Jason; Sorry for the late response. Let me address your points:
< the precarious relationship between cpq and compusa. so how many sales will be lost if COPMUSA takes shelf space away from cpq in favor of their own store brand or another OEM (like IBM) >
Excellent point, but why not utilize channel inventory at COMPUSA. Good strategy suggest that the deal offered to Radio Shack should also be offered to all retailers. From a marketing perspective the <1K units might be directed to a specific market, i.e. students, etc. Marketing needs to turn this perceived negative into a plus. Innovation and out of the 'box' thinking is what we need here.
<Why would you want to invest in a company that is focused on gaining share in the first time consumer PC market which radioshack serves, i.e. sub 1000 market. this is going to continue to be a bloodbath.>
Another good point, however, I expect that CPQ will maintain and hopefully maintain their reputation for quality. Quality and reputation will lead to increased market share which should enhance EPS. Therefore, like many of us, when the 1st time user masters his <1K, he'll want an upgrade. A good retailer will keep a list of these first time users and contact them 6 months down the road for some suggestive or upgrade selling. Or maybe, CPQ should maintain this list for their BTO program. Someone used an example of a car earlier. Everyone upgrades his original purchase to his comfort point. The problem with PC makers is they are about to make an appliance out of the PC. If this happens, how many times do families replace their stove or microwave?
In summary, CPQ needs to innovate, ensure they never find themselves where the channel is stuffed, and finally demand world class service for their customer base, regardless of the model or price of the computer.
Mike Gordon |
