PROJECT REPORT

ON

A COMPARATIVE STUDY BETWEEN LAPTOP SALES

AND MARKETING OF HCL AND HEWLETT PACKARD

(HP) LAPTOPS IN INDIA

ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly contributed

in the development of this work and who influenced my thinking, behavior, and acts

during the course of study. I express my sincere gratitude to Ansal Institute of

Technology and Guru Gobind Singh Indraprashta University for providing me with an

opportunity to undergo summer training. I am thankful to Mrs. Geetanjali Singh for her

support, cooperation, and motivation provided to me during the training for constant

inspiration, presence and blessings. Lastly, I would like to thank my Parents for their

moral support and my friends with whom I share my day-to-day experience and receive

lots of suggestions that improve my quality of work.

Anirudh Singh

List of Content:

Sl. No. Particulars

1. Synopsis

2. The Theory Of Channel Sales

2.A The ABCs Of Channel Sales

2.B Hybrid Models

2.C Managing Relationships

2.D New Products, Models And Markets

2.E The Shortest Distance

3. Hewlett Packard India (HP)

3.A About The Company

3.B Product Legacy Of HP

3.C HP Compaq Laptops - Knowledge Management On Product Processes

3.D Strategy

4. Hindustan Computers Limited (HCL)

4.A About The Company

4.B The HCL Family

4.C Who do we look for?

4.D Why HCL?

4.E Enjoy your day, everyday, at HCL

5. Research Methodology

6. Unique Selling Points Of Hcl And Hp Laptops

7. SALES AND DISTRIBUTION

8. CONCLUSION

1. SYNOPSIS

Technology is the only dependent factor for mankind in this century and it runs faster like

a thought. From a macro environment, it has created a micro environment and promises

to make us more handicap without it, even for a fraction of a second.

Objective of our paper is to identify the competitive difference between Laptops of two

companies. One is an Indian home-grown entity and the other one is an international and

well-known and established brand within India. They had an old partnership and today

they offer different product ranges to the Indian consumer.

Each carry strong brand value plus great selling proposition to lure its customers and

we compare how.

PRODUCTS TO COMPARE

Notebooks (laptop PCs)

HP Pavilion notebook PCs,

Compaq Presario notebook PCs,

Business notebook PCs

HCL Laptop

2. THE THEORY OF CHANNEL SALES – POINT OF

DIFFERENTIATION BETWEEN A CHANNEL SALES AND DIRECT

SALES

A straight line, conventional wisdom says, is the shortest distance between two

points. As a result, conventional wisdom also suggests that the most efficient

way to deliver products to customers is to cut out the middleman. But

conventional wisdom isn't always right. A direct path from information technology

(IT) vendors to end users, for example, is not necessarily the most efficient or

effective way to reach customers, something scores of vendors have already

discovered.

In fact, two-thirds of all computer and peripheral sales go through indirect

distribution channels, according to Raymond James & Associates. While IT

vendors have often tested the direct-selling waters, many have discovered that

the channel (Understanding The Channel) allows them to concentrate on their

core competencies, such as research and design, brand management and

demand creation, while distributors handle tasks like logistics and credit, and

resellers configure complex multivendor solutions and manage intimate end-

customer relationships.

Apple, IBM and Toshiba are good examples of vendors that know the value of

the channel and, according to recent figures from The NPD Group, a research

firm that tracks sales through distribution, are vendors whose recent channel

sales have shown significant increases (Dec. 02 over Dec. 01). Even vendors

that emphasize direct sales for personal computer products have continued to

rely on the channel to get peripherals, enterprise products and networking gear

to their customers.

Why take an indirect path to market? Surprisingly, the most obvious reason is

cost. Cutting out the middlemen sounds like a good idea, in theory. But few

technology products stand on their own; most require services like integration,

inventory supply, financing, accounting, IT support and training. Distributors and

the reselling channel are all about reducing the costs associated with providing

these services. While people generally think middlemen generate more costs

than a direct supply chain, the opposite is usually true.

2.A The ABCs Of Channel Sales

One way to get to the true cost of direct vs. indirect sales is to do an "activity

based costing" (ABC) analysis [Steve Raymund Perspective]. When vendors use

an ABC analysis to do a thorough and detailed examination of the specific costs

of the many different activities associated with selling a product, they often

discover that direct sales cost them as much or significantly more than channel

sales. Direct sales are full of unrealized and sometimes hidden expenses, from

the salaries and overhead of maintaining a sales force to the costs of the

systems needed to deliver products with the accuracy and efficiency

contemporary customers have come to expect.

Vendors have nothing to lose and everything to gain with an ABC analysis.

Establishing a detailed set of metrics that capture every conceivable cost,

internal and external, gives vendors a true profit picture. In the words of a recent

CFO magazine article: "ABC can help companies figure out ways to raise profits

without raising prices."

2.B HYBRID MODELS

An ABC analysis of the actual cost of what it takes to get specific products to

specific customers can reveal that it's cost-effective to reach some customers

directly but others via the channel, all within the same vendor's go-to-market

strategy.

IBM's Personal Computer Division, for example, has implemented such a hybrid

distribution strategy to allow customers a choice. Many customers want different

channels according to particular products and situations: The key for IBM is to

manage each route to market - whether direct or indirect - for profitability. In its

own analysis of channel vs. direct strategies, IBM has discovered that direct

sales may offer higher gross margins, but those margins are typically offset by

the many expenses required to support the direct sales effort.

HP has one of the most talked-about - and most often misunderstood - hybrid

strategies in the IT arena today. When HP launched its Hard Deck program in

2001, and later its Partner One sales program in November 2002, the media

treated the announcements as if HP were abandoning the channel community

entirely. With Partner One, even though the program had other attributes besides

a direct-selling option, HP's channel partners feared the computer giant would

shift a significant amount of its products from indirect to direct channels.

In reality, these hybrid strategies have had a limited effect on direct sales. Under

the more recent Partner One, for example, the percentage of HP's U.S. direct

commercial sales rose only a single point in the first quarter of FY 2003, and the

Palo Alto, Calif., technology giant continues to drive a significant portion of its

worldwide sales through its partners. "Two-thirds of our business comes as a

direct result of our partnership and our collaboration with you," said Carly Fiorina,

HP chairman and CEO, to a gathering of channel partners at the HP Americas

Partnership conference in February 2003. In some product categories, HP is

especially dependent on the channel - more than 95 percent of its printer sales,

for example, go through channel partners.

2.C MANAGING RELATIONSHIPS

Although there are times when it may make sense for vendors to work directly

with a handful of major end-user customers, managing relationships with the

thousands of other businesses and consumers who use their products is an

almost impossible challenge. One of the biggest values distributors offer is that

they save vendors from the headaches of thousands upon thousands of

individual relationships, transactions, electronic linkages and telephone calls they

would otherwise have to handle on their own.

Thanks to distributors, vendors only need to manage a handful of relationships to

move their wares to end-user businesses and consumers worldwide. Distribution

lets them run lean and mean, eliminating many of the resources they would

otherwise need in place to reach and manage those many thousands of annual

sales transactions on their own.

2.D NEW PRODUCTS, MODELS AND MARKETS

Another reason mega-vendors like HP and IBM continue to depend on the

channel is that it allows them to reach into small business markets with new

products and technologies. Each small-to-medium business (SMB) customer has

individual needs that have to be addressed, making it virtually impossible for IT

vendors to achieve economies of scale servicing these customers, especially

when the customers need solutions, not just boxes.

For most, the only smart way to reach into the SMB market - with its requirement

for multi-vendor IT solutions - is to partner with the channel, using its thousands

of value-added resellers as an extension of the vendors' own sales forces. And

the best way to reach those thousands of resellers is through the distributors that

serve them, supplying them with the multitude of products they need to create

varied and individual multi-vendor solutions for their clients and providing them

the financing vehicles and support they need to get the job done.

The same holds true in the mid-market space. Most mid-market solutions consist

of complex, multi-vendor designs. While one configuration may work, two or

three other configurations, platforms or combinations of products may work

better, and it often takes the expertise of a vendor-neutral, multi-vendor-

experienced distributor to assist resellers in choosing the right course and the

right combination of products for their end customers.

Today, for the same reasons many traditional vendors have used the channel to

take products and services to market, vendors such as Sprint and T-mobile are

embracing distribution and the channel to drive greater sales in completely new

technology markets. Vendors use distributors to pass sales strategies and

positioning tips to their resellers, who in turn match the developing technologies

to the specific needs of their individual customers.

And vendors - traditional or otherwise - can use the channel to develop brand-

new go-to-market strategies with existing partners. For example, under its Open

Value program, Microsoft uses distribution to manage transactions for software

licenses. With distributors tracking the licensing sales, resellers get commissions

without the associated reporting headaches, leaving the resellers free to manage

their long-term end-user relationships. Cisco Systems is another beacon of

creativity, having developed a similar channel delivery mechanism for its

warranty programs.

In the mid-market arena, where end customers may have their own in-house IT

staff, the channel still plays an important role. Distributors and VARs work

together to plan implementations, troubleshoot problems and design future

upgrades that will allow the end customer to grow uninterrupted.

Service and support where you need it, when you need it, and how you need it is

a significant reason the channel has evolved and flourished as a technology

delivery system that addresses real-world problems with multi-vendor solutions,

overcoming obstacles that fall back on the vendors' shoulders in a strictly direct-

selling model.

2.E THE SHORTEST DISTANCE

So, in addition to being the most effective way to reach many customers, the

channel in many cases is also the most efficient. As it has evolved through the

decades, the channel has trained customers to expect world-class logistics

support via experienced distribution powerhouses with national and international

warehouse networks capable of handling significant daily orders from major

customers and scores of individual orders from smaller customers. It's a system

that's difficult, if not impossible, for individual vendors to cost-effectively

duplicate. As a result, vendors have discovered that, for many customer

relationships, the channel really is the shortest distance between two points.

The new HP in India is the first entity across Asia to integrate the channel

policies of erstwhile HP and Compaq. In this new channel policy, the new HP’s

Indian entity has integrated the two sets of channel policies including credit

terms, cash discounts, stock price protection and inventory management. It has

got a two tier channel program that measures the ‘sale outs’ (sales from channel

partners to end customers).

The company has also put in place, regular auditing of all channel programs by

an external auditing agency, which wasn’t the case for Compaq. Besides this, a

new CRM function has also been introduced to look after the interests of the

channel partners. HP has also allotted user IDs and passwords to Compaq

channel partners to monitor their performance online, the same way as HP

channel partners have been doing so far.

Rajendra Kumar, Executive VP, HCL Infosystems

"Our market is so competitive that there can't be a major difference in prices"

HCL has been around for more than 30 years and have developed a huge sales

and support infrastructure. It has been very strong on the logistics front, in terms

of delivery and distribution. HCL has got an immensely proved turn around time,

challenging Dell. Customers can send enquiries to HCL stores through our

website. Due to the complex tax structure in the country, it is difficult to

implement a direct model. There are states where VAT is not applicable, while

some have Octroi. It is still early days for online shopping. Customers want to

touch and feel the products. They may go online to seek information, but prefer

to go to a store to buy. Even if 3,000 customers buy online, it is not something

that would make one sit up and take notice. Why would anyone buy direct when

he can get the same price from a partner?

o Sales Management

Sales structure

HP

Business Unit

1. Technology Solutions Group (TSG) 3. Personal Systems Group (PSG)

2. Imaging and Printing Group (IPG)

To simplify the company and bring its sales force closer to customers, HP will

dissolve the Customer Solutions Group (CSG) - a standalone business group

responsible for sales to enterprise, small and medium-size businesses and

public-sector customers. It will merge the sales function and related

accountability directly into three individual business units - Technology Solutions

Group (TSG), Imaging and Printing Group (IPG) and Personal Systems Group

(PSG). This will give each business unit greater financial and operational control

of its business.

