Computer discount warehouse

Computer discount warehouse (CDW) is an investor's dream. Its stock price has almost tripled in less than a year, sales are growing at a 60% clip, and the company is positioned to take advantage of the introduction of Windows 95. CDW's secret? "We service the hell out of our customers and provide them with superior products and prices," says CEO Michael Krasny.

Since its inception in 1984, CDW has significantly expanded its product offerings to more than 20,000 SKUs. Among its merchandise line, which includes most popular computer products, laptop and notebook computer sales are growing the fastest - 116% last year over 1993, accounting for 23% of 1994's $413 million in net sales.

Although consumer demand has certainly helped increase sales in these categories, CDW's discount prices are likely to have boosted sales as well. Close proximity to several key distributors and online access to distributors' inventory databases enables CDW to minimize inventory levels, thereby reducing the company's overhead. The end result: Consumers pay less.

While competitive pricing remains key in CDW's marketing strategy, customer service has always been central to the marketer's growth. Each telephone salesperson goes through a four-week training program to receive instructions on computer products and sales techniques. Trainees then spend about two months in one of CDW's showrooms to gain hands-on experience about CDW's products and customer service. This year, the company plans to add another 100 telemarketers, upping its rep count to 240.

CDW's strategy has been reflected in the marketer's sales and earnings' growth rate. For instance, CDW's revenue increased 58.6% to $146.2 million in the quarter that ended June 30, over the same period last year. More impressively, net income jumped 78% to $4.3 million.

CDW's stock price reflects the performance. It's risen from a 52-week low of $19.25 to trade in the low $50s at press time. The stock price could pop further after the expected release of Microsoft's new Windows 95 operating system. CDW is expected to sell more Windows-based products and peripheral equipment to accommodate the additional memory this new system will need, says analyst Allyson Pooley at investment banking and brokerage firm. The Chicago Corp. "With CDW's product selections, the company is in a good position to take advantage of Windows 95."