Tuesday, January 18, 2005

WSJ.com - H-P Wins Fans by Ceding Market Share to Dell

WSJ.com - H-P Wins Fans by Ceding Market Share to Dell: "Sometimes being No. 1 isn't worth the effort. Hewlett-Packard Co. seems to have learned that lesson -- and investors could benefit.
The technology giant's personal-computer business has long faced the difficult choice between focusing on grabbing market share or on improving profitability. For much of the past two years, H-P has chosen the first approach, aggressively battling rival Dell Inc. to claim bragging rights as the top PC seller.
But in an important change, H-P is now backing off from seeking market share at all costs, or going all-out to unseat Dell from the top slot.
The reason for the applause: The Palo Alto, Calif., company is now making clear that profits are its top priority. "We won't sacrifice profitability for market share," Carly Fiorina, H-P's chief executive, said at a meeting with analysts late last year. Her comments are echoed by Vyomesh "VJ" Joshi, who heads the company's highly profitable printer unit and who last week also was put in charge of the PC business. "The focus is first going to be on the bottom line," he says."

As opposed to, say, focusing first on competitively addressing customer satisfaction? Where's the relationship between higher HP profits and improved customer satisfaction? It's not as if Dell is winning by offering lower-cost but functionally inferior products.
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