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How H-P Reclaimed Its PC Lead Over Dell Todd Bradley from PalmOne fighting on the wrong battlefieldof Channel Focus (ex: Store-exclusive notebo ration of PC demand: Desktops Notebooks nt buying/using behavior) needed to convince shoppers that retailer wa er channel choice Shift of H-P PC Position Focus User Focus puter is Personal Again”) tion Shift: More Pull More Push*

How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield” Shift of Channel Focus (ex: Store-exclusive

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Page 1: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

How H-P Reclaimed Its PC Lead Over Dell

I. Hiring Todd Bradley from PalmOne

II. “HP is fighting on the wrong battlefield” Shift of Channel Focus (ex: Store-exclusive notebook)

III. Migration of PC demand: Desktops Notebooks(different buying/using behavior)

IV. H-P needed to convince shoppers that retailer was the better channel choice Shift of H-P PC Positioning: Product Focus User Focus (“The Computer is Personal Again”)

V. Promotion Shift: More Pull More Push*

Page 2: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

1212 Two Promotional Strategies**Two Promotional Strategies**

Pull Strategy

Manufacturer

Channel members

Final users(consumer or industrial)

Final users(consumer or industrial)

Channel members

Manufacturer

Push Strategy

1*

2

3

*Numbers indicate sequence of flows

Promotion flowNegotiation flowProduct flow

1

2 3

Page 3: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Google Works on Launching Retail Stores (WSJ)

1. Copying Apple’s Playbook?

2. Does Google need retail stores? Why or Why not?

3. What would they sell there?

4. Microsoft Stores: How are they doing?

5. Google Unveils Chromebook Pixel Touch-Screen Laptop

Page 4: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Showdown in Silicon Valley

1. Apple versus Google

2. Apple’s Strategy

3. Google’s Strategy

4. Steve Job’s nightmare

5. Who do you think will win?

Page 5: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Samsung and Google (WSJ)

1. Samsung (Hardware) + Google (Software)

2. Samsung is becoming (too) strong?

3. Google’s Two Responses

4. Samsung’s Response

5. Key Takeaway

Page 6: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Dell’s Strategy for Growth*1. Current Market Portfolio

* Business Model

2. Advantages of Dell Model

1. Cost efficiency of direct model

2. Customization & Responsiveness

3. Focus on detail

3. Three-Step Growth Strategy*

4. New Frontier for Dell: Consumer Electronics

Page 7: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Dell’s Strategy for Growth5. Three Main Challenges for CE Market

1. No Customization and Less Responsiveness

2. Will People Buy CE Direct?

3. Dell’s Brand Equity for CE ProductMike George’s two comments

6. Playing the OEM game (back page)

- Who are customers? - Upside & Downside

- Response from resellers and small manufacturers

Page 8: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Dell’s Strategy for Growth7. Recent Performance (FT article in 2005)

1. Slowing growth2. “Now Dell is the market.”

3. Heavy Reliance on PC segment4. Slipping Price Advantage and Built-to-Order

System5. Competitors have caught up

6. Dilemma for Dell - Shoot low?

- Shoot high? - Is Dell Model Obsolete for Now?

Page 9: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Dell To Rely Less on Direct Sales (WSJ article in 2007)

• Dell’s Broad, Global Retail Push– Selling Dell PC through Wal-Mart

• Why Go to Retail?• What is happening to Its Direct

business model?• “The Direct model has been a

revolution, but it is not a religion.” - Michael Dell

Page 10: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Discounting Continues to Haunt Dell (WSJ article in 2010)

• Revenue is up, but profit is down. Why?– HP: Revenue is up and profit is also up

• Now no. 3 behind HP and Acer

• Share of total revenue from consumer market: 2003 (???) 2010 (???)

• Compete against “white box”

Page 11: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Move Over, Coke1. Key Challenges for small guys

2. Describe Bikoff’s Product Strategy

3. Describe Bikoff’s Marketing Strategy

4. Describe Bikoff’s Marketing Channel Strategy

1. Structure: types of stores, intensity, level

2. Management: support & relationship

* Positioning of vitaminwater

Page 12: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

After the Sale is Over1. Brand Ownership Change

2. What happened to existing distribution network of Vitaminwater?

3. What is the problem here?

4. How would you solve the problem?

5. Learning from the past: Snapple

Page 13: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

DVD versus VHS (Part 1)4. Buyer Behavior for a Movie DVD

1. When would you “buy” instead of “rent”?2. How much are you willing to pay to buy?3. When would you “rent” instead of “buy”?4. Where would you go to “buy” or “rent”?

5. “People can be conditioned to buy just about any movie they want to see if it is priced low enough.” Warner Home Video Chief

“If the studios keep dropping (DVD) prices, my margin would go through the roof, and customers would still rent” Blockbuster Video Chief

Whose view do you support?

Page 14: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

DVD Versus VHS (Part 1)1. A Quandary for marketing DVDs for Movie

Studios1. DVD Pricing Scheme

2. Rental-only period for DVDs?

2. Changes in Movie Pricing1. VHS Tape: two-tier pricing* & revenue sharing

2. DVD: one mass-market pricing ($14.99)

3. Marketing Channel Changes1. Customer Migration From Blockbuster to Wal-Mart

2. Who has more power over movie studios?

3. Power struggle between W-B and Blockbuster

4. Timing between rental and sale of movies: Different interests among movie studios (old versus new)

Page 15: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Ping Golf Club

1. Through what type of channel intermediary are Ping Clubs being sold?

2. What are key factors that drive Ping’s channel choice?

3. What is the intensity of their distribution?

4. How would you describe Ping’s channel

Relationship management?

Page 16: How H-P Reclaimed Its PC Lead Over Dell I.Hiring Todd Bradley from PalmOne II.“HP is fighting on the wrong battlefield”  Shift of Channel Focus (ex: Store-exclusive

Video Case: The Monster that Ate Hollywood

• Key Word: Evolution of Marketing Channel– Supply side factor, Demand side factor,

Technology changes

• Changes in Movie Studios

• Changes in Studios’ Competitive Strategy*– Movie Making Side– Revenue Model (Distribution and Exhibition)

• Changes due to alternative movie distribution channels: – Marketing Channels: – Products: – Markets: