Stock bull, here is an excerpt from the article you posted, and this underscores the real danger to Compaq:
As manufacturers get into sales, dealers are getting into manufacturing. Several have set up large PC manufacturing operations and are looking for contracts from the big manufacturers. Ingram Micro Inc., a large distributor based in Santa Ana, Calif., has facilities to build 3.2 million PCs a year and is negotiating to build Prosignias for Compaq, says Ingram Vice President Doug Antone. Pinacor Inc., a Tempe, Ariz., dealer and distributor, has also set up PC assembly lines.
"I've challenged Compaq, IBM and HP to look at where we have capacity," says Robert G. O'Malley, president. If the big PC makers take too much away from dealers in sales, the dealers could turn around and use their manufacturing lines to make and sell their own machines. "That historically has not been our business," says Mr. O'Malley. But, he adds, "it doesn't mean we couldn't."
The article also quotes Dell executives in pointing out that Dell's business model is much more than direct sales and JIT manufacturing. It is also virtual integration. I think we will just have to see if Compaq can pull this off. My guess is that they will face too many problems coming from their previous channel members who are now asked to junk their investments in warehouses and who are now expected to become sales reps for Compaq.
TTFN,
CTC |