HP has a wide range of global operations happening from India. Over three-

quarters of its 29,000 staff (including contract staff) work on services for HP

worldwide and its customers

3. HEWLETT PACKARD INDIA (HP)

3.A About the Company:

The Hewlett-Packard Company (NYSE: HPQ), commonly referred to as HP, is an

American information technology corporation, specializing in personal computers,

notebook computers, servers, network management software, printers, digital

cameras, and calculators, among other technology related products.

Headquartered in Palo Alto, California, United States, HP has a global presence

in the fields of computing, printing, and digital imaging, and also provides

software and services. The company, which once catered primarily to

engineering and medical markets—a line of business it spun off as Agilent

Technologies in 1999—now markets to households and small business products

such as printers, cameras and ink cartridges found in grocery and department

stores.

HP posted US $91.7 billion in annual revenue in 2006 compared to US$91.4

billion for IBM, making it the world's largest technology vendor in terms of sales.

In 2007 the revenue was $104 billion, making HP the first IT company in history

to report revenues exceeding $100 billion.

HP is the largest worldwide seller of personal computers, according to market

research firms Gartner and IDC reported in October 2006; HP holds a near 3.5%

market share lead.

HP has a successful line of printers, scanners, digital cameras, calculators,

PDAs, servers, workstations, and home-small business computers, many of the

latter were acquired during the 2002 merger with Compaq. HP today promotes

itself as not just being a hardware and software company, but also one that offers

a full range of services to architect, implement and support today's IT

infrastructure.

HP has three business segments: Enterprise Storage and Servers (ESS), HP

Services (HPS), and HP Software are structured beneath the broader

Technology Solutions Group (TSG).

3.B PRODUCT LEGACY OF HP

Agilent Technologies holds the direct product legacy for all HP original company

products founded in 1939. Agilent's current portfolios of electronic instruments

are descended from HP's very earliest products. HP entered the computer

business only after its instrumentation competencies were well-established.

After the acquisition of Compaq in 2002, HP has maintained the "Compaq

Presario" brand on low-end home desktops and laptops, the "HP Compaq" brand

on business desktops and laptops, and the "HP ProLiant" brand on Intel-

architecture servers. (The "HP Pavilion" brand is used on home entertainment

laptops and all home desktops.)

3.C HP COMPAQ LAPTOPS - KNOWLEDGE MANAGEMENT ON PRODUCT

PROCESSES

HP's Product Processes Organization (PPO) is a corporate group with the

mission of advancing product development and introduction. It includes such

diverse functions as Corporate Quality, Procurement, Product Marketing, Safety

and Environmental, and Organizational Change. The Product Generation

Information Systems (PGIS) group serves each of these functions. Bill Kay, the

PPO director, put PGIS at the center of the PPO organization chart because he

felt that information management needed to become a core competence of PPO.

The PPO knowledge management group is currently working on three projects.

One involves competitor information for HP's Components group. The goal of the

second project is to create a Web-based interface to primary and secondary

research information. The third system manages international marketing

intelligence.

3.D STRATEGY

Strategically, both the brands have adopted similar techniques. The threat of new

entrant has been absorbed by co-branding and selling or offering distribution

network strength.

    

These employees span a range of divisions and subsidiaries, whose names

change rather often, but which have grown consistently. GDIC, once Digital

GlobalSoft, became the Global Delivery Application Services Center, headed by

P Venkatachalam and G Padmanabhan, the flagship application services center

in HPs global network. HP Global eBusiness delivers finance, accounting, HR

and other business processes for HP and its worldwide customers, with 6,500

employees in four centers in Bangalore and Chennai. HP ISO became the

Systems Technology & Software Division, led by V Subrahmanyam, focusing on

R&D for software products. And a Hub Software/Firmware and Solutions Lab, led

by Sandy Lieske, develops software and firmware for printers and MFDs (HP-

ISO used to do this earlier).

       

Then there’s the team led by Frederick Ravikumar which sources and supplies

parts and services to HP in 10 countries. The Global Competency Centre,

Bangalore, led by Paul Van Ingen, provides tech support for a range of products,

Company Hierarchy structure

including and also software, networks, etc. The Global Solution Center,

Bangalore, headed by Jesudas Andrade, provides helpdesk and other technical

services for enterprise customers. Infrastructure Technology Operations, led by

MS Prakash, provides remote infrastructure and service desk services to over

140 customers across the world. And IPG Consumer Contact Center, led by

Ramesh Giri, supports global print and imaging customers. And HP Labs India

(led by Ajay Gupta) addresses emerging markets for ICT.

4. HINDUSTAN COMPUTERS LIMITED (HCL)

4.A About the Company:

Hindustan Computers Limited, also known as HCL Enterprise, is one of India's

largest electronics, computing and information Technology Company. Based in

Noida, near Delhi, the company comprises two publicly listed Indian companies,

HCL Technologies and HCL Infosystems.

HCL was founded in 1976 by Shiv Nadar, Ajai Chowdhry and four of their

colleagues. HCL was focused on addressing the IT hardware market in India for

the first two decades of its existence with some sporadic activity in the global

market.

In 1981, HCL seeded a company focused on addressing the computer training

industry, NIIT, though it has currently divested its stake in the company. In 1991,

HP took minority stake in the company (26%) and the company was known as

HCL HP for the five years of the joint venture. On termination of the joint venture

in 1996, HCL became an enterprise which comprises HCL Technologies (to

address the global IT services market) and HCL Infosystems (to address the

Indian and APAC IT hardware market). HCL has since then operated as a

holding company.

