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THE CASE OF THE PROFITLESS PC.
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- Author(s): Blackburn, Andy; Halprin, Matt; Veloria, Ruth
- Source:
Harvard Business Review. Nov/Dec98, Vol. 76 Issue 6, p28-32. 4p. 1 Color Photograph.- Subject Terms:
- Source:
- Additional Information
- Abstract: Is it possible to make money selling personal computers to consumers? And if so, how? What resources need to be mustered? Where should they be directed? Those are the questions facing the senior staff of Praxim, a multibillion-dollar maker of desktop computers, in this fictional case study. After years of strong profits, Praxim is being dragged down by increasing competition in the consumer segment of the PC market. In response, CEO Jack Thompson has hired a new manager for the consumer division, Linda Marcus, luring her away from a leading packaged-goods company. Linda wants to make Praxim into a trusted brand by putting Praxim's people into retail stores at peak selling times, setting up an 800 number to answer consumers' technical questions in plain English, and bundling extensively. But the other members of the senior staff are skeptical. The vice president of the commercial division argues that PCs are a commodity and urges Linda to concentrate on cutting costs. The chief technology officer wants Praxim to concentrate on developing the next killer app so that it can charge consumers a premium for new technology. The CFO thinks Praxim should cut its losses and mostly give up on the consumer segment. Mindful that continued losses in the consumer segment will pull down Praxim's share price and put his top executives' stock options at risk, Jack is at a loss. Should he try to make money selling PCs to consumers? Can he keep the doubters on his staff from defecting if he goes ahead with Linda's plan? Six commentators give Jack their advice. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright © Harvard Business Publishing. All Rights Reserved. This content is intended for individual research use only, subject to the following: Unless permission is expressly granted in a separate license, this content may NOT be used for classroom or teaching use, which includes teaching materials, electronic reserves, course packs or persistent linking from syllabi. Please consult your institution's librarian about the nature of relevant licenses held by your institution and the restrictions that may or may not apply.Unless permission is expressly granted in a separate license, this content may NOT be used in corporate training and/or as corporate learning materials. For corporate users, please consult the specific terms of your company's license(s) for complete information and restrictions. For more information and teaching resources from Harvard Business Publishing including Harvard Business School Cases, eLearning products, and business simulations please visit hbsp.harvard.edu. (Copyright applies to all Abstracts.)
- Abstract:
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