SMEs under attack
PC World has set the cat among the pigeons with the aggressive unveiling of PC World Business’ target of achieving £400m turnover this year — with plans to do £1bn in three years.

It’s not as if this is something people haven’t seen coming. MicroScope reported in July last year that PC World Business was planning to use the consumer services resources of its parent, Dixon Stores Group, and the network of 85 PC World stores to underpin its attack on business users.

At the time, managing director Derek Lloyd focused on the large accounts aspect of the business, claiming it would be able to provide customers with a broader offering than traditional corporate resellers like Computacenter — and offer “comparable services at a lower cost”. Mike Norris, Computacenter CEO, retorted that corporate resellers had failed to address the consumer and SME sectors and it wasn’t likely to happen the other way around.

But whatever the corporate ambitions of PC World Business, it’s the SME side of things which is likely to have a much more immediate impact. How many vendors must have dreamed of the day when they could target the SME market through a nationwide uniform reseller chain offering a standard product set and service levels across different geographies in the UK?

Given that most vendors struggled to find and address the SME market a couple of years ago when the big push came to diversify away from a saturated corporate sector and aim for small businesses — and most of them weren’t even sure who sold into it — can you imagine how appealing the PC World Business proposition must sound to them?

The fact is that this is an historical problem, with the SME market and the companies which supply IT to it growing up in an ad hoc way often well out of sight of the mainstream computer vendors. No surprise then, that the vendors had such a difficult job putting SME strategies in place when the time came to turn their attentions to smaller customers.

What about the resellers?

The attraction of the PC World Business approach is that it promises to makes things simpler for most people in the supply chain: the vendor and the customer. Sadly, there’s one part of that chain which could suffer as a result, assuming it’s successful. And that’s the local reseller servicing small local businesses. None of them will have direct links to suppliers, so they are unlikely to be able to offer the same pricing available to PC World Business customers.

It doesn’t have to be all gloom. It is not pre-ordained that PC World Business will succeed, despite the attractions of its approach. First, it will have to demonstrate consistency of supply and service. In addition, it will need customers to make the perception leap required to take it on board as a credible business supplier, rather than consider it as just a consumer superstore chain. That’s not as easy as it sounds.

But it is possible.

If small local resellers fail on the services front, they will go under. If nothing else, PC World Business will drive an improvement in standards in those resellers and the service they give their customers.


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This was first published in March 2001

 

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