Cornered by the capitalist kings
- 03 May, 2000 12:49
The problem with America, they say, is that it's full of Americans. But the country itself is a beautiful place (in parts).
Now before you accuse me of unwarranted racial slurs, I believe we have a lot to learn from the world's capitalist kings. We might deride their fast consumer culture and apparent lack of hospitality, but they do know how to create stacks of wealth on the back of a good idea.
This zest to advance has created the status quo we live with each day as arguably the world's strongest economy sets the benchmark for our economic performance. And I can't see that changing in the foreseeable future.
Our page one report this week on the effects of the ever-weakening Australian dollar serves to illustrate the struggle channel companies live with every day in this environment. Sure, we choose our own destiny when it comes to creating businesses and seizing new opportunities, but watch out if you choose to rely on US imports.
When it comes to the channel, hardest hit again is the "little guy". That is, smaller resellers, distributors and PC assemblers that rely on components or products from the US.
As Philip Tran at Tech-Excel observes, small companies working to 30-or 60-day terms with low profit margins will continue to suffer because of our weak dollar, while dramatic falls against the US dollar make it hard for them to compete with larger competitors.
So what can you do? Hedging? Clever accounting? One of the most practical solutions could be to seek an alternative supply of components or products from Asia - or even better, locally - but changing your product supply midstream can be a real headache.
Let me know - how long can you hold out before our weak dollar causes real long-term damage to your business?
The channel is watching LAN Systems and its competitors with interest now in the wake of its acquisition by Datatec just before Easter.
Some feedback I've heard suggests life will not be so easy for the renamed Comstor (oh, and for the record I've been told twice Comstor is spelt without an "e") and its new partner-cum-competitor Westcon Australia.
Both Peter Williams, Westcon's MD and LAN Systems deny there will be any significant problems despite the fact they will compete with product lines such as CheckPoint. The two companies certainly won't be merging offices either, with both recently renewing their leases at locations either side of Sydney Harbour.
Meanwhile, Bruce Harvey remains upbeat about the new life for Comstor, commenting to me last week it will be "nice to be able to compete against good competition".
Which leads me to Express Data. Peter Masters, ED's national marketing manager, said he remains unruffled by Harvey's bold claims Comstor will challenge its position in the distribution hierarchy. "It's obviously a pretty interesting move, but it's not a move that will make a significant difference in the Australian marketplace."
Them's fighting words in my opinion. If our front page exclusive on Ingram Micro is any indication, the distribution battles we have become accustomed to appear set to intensify for the rest of 2000.