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PROS:
Perceived customization Convenience No sales pressure No price comparisons/objections
CONS
No immediate delivery No touch and feel
CONS:
No immediate delivery
CONS:
?
CONS
may not appeal to all segments
Supply Chain Management (SCM) Customer Relationship Management (CRM) E-service Demand Management
1: Indirect channel
(with e-efficiency; pooling of inventory, etc.)
PROS:
Current strength Ally with major retailers (CompUSA, Staples, etc.) Touch and feel; local service and support Many competitors withdrawing Declining market High costs Lack of customization (for customer; for channel) Will channel members cooperate?
CONS
2: Direct Model
PROS:
Overall market trend Lowest cost (commoditization of market; importance of price)
CONS:
Lack the core competencies (Lagger forever?) Loss of channel support? More competition in the direct model?
PROS:
Higher margin segments Leverage their strong service capability (through DEC) or their server/storage product line in corporate market
CONS:
not a product innovator integration problems Strong competitors
What resources and capabilities does Compaq have that it can leverage?
RESOURCES
High speed enterprise computing hardware Server and storage design, manufacturing, sales, and service Millions of users of Compaq products
CAPABILITIES
Fault tolerance Can handle large customers/ complex needs
LESSONS
Value of quantitative and qualitative analysis Value of customer relationships Value of market segmentation Dont rely on past successes Maturing of IT/PC market: special requirements A standard global model has several benefits
WHAT HAPPENED?
Compaq aimed at global leadership in internet infrastructure, access services, and solutions Acquired Inacom: to boost direct capabilities IBM> moving away from retail Hewlett Packard>early 2000; grabbed leadership in US retail market Dell has slowed down slightly; Compaq picked up
Hewlett Packard purchased Compaq ($19b); HWP, CPQ HPQ Dell continues to outperform others (2005)