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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. However, the next time ASUSTeK came back, it wasn’t to talk to Dell.
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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.
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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. 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."ĭell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. Then ASUSTeK came to Dell with an interesting value proposition: "We’ve been doing a good job making these little boards. The story is told in the brilliant book by Clayton Christensen, Jerome Grossman and Jason Hwang, The Innovator's Prescription :ĪSUSTeK started out making the simple circuit boards within a Dell computer. Take the story of Dell Computer and its Taiwanese electronics manufacturer.