I agree that the battle is on the controlling the expense side because it's cutthroat on the revenue (i.e. product pricing) side. The big guys you mention do have the advantage of being able to squeeze their suppliers more than their smaller competitors. Indeed, companies like Home Depot, bypassed some distributors, who were once their suppliers, to deal directly with manufacturers in the Far East.
But, I hasten to point out, the companies you mention are not exactly manufacturers but retailers. Now, Dell is both, and it is doing all the things you say and has gained market share in a declining PC market. H-P/Compaq could, over time, adopt the same business model. Then, Dell would lose its edge and margins for all would drop. After all the consolidations, look at how few disk drive manufacturers there are compared to the past. They're losing money as well.