>>>Is there any reason to believe the situation will change anytime soon?<<<
What's soon...tomorrow? Next week? Next month? Next Qtr.? The Qtr. after that? or longer?
I don't think we will hear it, but, I for one don't think Eric & Casey use the same method running a company...not that either is right or wrong.
If USR (Casey) did stuff the channel...he did it to the benefit of the USRX shareholders, which is where his responsibility was.
One must look at the root of the problem to gain a clearer picture of what is happening. It's in the extremely competitive nature of the business sector coupled with incredible rapid changes in technology, which requires new products at an accelerated pace to remain in the forefront.
USR saw what was coming and decided to pick their dancing partner rather than get picked. Remember ROK had just sold off a big chunk of their business and had big bucks on hand. CPQ had 5-7 billion dollars and the list goes on. I'm not saying either one of those companies were in the hunt for USR, what I'm trying to point out is USR knew the odds of survival weren't good unless major changes were made, NOW the same is true with 3Com, to remain competitive major changes are required, so they have taken bold steps to change their channel inventory model, NOT just USR inventory.
3Com is basically freeing up money sitting idle in inventory that can be used in a beneficial and profitable manner, such as R&D and other areas.
A business inventory model to look at is Dell's, where inventory coming in is going straight to the assembly line and the finished product is being shipped straight to the buyer, hence no inventory equals NO money tied up in it. I'm sure it's not absolute zero, but none the less extraordinarily efficient. It makes me wonder if Dell even owns a warehouse. But that is not the number one benefit of this model. Change is the biggest benefit...the ability to change product type, style, design, components etc., OR to just drop a product and introduce another to replace it.
The investors or should I say traders brought down the price of the stock and not management. Management is just making the adjustments and changes required to keep the company competitive, profitable and to assure it's survival.
This is too long winded...I quit.
Scrapps |