HCL is a leading global Technology and IT Enterprise with annual revenues of

US$ 4.7 billion. The HCL Enterprise comprises two companies listed in India,

HCL Technologies (www.hcltech.com) and HCL Infosystems

(www.hclinfosystems.in)

The 3 decade old enterprise, founded in 1976, is one of India's original IT garage

start ups. Its range of offerings span R&D and Technology Services, Enterprise

and Applications Consulting, Remote Infrastructure Management, BPO services,

IT Hardware, Systems Integration and Distribution of Technology and Telecom

products in India. The HCL team comprises 53,000 professionals of diverse

nationalities, operating across 18 countries including 360 points of presence in

India. HCL has global partnerships with several leading Fortune 1000 firms,

including several IT and Technology majors.

4.B The HCL Family

At HCL, people are not just employees but family. So, like an important member

of the family should, you get endless freedom to experiment, unlimited

empowerment to execute your dreams and the rare opportunity to be an

entrepreneur.

HCL Infosystems is the progenitor of the HCL Group and is known as the

‘Entrepreneurial Incubator’ in the Indian IT industry. We believe in empowering

people to help achieve their goals – goals that are achieved by the coming

together of talent and innovation, powered by ownership and freedom to

experiment, leading to tremendous growth and gains for the individual and the

organisation. We pride ourselves in being a pioneer in creating the Indian IT

Industry, by pioneering the creation of the people for the industry.

Our HR philosophy is “beyond HR Practices and Systems”, where we are

ceaselessly creating the ‘HCL Family’, whose DNA is Pride, Passion,

Performance and People, with an inexhaustible Spirit of Entrepreneurship.

4.C Who do we look for?

Our objective has always been to acquire quality people and groom them to

become entrepreneurial Leaders. HCLites are people who take pride in

continually doing better than their best; people with a passion to succeed; people

who have a fire within to perform and realize results….People who want to ‘WIN’

(W –Work hard, I- innovate and N-never giver up).

4.D Why HCL?

Ranked Top 3 Best Employer Survey in IDC-DQ Survey 2006

Ranked Best Employer in IDC-DQ Survey 2005

We are one of the few IT companies in India that provide a lifetime

comprehensive career plan. At HCL, we look at the strengths of a person and

accordingly assign future job roles to match those. People can chart their own

career options of Entrepreneur or Manager or Technocrat. HCL provides an open

canvas of opportunities for each individual, which is how 90% of our top

management is from campus (people who joined us as trainees straight from

campus).

Be an Intrapreneur - An organisation with a large number of recruitments

from campuses all across India, creating entrepreneurs from and for HCL.

Endless growth opportunities in an open and entrepreneurial environment

where your team mates and manager become your best friends.

A company where the diversity of 360+ locations, languages and cultures

blend seamlessly into a challenging work ethos of the HCL Culture that

fosters excellence, recognising and rewarding performance.

A career with diverse, rewarding & challenging assignments everyday...with the

freedom to create, articulate new ideas, collaborate with the sharpest minds and

truly realise your potential.

Learn

HCL training facility in the city of Hyderabad is spread over a sprawling 16

acres with

residential facility to accommodate 165

employees at the same time in training.

Equipped with class rooms, labs, canteen, a

recreation centre and dedicated faculty with

vast experience in the IT industry, we

conduct over 25000 man days of internal classroom training every year.

Classroom trainings are further complimented through Enable Leadership

Enrichment and Development - which provides a comprehensive

automated learning tool to each employee through various online learning

options.

360 Degree Feedback for a holistic quality improvement and individual

development plans.

Learn from Leaders who have a three decade rich history of inventions

and innovations.

 

Grow

‘iPerform’, our online Performance

Management System tracks result achieved

through daily to weekly to monthly to quarterly

review system for Career Planning and

Position planning.

Mindia TechXperts, a fast-track career growth programme identifies and

groom young engineers for leadership positions in a short period of 18

months.

We continue to promote Indian traditions and recognize talent in diverse

areas, through he much acclaimed HCL Concert Series - a tribute to

excellence in human endeavor.

80% of our top management today are people who joined straight from

campus.

 

Own

Pioneer in IT industry for ESOP started in 80’s.

Profit Sharing Scheme since 1997 for all

employees.

‘HCL One Quarterly Awards’ Night is a gala

celebration every quarter when the HCL family gets together to celebrate

achievements of individual and team performances.

Bottom up communication channels providing opportunities for employee

opinion.

HCL Towers - Houses for our employees.

 

4.E Enjoy your day, everyday, at HCL

A dynamic, fast paced and flexible work environment that nurtures relationships and

constantly celebrates our people's happiness, hobbies, achievements, festivities....... At

HCL, we make everyday work an enjoyable and fun experience

HCL Concert Series

Extending the exclusive

blend of creativity and

excellence from IT to the

world of music and dance,

The HCL Concert Series

is a tribute to excellence

in human endeavor. Every

month you are invited to

enjoy four evenings of

soul satisfying music or

enrapturing dance

performance by some of

the best artists in India

Sporting

Champions

Cricket, Squash or

Golf - you can find

them all here in HCL

– Our intra-

organisation and

inter- organisation

competitions ensure

that even the

workaholics are

involved in playing or

cheering at least.

Table tennis in office

everyday makes not

only the class

players pursue their

interests, but also

helps the amateurs

take a break.

Celebrating Festivities

Celebrations, frolic,

carousing, quizzing are all

ingrained in HCL. Be it a

festival or commemorating

one of us or applauding a

team - we do it with a bang -

paint the town red. We make

Diwali brighter than the lights

with stalls, music, antakshiri,

dance, mimicry - name it and

we have it.

Our Christmas is warmer

than Christmas puddings with

Santa Claus, Xmas trees for

all teams and lots of tinsel.

