It's tough being #2...

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By emtwo
August 21, 2003

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Must be tough being Carly Fiorina...

So here's the deal.

You take this really big inefficiently run company, and you merge it with another really big, inefficiently run company, and give birth to a HUGE inefficiently run company.

So this merger made in HELL has the desired effect; it unseats the #1 computer company in the World...for 1 lousy quarter.

So now, your $19 Billion Dollar temper tantrum has left put you right back where you were; except now you are still #2, and $19 Billion dollars poorer.

So last quarter, you come up with a brilliant marketing strategy, Code Named "Destroy Dell at all Cost" and you start pricing your Consumer PC's at ridiculously low prices...but your plan backfires when component prices don't drop as quickly as you expected, and you go from a $21 Million gain in the second quarter, to a $54 Million Dollar loss in the third.

So putting on your brave face, you announce that you are already taking steps to put the consumer PC division back on track, and try and beat that "1 Profitable Quarter in a row" streak, by quietly raising prices on some of your PCs, most notably, your back to school special, which you bumped up $25 dollars.

So now, you are back on track to profitability, and everything is well in Palo Alto and then you get a kick in the teeth when you read the headlines the next day to find that your competitor, which is already kicking your butt in price and market share, announces huge price cuts across almost the entire line of their product range.

Best laid plans and all....

IMHO, HP's 3rd quarter was a disaster; 80% of it's profit was generated by one division...the other three bled money like a stuck pig...

I'm not sure they can compete any longer; with operating expenses twice of your rival, you need to spend less time trying to figure out how to beat him, and more time trying to figure out how to emulate him.

JMHO, of course...



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