Compaq plans a big change in its PC sales; made-to-order machine is expected to cut costs
Article Abstract:
Compaq plans to make radical changes to the manufacturing and distributing of its computers by building made-to-order computers. Compaq's strategy is aimed at reducing costs, and if it succeeds the company can cut the prices of its computers by as much as 15%. Under the new strategy, the world's largest PC maker will build computers only according to orders received, rather than making an estimated number of machines and sending them to dealers. Compaq hopes to compete with fast-growing PC makers such as Gateway 2000, Dell Computers and Micron Electronics, whose success is a result of their direct shipment strategy. For example Dell's revenues in 1996 reached $8 billion with a growth rate of about 46%, while Compaq grew at a rate of about 23%, with $18 billion in sales. In the most recent quarter Dell's revenues grew 57%, while Compaq's revenues grew only 14%. Compaq's new plans have generated concern among its dealers, because 99.6% of the company's sales are conducted through third parties.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
Compaq posts strong profit and says it will cut prices; still, some wanted more, and stock slips
Article Abstract:
Compaq has surpassed Wall Streets expectations of $1.39 a share increase for its second qtr and announced the first of many price cuts in its products. The company's net income was $214 million, a drop of 20% over 1996 second qtr earnings due to a the one time charge for the acquisition of Microcom. Aside from acquiring the networking hardware company, the company experienced a 58% rise in profits of $1.48 a share or $422 million. The company is reworking its operations so that it can make machines as the orders for them come in. The change over to a build-to order approach is part of an attempt to match the low prices of competitor Dell Computer. Dell has been growing at almost twice as fast a rate as Compaq.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Cirrus shares post a sharp 26% decline; net is not expected to meet forecasts. Cirrus Logic's poor outlook sends stock tumbling, clouds industry
- Abstracts: AT&T plan links Internet and satellites: 12-space craft system proposed to regulators
- Abstracts: Characterization and generation of a general class of resource-constrained project scheduling problems. Note: on semi-active timetabling in resource-constrained project scheduling
- Abstracts: How to focus a sales pitch in cyberspace. (the Hotwired online publication offers advertisers a way to focus their sales pitches) (Internet
- Abstracts: Settlement near in technical help-line suit. I.B.M. to lift output of hard disk drives for computers. The talk of cyberspace: is Iomega losing its zip?