Night Writer, I know a number of you guys are hurting now, and I don't want to throw salt in the wounds, but don't delude yourself. Compaq's problems cannot be fixed quickly or easily. It needs to jettison channels for corporate customers (not retail), and in so doing it will alienate current channel resellers. That means that it must look forward to at least a couple of quarters of decreasing market share as it attempts to reinvent its business. The reason CPQ got into trouble to begin with is that it didn't want to run the risk of causing a channel rebellion. So it tried to ease itself out of channels of distribution, but that approach didn't work. Compaq needs to go cold turkey. But frankly, I see no other way to deal with the problem.
But once that problem is fixed the company will see costs tumbling, and inventory levels dropping. It will no longer need to rely on factors for cash flow, and it will be in position to once again grow rapidly. The question is whether Rosen sees this, or continues to try to placate the channel.
TTFN,
CTC |