Holi or Pongal or

Rakshabandhan, all are a

way to celebrate our "unity in

diversity".

Innovate at HCL

Innovation is promoted in every part of the

organization and the results are seen in

HCL One Awards

To commend the achievements of

our people, we raise a toast to the

Picnics and more at hcl

We as a family go to trips, outings, picnics,

movies, river rafting - move away from the work

the various examples of innovations that

have come from our own employees. Give

wings to your ideas with our unique

innovate@hcl.in

achievers and have a frolicking

party every quarter.

Win the Glittering Trophy, Blue

parties.Diamond, or an Acrylic

Star for your performance. These

rejoicing, reveling moments are

not to be missed

environment, from the city towards nature - in

the lush green environment to rekindle and

refresh our spirit. These adventurous trips help

us strengthen our camaraderie

We carry on with the comparative study of the two brands operational in today’s

market scenario, offering notebook, laptop to direct consumers as well as a large

portion of institutional sales.

5. RESEARCH METHODOLOGY

Market Survey Method had been adopted to do this product survey

A sample size of 100 customer in the age range of 20 to 35 have been surveyed

by a set questions and upon a rating scale of 100 both the products have been

rated. (Annexure 1)

 

HP-

Compaq HCL

     

Product brief / description available 50 50

     

Product store availability 60 45

     

Delivery speed 50 40

     

After sale briefing 25 25

     

After sale service 60 45

     

Look & Feel / Sturdiness 80 60

     

Operations 85 75

**Rating out of 100

**Sample size 100

6. UNIQUE SELLING POINTS OF HCL AND HP LAPTOPS

HCL Infosystems has entered the growing notebook market with the launch of its

'HCL Laptops' brand.

The new notebooks come loaded with software specific to various segments like

defense, corporate, retail, etc and the company provides customized solutions

specific to each segment. The company manufactures these notebooks at its

Pondicherry plant with a capacity of 1 million units per year. Initially, these

notebooks were made available in over 600 cities in the country through its

channel network and also offer "best assured support", which includes insurance

cover, along with online support and real-time support at 300 locations.

Although HCL also distributes Toshiba laptops in India, but the brand value does

not get diluted as Toshiba carries its own brand image and a separate

distribution system.

7. SALES AND DISTRIBUTION

The vendors selling HCL laptops pushes its notebooks through 250 retail outlets

across the country and the focus are more on the larger towns. It is also looking

at consumer electronic retail partners.

o Minimizes the number of contacts needed for reaching consumers.

Supply chain systems should focus on cost reductions and improvements

in efficiency across the chain. He also harped on collaborative process for

decision making in the entire supply chain to achieve the ultimate

objective of cost reduction and competitive price to the customers

HP believe in the following distribution strategy

1. Direct Distribution for its commercial uses product like big corporate.

2. For its new initiative like e order fulfilment basis where customer put

there order online it cut the cost of HP.

While in the contrary of Hp, HCL having different point of view in this arena

HCL has a direct sales, channel sales and retail sales network pan India.

Continuously meeting the ever increasing customer expectations and

applications, its focus on integrated enterprise solutions has strengthened the

HCL Info systems’ capabilities in supporting installation types ranging from single

to large, multi-location, multi-vendor & multi-platform spread across India. HCL

Info systems, today has a direct support force of over 3000+ members, is

operational at 360+ locations across the country and is the largest such human

resource of its kind in the IT business in India. HCL Info systems has pan India

presence across metros and non-metros.

2. Break the bulk and cater to tiny requirements

It's difficult to hypothecate as it's only the beginning. There are clues available

from the evolution of IT retail through large-format chains in advanced markets

like the US.

As the retail revolution spreads and competition intensifies, there will be serious

downward pressure on prices. And this could lead to the retail chains adopting a

value-add model.

In the US, some chains have launched their own PCs to give them better control

over pricing, margins and inventory. Many others have moved to providing

packaged services and solutions to SMBs. eventually, most chains will end up

competing with both, the commercial and consumer IT channels

o From the Perspective of HP

HP are treading cautiously & surely don't want to miss the opportunities the retail

revolution presents, but simultaneously, Company don't want to upset there

partners.

Company experience in other countries has taught us that once these retailers

gather critical mass, they tend to arm-twist suppliers. A large national chain may

simply say 'No' to us for not offering the price it wants. This could have serious

consequence on the brand and business.

HP’s primary objective is to protect best interest. While HP will tie up with all

major chains, will also strengthen HP channels by increasing engagement with

them.

HP are yet to finalise there product strategy, but to avoid conflict we might

reserve certain brands for channels and push premium brands through retail

chains. For instance, Presarios will go through channels while the Pavilion range

through retail chains.

o From the Perspective of HCL

HCL launched its first retail outlet in 1996 with a specially configured PC aimed at

the education segment, called the Beanstalk. Today HCL PCs, notebooks and

peripherals are available in more than 1,000 HCL-authorized retail stores across

the country. It has uniquely positioned its products in the emerging retail

scenario, adopting a two-pronged retail strategy – branded stores and large

format retail. George Paul, Executive Vice President, HCL Infosystems Limited,

highlights a few points:

The Retail Expansion: HCL ventured into large format IT retail through its Digilife

store in July 2006 in Gurgaon. In a short period since, 32 stores have been

opened in remote places like Ambala, Varanasi, Meerut, Trichy, Panipat and

Vijaywada. The brand is also available across the large format stores like

Hypercity, Chroma, E Zone, Big Bazaar and Reliance Digital outlets. HCL Digilife

stores feature a unique ‘experience zone’ with the widest collection of IT and

digital products. Customers can actually experience their favourite digital lifestyle

products.

Product Range & Post-sales Support: The range includes PCs, notebooks, digi-

cams, mobile phones, gaming consoles, printers and office automation devices.

HCL in India has the largest service and support network with over 3,000

engineers available at more than 360 locations. HCL Digilife stores leverage the

strong back-end service and support infrastructure.

The target audience: HCL’s IT retail model distinctly targets consumers and

spontaneous buyers of latest IT and digital products. The typical customers

include early adopters, gaming enthusiasts, technology savvy professionals, and

families with children. The Indian consumer appreciates digital lifestyle even in

smaller cities to experience the latest technologies.

Retailer vs Reseller: The retail chain’s target audience is the consumer segment,

while reseller channel caters to business customers. Generally, the channels

suffer a loss because in the absence of IT retail chains, they used to cater to

consumers also. However today, there is sufficient room for expansion for both IT

retail chains and traditional channels. The HCL Digilife stores are better

positioned as a parallel line of IT distribution that coexists with the traditional

resellers’ network.

Future Plan: In the last 10-12 years, IT retail has been growing at a phenomenal

pace. HCL will expand its retail chain to 200 Digilife stores in the next two years.

The ultimate goal of the company is to open an HCL Digilife store in every Indian

town.

3. Supply products in suitable assortments (matching segments of supply

with segments of demand)

How HP compete that:

HEWLETT Packard has consolidated its supply chain management by relying on

a mix of outsourcing and its own resources to meet the challenge of global

distribution strategy for its products.

Based on a careful study of the various parameters of lower cost reduced time

cycle, it has made a supply chain management plan to be able to build its

capacity seamlessly to provide the customers with high quality products at a

reasonable price

HP recorded the highest shipment market shares across commercial and

consumer desktops, portables and workstations.

To cater to the increasing demand and expanding markets for its computing

devices, HP India announced the launch of its second manufacturing facility in

the country at Pantnagar, Uttaranchal this quarter. The plant will have an initial

capacity of 3 lakh computers per month once it commences operations in March

2007. The facility will manufacture HP's latest range of desktop computers,

workstations, notebooks and servers

For Example:-

The HP Pavilion Entertainment Notebook PC series was launched in 2006, and

in just one and a half years it has managed to contribute to almost 10 percent of

HP’s market share (around 41 percent of the overall market). HP’s entry-level

notebook is priced at Rs 50,000, and young people are the biggest buyers.

HP India points out that users, particularly the youth, not only want productive

features like speed, but also an attractive design and entertainment features

such as a remote, media centre, photos, DVD and Live TV etc. HP coming up

with new technologies in notebooks, like the HP Imprint technology in notebooks

(a high-gloss coating with inlaid design for the notebook finish).”

How HCL Compete With:

The Channel Business of HCL Infosystems has an extensive network of over

3000+ resellers across 900 locations. It has actively promoted the penetration of

PCs in the home and the small office/home office (SOHO) segments.

For Example:-

Weight is perhaps the biggest consideration in buying a portable gadget, but in

the case of notebooks people are not willing to compromise on the functionality

just because of weight. In India, battery life becomes an important feature due to

a combination of increasing travel and erratic power supply. HCL is working on

newer technologies and products which offer longer battery life.

4. Provide salesmanship.

HP provides salesmanship in following manner.

1. Though Retail chain

2. through Direct Channel

3. through the portal (Part of Direct Ordering Concept)

HP have 144,000 resellers and partners, but at the end of the day ... HP are

dramatically under covered, and have not off by 10 or 20 percent, It is off by

more than that,

HCL provides salesmanship in following manner.

HCL has India's largest distribution and retail network, taking to market a range

of Digital Lifestyle products in partnership with leading global ICT brands,

including Nokia, Apple, Casio, Kodak, Toshiba, Bull, Ericsson, Cisco, Microsoft,

Konica Minolta and many more.

o HCL Info systems’ biggest strength, say experts, is its channel and

distribution network.

o Retail Outlet Service provided by the Technical people.

o HCL, have varying strategies to increase their market share. HCL

Infosystems, which is seen as a strong player in the desktop space, for

instance, seems to have understood the importance of diversifying its

product range. The company ventured into notebooks in early 2006 and is

already among the top three notebook vendors in India by sales, says

International Data Corp.’s local unit.

o HCL Info systems’ biggest strength, say experts, is its channel and

distribution network: it has over 44,000 dealers and retailers spread

across 4,500 towns and villages. “Over the years, we have taken

advantage of India’s largest service and support network to retain our

market leadership in multiple PC categories,” says J.V. Ramamurthy,

director, operations at HCL Info systems.

o The company is looking to increase the number of both its retail outlets as

well as resellers, with a focus on deeper penetration into rural India.

5. Help in price mechanism

Computer came and appalled the world with its speed and storage

capacity. But after sometime it was felt that it should be portable, fast and

storage-enhanced. It gave birth to laptops and notebooks with cutting

edge technologies. Advancements after advancements took place and

market became flooded with technically enabled notebooks. Now the time

has been that no new technique inspires the market much. So, will it be

appropriate to assume that saturation is grabbing the market, fast leading

people in to reluctance about new advancements that take place in this

important segment of IT hardware?

But before you build up your opinion, you must spare a glace at the

stunning notebooks launched recently by some of the key vendors like

HP, Lenovo, HCL, Fujistu, and Apple. These notebooks are undoubtedly,

technically improved and bear all latest features you can hear of. But what

makes these notebooks special are their classy looks and aesthetics.

Vendors have started comprehending the call of the fashion-loving society

and, thus, are aggressively introducing classy, elegant, stylish and ultra-

portable notebooks in the market.

Especially the year 2008 should be regarded as the year of fashionable as

well as cost-effective notebooks. Taking a lead in this segment HCL

Infosystems unveiled the cheapest and ultra-portable laptop

‘MiLeap’ in different colors and fashionable contours. The company

boasted to target a consumer who needs to stay "connected, informed,

entertained and productive anytime and anywhere." With the launch of

‘MiLeap’ it was being believed that it would sweep the market not

only on the basis of its looks but on the basis of price as well.

