Concerning Ingram:
Let me use a faulty analogy, and see how you like it:
Dell=Capitalism (the most effecient method)
Ingram (manufacturing for IBM, CPQ, etc.)= European Socialism
All manufacturers selling into the channel= Communism
I guess it is somewhat more effecient to go from Communism to European Socialism (I'm talking Austria, 1980's here), but eventually capitalism wins out.....
The problems I see for IBM, CPQ, etc with using Ingram are many:
1) Loss of quality control
2) Replacing one excessive (channel) configuration with another (albeit a somewhat more effecient one)
3) Weakening of brand
4) Potential creation of future competition
A neutral: Inventory management (I guess it could get better, but this arrangement might make it worse)...
Positive: Slightly better profit margins...but that make up for 1-4?
Pt. 4 could be quite interesting....Although Ingram downplays the possibility that they will want to go solo one day, wouldn't it make sense (if you were running Ingram) that you would perfect your quality control, build your capacity, etc. on someone else's dime.... until which time you could go it alone and produce computers under the Ingram label...after all, they are leaving a lot of money on the table by slapping IBM, CPQ on these boxes and selling the computers as such...What a horrendous consequence for IBM and CPQ if, years from now, Ingram would decide (after IBM and CPQ had- for years -not expanded manufacturing/assembly capabilities and "unlearned" the process) to go it alone....OK, realistically CPQ and IBM would find another "white box" manufacture and/or the transition would be over a longer period of time......but, getting back to the analogy of European Socialism vs. Capitalism......The CPQ's guy comment struck me as odd, that a indirect/direct mix is the/a way to go.........Well, the thousand cuts just became 500, but you are bleeding nonetheless......
Finally, as Gateway and Micron have proven, the key is not just being B-T-O, J-I-T, it is also about execution.....It remains to be seen if Ingram can execute day-in, day-out as well as Dell has.....time will tell.........
I would love to be the Dell sales rep that gets to tell the customer:
You know both my rivals' computers are manufactured by the same third-party....Ouch!
Rudedog....come bite on this one! |
