL, productive work cannot be accomplished on a tablet. Mighty handy for e-mail, PIM, and going surfing on YouTube... Maybe useful taking inventory, and might replace the written tickets waitresses use, but try and crunch accounting, creating graphics and imaging, running a spreadsheet, or even writing a novel on a tablet - It ain't gonna happen. There just isn't enough real estate on a tablet, not to mention power.

37 posted on 08/24/2011 11:57:39 AM PDT by roamer_1 (Globalism is just socialism in a business suit.)
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To: Abathar
I do CAD-CAM ...

As do I. Solidworks and Pro/E. No, they are not going to run on a tablet, but they are not tablet type of programs that you're going to run in an airport or in front of the TV are they? I have an "engineering laptop" so designated by my companies IT folks and it has Solidworks 2010 on it and a dual monitor adapter in the base for my desktop. I don't use Solidworks while travelling with this PC except to view files, nothing more. Can't work in the constraints of a laptop environment. Think of what the average person does with a laptop PC. Surf, email, maybe a report or basic presentation outline. Is away from your desk the optimum situation for creating great anything? Not for me at least. While my laptop stays in the bag until needed, the tablet (iPad2 specifically) is the device of choice for things other than work.

38 posted on 08/24/2011 12:04:18 PM PDT by Ouderkirk (Democrats...the party of Slavery, Segregation, Sodomy, and Sedition)
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To: Buckeye McFrog
Companies were not run like this for the first 200 yrs of our Republic until MBA programs started popping up like mushrooms.

Yes, and Bob Lutz of GM talks at length about this in his latest book. MBAs are typically very short term thinkers. What they are mostly concerned about is advancing their careers and building up their own personal wealth. And they have been damn good at it. But they have destroyed company after company. If the business professors at Harvard or Stanford (and all the other top MBA factories) really knew how to more effectively run companies they would be running these companies and making a lot more money.

I known quite a few MBAs over the years and I haven't met a single one who had any passion for product development, engineering excellence, innovation, or quality manufacturing. There are undeniably some but I haven't run across them.

The ascendancy of the MBA in American Business tracks perfectly with the economic decline of our manufacturing. There are a lot of other reasons and they are mostly concerned with governmental policies and perhaps they are probably greater factors than the MBA but in my opinion MBAs have been a huge negative in American Business.
39 posted on 08/24/2011 12:04:51 PM PDT by truthguy (Good intentions are not enough.)
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To: Last Dakotan

One thing that has destroyed more American businesses than union labor and American management combined is the US government and its regulations.


40 posted on 08/24/2011 12:18:31 PM PDT by Ratman83
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