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Politics : Formerly About Advanced Micro Devices
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To: DeplorableIrredeemableRedneck who wrote (75697)10/16/1999 7:21:00 AM
From: Bill Jackson  Read Replies (1) of 1572952
 
Darren, This is only partly true. In Japan for example thay have clung to an old model of distribution far longer than they rationally should have. This loyalty to the channel is more highly developed in Oriental mindsets and comes(I think) from a lack of true competition in their areas as shown by their tendency to want/and give exclusive distributorships in regions. The exclusive distributors then are free to maintain a high wholesale price in their area and all retailers buy from them. The first end run of this was the gray market for cameras. They found that if they priced their cameras at the same price all over the world then they would sell well in the USA, and parts of europe, but would be too costly for the average consumer in second world countries(third world...forget it). So they would sell the cameras for $200 wholesale in the USA and $140 in Argentina. It was not long before the boys at 14th(41?) street camera in NY found this out and then started buying big numbers in Argentina and importing them to NY. And the USA disty started to scream, and the camera maker tried to lean on the Argentinian wholesaler. The camera makers even tried the courts to stop the imports, and lost. Such strong loyalty to the channel is a liability, but the Orientals see it as an attribute that has strong cultural roots. Look at NEC and it's clones? Dead in the water, millions lost.
I stand by my comment, the Japanese companies will be the least flexible in the move to the direct model. One day they will eventually learn it and then they will do well with it, but will have to play catchup.

Bill
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