Barely two months after Apple launched its MacBook Air, the thinnest

laptop in the market, it waged as though a war in the market because

Apple soon got its rival from Lenovo in terms of ThinkPad X300 ultra-

portable machine. The notebook weighs 2.93 pounds and brags of more

features than Apple MacBook Air. Lenovo has equipped this notebook

with three USB ports and DVD Writer, in comparison to MacBook Air's one

USB port and no writer. To register its strong presence in this arena,

Fujistu had already made its debut with its LifeBook U1010. Fujitsu

launched the smallest laptop with advanced 3.5G technology. Noting an

upward trend towards wireless communications and mobile computing,

Fujitsu has made high-speed connectivity available in 2 different stylist

models, with display size of 5.6 and 14.1 inches.

Hewlett-Packard (HP) in its attempt to combine electronics with fashion

gave its competitors cause to envy by rolling out three new HP Imprint

designs in a colorful event in New Delhi. The three imprint designs, which

are Verve, Thrive and Asian Odyssey, are more attractive for their

aesthetics than for their technical aspects. It was obvious as well from the

way these designs were put on display at the launch. The company tried

to fuse IT with fashion as HP's international brand ambassador and tennis

ace Serena Williams in pink knee-high costume walked down the ramp

with the notebook in hands.

Running a look at this shows that IT is going fashion-hit. Keeping an ultra-

portable laptop embedded with classic looks puts you in the front row of

fashion conscious people. Without any inhibition, these notebooks are

going to hit the market. Only thing that will keep market peers wait is :

after fashion what is going to be the vendors’ target to continue as a

leader in the industry?

HP India price Mechanism:-

In Indian perspective company dealing with two segment

1. Compaq ( Low cost Notebook)

2. HP Pavilion (High end and High cost Notebook)

Form the both of point of view HP leading the market with the share of 26.7% ;

Hp doing well in the lower middle class segment with their Compaq Presario

brand and for the higher end company try to maintain their monopoly with HP

Pavilion series to targeting the youth and young generation.

HCL India price Mechanism:-

HCL Info systems, has announced a $350 laptop. With the lowest-priced laptop

currently retailing for over $700 (excluding the "One Laptop Per Child" laptop

effort), let's examine how HCL arrived at this price for India and how other

companies might learn from it.

Ironically, the announcement of the $350 laptop coincided with Apple's

showcasing of the Air—the thinnest laptop—priced at $1800 US. Obviously, the

two products cater to entirely different market segments. However, there is a

lesson here for well-known brands wanting to make a foray into large markets

such as India and China.

Whenever a global brand enters an emerging economy, there is a tendency to

adopt a "skimming strategy." Even at its simplest, the approach is to multiply the

home country price by the exchange rate, add the customs duties and taxes, and

arrive at the price. This is counter-productive, given the mobility of people and

the propensity to ask a colleague or a friend to pick up one of these products and

avoid the customs duty and tax component. Almost every week, Indian

consumers receive offers of well-known brands from the USA and UK for a price

less than half of what we would have to pay if we were to buy the same product

through an authorized intermediary in India.

The consequences for both producers and customers are hard to miss.

Producers are missing out on huge opportunities, and customers cannot have

access to service when they need it, unless they are willing to pay a heavy price.

Thus, we have a classic lose-lose situation.

The software industry is currently suffering in India and China in large part as a

result of misguided pricing strategies. Software piracy in India is estimated at

over 70% - compared to about 25% in the USA. One can take some comfort in

the fact that piracy has come down from over 90% a few years back to 70% now,

but this is a staggering figure and one that casts a shadow on the credibility of

the Indian customer.

Various measures have been suggested to thwart the pirates– educating people,

coming down heavily on users of pirated software and so on. But these address

the symptom, not the disease. The software industry is just now realizing that

price-sensitive markets such as India need to be approached differently than

more mature markets. The use of Purchasing Power Parity as a determinant of

prices can be a useful option. As an example, if software that is priced at $100

US is priced at INR 800 (just over $20 US) in India, with specific safeguards to

prevent reverse exports, piracy could be curbed to a great extent.

Such an arrangement has worked successfully in other intellectual fields.

Typically, a management text book in the USA can cost $120 or more. Converted

into Indian Rupees at the exchange rate, the price would be beyond the reach of

most students and even libraries. The concept of low-cost editions meant for sale

only in South Asia has done wonders to the adoption of the latest and the best

books by institutions of higher education. Low-priced editions are priced in the

range of 300-400 INR (about $10). Going by this argument, Apple's latest offering

should be available in India for Rupees 15000 (roughly $350 US) and about

25000 (roughly $630 US) even if one were to add local taxes. If this were to

happen, how many customers would HCL's offering have? Probably not too

many.

Successful tapping of high-volume markets requires that marketers adopt

innovative pricing strategies to suit local conditions, as opposed to a global

pricing strategy that many marketers seem to be adopting today.

6. Look after a part of physical distribution and financing

How Hp functioning

Hewlett-Packard (HP) India has tied-up with Rashi Peripherals, a leading

distributor, for the distribution of HP TFT monitors in the country. Along with this

announcement, the company has introduced nine new display options. HP has

now decided to focus on the component and retail segment. Rashi, along with its

reach and penetration in B, C, and D Class cities, is all set to take HP LCD TFT

numero-uno position in this segment in India."

And for the finance HP having venture with Bajaj capital to easy finance their

product through various channel partner and also having 0 % finance scheme

with ICICI bank to take the advantages of corporate dealing.

How HCL doing :-

For the distribution company having biggest advantages for distributing different

branded product in India i.e.

1. Nokia

2. Toshiba

3 .Apple – I pod

Taking these advantage company precisely following complete supply chain

distribution role where their product comes from warehouse and goes to retailer.

