Compaq has put the wind up its reseller base by announcing plans to shake up its channels and supply chains. Chief executive Eckhard Pfeiffer called a shock meeting this week to reassure key resellers, as the PC giant also announced sweeping price cuts.
Analysts at research company Dataquest say Compaq?s main objectives are to build and configure more equipment to order, and to implement electronic data interchange (EDI) links throughout its supply chains. The overall aim is to reduce inventory - also the prime motive for the price cuts.
The analysts praise Compaq for tackling a difficult issue - but they are hanging fire on whether the planned changes will be successful.
Dataquest believes that Dell now outpaces the industry in implementing effective supply chains, snatching the lead from fellow direct vendor Gateway 2000, and according to 'The Wall Street Journal', Compaq has been casting acquisitive eyes at Gateway - presumably lusting after its low inventory manufacturing and distribution processes.
US reports confirm that Compaq is trying desperately to calm its resellers. They fear being bypassed as Compaq deals directly with consumers - and if Compaq is serious about configuration to order and maintaining tighter inventories, it is difficult to see how resellers won?t be affected.
Waging war on a second front, Compaq announced some sweeping price cuts in the US, slashing 40 per cent off some models. It says it wants to maintain growing market share by lowering the cost of ownership. Similar reductions are expected in Europe.
The Deskpro 2000 fell by 18 per cent and an entry level model now comes in at $1,000; the 4000 and 6000 fell by up to 23 per cent, costing from $1,250. Both servers and workstations now include value pack options that cut the cost of storage.
The UK is planning similar cuts later this week, kicking off with cuts of three to nine per cent on the 133MHz Armada 1500 notebooks; 19 to 22 per cent on the Deskpro 2000.
James Griffiths, desktop product manager, said: ?The main reason for the cuts are to make the entry level systems a mainstream, affordable technology - costing #735 and #945 respectively.? He confirmed that new server discounts are to be announced soon.
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