Compaq Message Board - Msg: 12233596

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Technology Stocks : Compaq

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To: hlpinout who wrote (73470)	12/9/1999 9:33:00 AM
From: rupert1	Read Replies (1) of 97611

hi hio: PENDING ANNOUNCEMENT - given the link I posted and add to that the rumour "she" has been hearing in Houston of an imminent announcement of a radical change to the distribution system - I would expect that we will be hearing something soon. Not so long ago we were being told what a great idea it was for COMPAQ to divest itself of assembly and distribution logistics and work with Inacom and the other 3 (or 4) distributors. I will be interested in the rationale for what would appear to be at least a partial reversal. I suspect it will be along these lines: COMPAQ is caught between it's desire to enjoy some of the cost benefits and efficiences of selling direct including the "owning" of the customer, and the need to pacify distributors by giving them part of the gross margins and some of the quality control. Solution - work towards eliminating the distributors to own the distribution process. This initial acquisition will test the concept.

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