Channeling HP - Hewlett Packard Dell Bests in Retail

I like to blame HP than most people so it is strange that now they are praising.

Back when I was on the other side of the exchange B2B technology, I was above all an HP customer. I came across with mini stores multiple different flavors of operating system HP (RTE, MPE, HPUX) and then had a deep love / hate relationship with the company. Still retains a number of HP executives in my virtual Rolodex and hound when necessary or advantageous.

For a long time it seemed that HP PC business of IBM was about to leave, that is "out the door." Sales were weak, and fat margins promised by the Compaq merger was not evident. HP went on tiptoe with Dell, the attempt to clone their success without ever approaching. Mass customization was not something that HP would have been good, and like all things inspired Carley, was heading for the sewer technology.

Two things happened at about the same time that changed fortunes HP PC. First, the market changed. Dell PC was king, when the mass customization was required by the market. Keep in mind that Dell grew during the period when PCs were fragile, the components were expensive, and the system built to order, consumers have permission to get what they wanted, without overspending. Michael Dell has seen the weakness of the market (incompatible system, store limited selection and high prices) and made a deal to eliminate the problems for the consumer.

But the market has changed, that HP and Dell have said no. First, the components became more standardized and the price of the components is dropped through the floor. My accounting system reports that I gave back $ 3,500 in 1998 for Dell desktop and loaded. Today, a degree of desktop server with a quad processor costs about $ 2,000 at CompUSA. This is mainly due to standardization, which kicked off a key differentiator from under Dell. Remove the need for mass customization, and remove the mass sales.

About the time this shift occurred in the market, HP installed Todd Bradley at the helm of its Personal Systems Group, which included oversight of the PC. Todd came from Palm, a good dress that had both direct sales and retail sales of consumer products. Todd realized that PCs are now well set for the average user, which means that most users do not need to compromise or many customization features. Consumers need competitive prices and immediate gratification, which may be due to a store. Shortly after the shelves of every store office supplies and computers were filled with HP hardware. The prices were low, competitive features rich, and you could take home today.

IBM has never seen this opportunity because IBM is IBM, and makes money by selling expensive equipment for businesses. Today HP is happily schizophrenic, the sale of businesses and consumer goods technology. It takes time, and it took to get consumer marketing as Bradley in the mix. Recent news shows play catch-up Dell and elbowing their way to retail shelves, unfortunately, from fishing on the lake bottom to sell through Wal * Mart ("Hey, honey, get me a package of 12 BVDs, some cartridges for shotgun, and a Dell Core Duo "). While not abandoning its direct sales model, have a little 'get to know resurrect a brand that suits retail sales and production to satisfy the perpetual feature / price squeezing of the PC market. I bet they do well, but HP now has the command and control Dell has an uphill battle ahead.

The marketing take-away is this: the changing markets, and complacency kills. Recognizing a change in your market, and act on this step is essential to stay alive. No market is static, neither are your competitors....