BUSINESSWEEK ONLINE : JULY 26, 1999 ISSUE
COVER STORY

Rosen's Turnaround Plan


REORGANIZE OPERATIONS
To better understand customers, the company is being split into three divisions--PCs for consumers, PCs for businesses, and high-powered computers and services for big corporate customers.

RESTRUCTURE DISTRIBUTION
In an effort to reduce inventories in its distribution channels, Compaq in August will reduce the number of wholesalers it deals with from 40 to four.

TAP THE POWER OF E-BUSINESS
The company increased its spending for a new initiative--called Non Stop eBusiness--by $100 million. It hopes to sell lots of high-powered Digital and Tandem computers to Web sites.

SELL MORE COMPUTERS ONLINE
To boost online sales from less than 15%, Compaq is adopting a centralized system for handling E-commerce orders from customers and distribution partners. The idea is to match the efficiencies of direct-seller Dell Computer.

FIND A NEW CEO
The board's attempt to hire Continental Airlines President Gregory D. Brenneman was rebuffed. Now it's back to the drawing board. Rosen is looking for a high-powered executive, even one from outside the computer industry.



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