HP Eases Partner Sales in Attempt to Maintain Crown
HP Eases Partner Sales in Attempt to Maintain Crown by UCStrategies Staff
It is expected that before October draws to a close, Hewlett-Packard Co. will lose its crown as world's largest PC manufacturer. Lenovo Group Ltd. is currently in a statistical tie for distributing the most PCs globally, and analysts predict that it will overtake HP as primary incumbent in the fourth quarter.
However, HP continues to fade without a fight. Despite the gradual decline in PC sales as a result of the tablet market, HP launched a new program last week that eased the acquisition of Printer and Personal Systems Group by solution providers, thereby maintaining profitability.
HP seeks to make its computing products more affordable with its two-fold campaign, the “Discount for Value Pricing” (DVP) program. This will offer greater discounts to solution providers establishing net-new sales to HP, enabling price flexibility in competitive sales situations.
The DVP program is designed to protect investments in HP during the new business development process. Partners of HP will receive a custom-fitted price for that specific project, “providing … a competitive edge to win new business against competitors,” wrote vice president and general manager of U.S. channel sales, Scott Dunsire. DVP is set to reward partners for engaging HP early in the business process.
HP intends to push liquidity into the channel, and aims to remove a significant barrier to growth among many solution providers. This is to be achieved through extended financing terms with De Lage Landen Finance, GE Capital, Wells Fargo Capital Finance and IBM Global Financing. Several of these credit companies also seek to increase their purchasing power by providing select partners with extended credit terms.
HP is attempting to ease business terms and processes that can hinder partner execution in competitive situations through its DVP initiative. As the company comes under increasing pressure to position itself as a weightier competitor against rivals like Lenovo, Acer and Dell, it continues to struggle in regaining its footing from 2011's management problem. After a year of restructuring and repositioning, there still remain many questions regarding HP's viability.
Earlier in 2012, HP merged with Imaging and Printing Group (IPG) and Personal Systems Group (PSG) to create PPS. The PPS division remains an important part of the HP portfolio, even though PCs and printers don't provide the profits they once did. The plan now, is to develop a greater economy of scale by increasing purchasing and sales synergies.
In spite of the combination of restructuring efforts and the two divisions, HP is still struggling to keep hold of its PC market share. Furthermore, it seems that HP's once dominant and profit-machine printers are not productive any longer for HP or its channel partners. One of the ways HP is looking to regain its profits is by making it easier to do business with partners.
Dunsire writes, “HP remains committed to making it easier [for partners] to do business with us, and we will continue to look for ways to simplify our programs, improve your experience, and invest in the areas we believe will have the greatest impact on our partnership.” (CY) Link