Finance:

HCL will have partners targeting specific segments and will also provide

financing option with EMI as low as Rs 699. This will help to bring down two

layers of affordability and thus will help widen the market."

7. Assist in merchandising

HP partner gets branding, HP authorization, HP goodwill cover. Also gets the

back ends, the infrastructure access. for example, a typical partner does not

have to file hardcopy claim with hp - his payment is paid automatically by hp

basis his purchase from tier 1 distributer

In the mean time HCL have a direct support force of over 2800 members

covering 360 locations. It distribution presence in over 800 locations and reseller

network is now over 3000. The channel partners have been an extremely

contributing resource in increasing the awareness levels. Being the direct

interface with the buyer, channel partners are well aware of the importance of

their role in the company’s campaign.  As a part of this campaign, HCL using

information mailers and training programs to, through effective communication to

partners. The objectives are two-fold: The channel community should be able to

identify and abandon counterfeit products, and secondly, the community should,

in turn, be able to guide and educate the buyers about the potential pitfalls.

8. Provide market intelligence

Hewlett-Packard (HP) in its attempt to combine electronics with fashion gave its

competitors cause to envy by rolling out three new HP Imprint designs in a

colorful event in New Delhi. The three imprint designs, which are Verve, Thrive

and Asian Odyssey, are more attractive for their aesthetics than for their

technical aspects. It was obvious as well from the way these designs were put on

display at the launch. The company tried to fuse IT with fashion as HP's

international brand ambassador and tennis ace Serena Williams in pink knee-

high costume walked down the ramp with the notebook in hands.

HP continues to strive in the direction of providing superior products, enhanced

reach, and excellent after sales service even in the B and c cities. We had a

series of new launches this year wherein we offered superior product proposition

across various segments. This in addition to our unparalleled pan India

service network and superior post sales service has contributed to the consistent

growth and success of the company in the notebook space."

Running a look at this shows that IT is going fashion-hit. Keeping an ultra-

portable laptop embedded with classic looks puts you in the front row of fashion

conscious people. Without any inhibition, these notebooks are going to hit the

market. Only thing that will keep market peers wait is : after fashion what is going

to be the vendor target to continue as a leader in the industry?

In the contrary of Hp ; HCL Especially the year 2008 should be regarded as the

year of fashionable as well as cost-effective notebooks. Taking a lead in this

segment HCL Infosystems unveiled the cheapest and ultra-portable laptop Mi

Leap in different colors and fashionable contours. The company boasted to target

a consumer who needs to stay "connected, informed, entertained and productive

anytime and anywhere." With the launch of Mi Leap it was being believed that it

would sweep the market not only on the basis of its looks but on the basis of

price as well.

9. Act as change agents and generate demand

HCL Technologies bagged a five-year $160-million contract for BPO service

operations from telecommunications service provider British Telecom.

Burgeoning government orders drove growth at HCL Info. In fact, the share of the

government in HCLI’s order book is over 60%. The company also benefited from

the extension of 100% tax benefits to IT hardware players for a period of three

years in the Exim Policy for 2003-04. The reduction in cell phone duties resulted

in a reduction of prices by 11%-12% and also curbed grey market sales to a

great extent. Growing sales of Nokia cellphones also boosted HCL Infosystems’

telecom distribution business.

HCLI received an order to automate value added tax services from the Andhra

Pradesh government. In January 2003, HCLT entered into an alliance with

Aalayance Inc, a US-based $4.5-million company in the enterprise application

integration and business integration space.

In April 2003, The Storage Networking Industry Association (SNIA) an

international organization dedicated to delivering storage networking

architectures, education, and solutions for the IT community, joined forces with

HCL Technologies to further advance the Storage Management Initiative

Specification (SMI-S).

HP

Hewlett-Packard announced the availability of HP StorageWorks Data Protector

Express software in India.

The new storage Data Protector Express is easy to install, operate and manage

for businesses which require simple, reliable, efficient and affordable data

protection solutions. The new solution will offer a consistent interface and

functionality across three operating systems: Windows, Linux and NetWare

environments. The product supports tape, disk and optical devices as the backup

media.

Built on a three-tier architecture, the new solution provides simple and reliable

data protection, fault tolerance and increased performance. The three-tier

architecture supports distributed backups using multiple Media Servers while

retaining centralized control for customers.

The solution comprises agents for the protection of networked file servers,

application servers and desktop machines. Additional features such as open file

backup, D2D2Any (disk-to-disk-to-any) backup and bare metal disaster recovery

minimize the impact of backup and recovery operations. The self-tuning parallel

backup stream delivers high backup and recovery speeds. Operations and

monitoring are performed via a customizable graphical user interface (GUI) that

can be run locally or remotely with a common look and feel across all operating

system environments

Following the two method both the company is trying to find out new space for

striving the growth in double digit in Indian subcontinent also fact is the covering

emerging market like Bangladesh, Bhutan etc.

8. CONCLUSION

To conclude, we could sum up that HCL and HP both possesses their individual

USP (as indicated above). HCL traditionally strong in distribution network which

lured Toshiba to circulate its brand in India and on the other hand HP giant in

innovation. Both the organization used their distribution network skill in India and

introduced co-branded products to sell among the Indian consumers. Like

innovation in technology is fast, consumer desires also changes fast and these

two brands together have brought the international brands to come inside India

and win the market.

We cannot say that these two brands are competitors to each other in any of its

product segment because information technology features are more or less

similar at any given point in time. The only thing which matters the most is after

sales service and availability. In after sales service HP has been the best. Being

a foreign entity it has used the domestic manpower to work for its benefit in India.

BIBLIOGRAPHY

Marketing Research By G C Beri

Marketing Management By Philip Kotler

JOURNALS

Computer Express

Data Quest

Computer Today

News Paper

Economic Times (CD)

Times of India

Hindustan Times.

Website:

www.hclinfosystems.com

www.computerexpres.com <http://www.computerexpres.com>