Compaq's strategy-->Once a hybrid always a hybrid and NO DELL
I guess we don't have to worry CPQ or anyone else 'emulating Dell' here,not HP,not IBM not the Cowguys.<g>
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On Compaq's 'new' strategy of cutting out most distributors in the U.S
<Courtesy:Austin American Statesman)
"..One analyst warned the move to streamline its distribution system carries risks for Compaq if it angers other distributors who once accounted for a significant amount of business.
"They are potentially going to alienate a number of partners that are going to be forced to deal with these . . . master distributors," said Robert Anastasi of Robertson Humphrey, an Atlanta securities firm....
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(Source:Technology Post-SCMP,Hong Kong)
Tuesday, May 11, 1999
BUSINESS
Compaq axes US retail outlets, but keeps China plan
CAROLYN ONG and AGENCIES
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Compaq Computer is slashing its US distributors from 40 to four to cut costs, better manage inventory and help move to a build-to-order manufacturing model similar to rival Dell.
In Greater China, however, Compaq will continue to sell its products through the traditional model of distributors and value-added re-sellers (VARs), local officials say.
The US move is chairman Ben Rosen's first big decision since the ousting of former chief executive Eckhard Pfeiffer.
Compaq Greater China marketing director Tony Leung said that in the region the company would continue to work with channel partners. It recently signed on a new distributor in Taiwan.
"The US is a whole different market and it requires a different model to be efficient. Here in Greater China, we will continue to be committed to our channel partners," Mr Leung said.
More than 80 per cent of Compaq's PC sales in the region are through VARs, who bundle them with peripherals or service packages, mostly for corporate clients.
Compaq US distribution partners were likely to be Ingram Micro, Tech Data, Merisel and CompuCom Systems, said US Bancorp Piper Jaffray analyst Ashok Kumar.
Compaq wants to thin its US distributors because of difficulties in controlling inventory, gauging demand and keeping costs down with dozens of sellers.
In exchange for giving a handful of companies more sales, Compaq is likely to seek better financial terms.
When a computer is sold through a distributor, the manufacturer often guarantees that if prices fall before the machine is sold, it will make up the difference.
That makes it difficult to compete with PC makers such as Dell which carry only days of inventory and do not have to offer price protection.
PC prices can fall by as much as 1 per cent a week. |
