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Hewlett Packard-Computer Systems

Organization: Selling to Enterprise Customers

Group 5
Chythra T C (14PGP014)
Swati Khobragade
(14PGP023)
Pranav kumar (14PGP031)
Surya kant (14PGP048)
Devanshu Kulthe (14PGP078)
Shishir (14PGP098)
Leena Bodo (14PGP106)
Ronit jena (14PGP111)

Case overview
HP wish to identify market and organizational opportunities that might
provide growth while further reducing sales and support costs

HP has to change the current industry-focused approach


to selling to enterprise customers
Leap Consulting Inc. to audit HPs enterprise customer
management approach
Audit objectives
Identify the gaps
Weaknesses
Opportunities

HPWay
Hewlett-Packard founded in 1939 by Bill Hewlett & Dave
Packard
Market leader price/performance
HP is engineering driven, competing on the basis of
technological features
Was not good in marketing
3 larger business sectors: measurement systems,
computer products, computer systems
Dont have organization wide culture.
Product division focused on long-term profit objectives
& in the field it focused on meeting short-term sales
quotas

Problems
Buying pattern shifted to VARs & OEMs caused
increase in cost of sales
Wasting so much time on sales force treadmill
(exhibit 2)
Have to optimise the return on sales efforts
Selling cost of 30 cents to every order dollar
should be reduced to 10 cents to every order
dollar (cost reduction from 30% to 10% of sales)
Change the current industry-focused approach
to selling to enterprise customers

CSO Customers
Computer systems organization(CSO)
Large/Enterprise

Small-Medium size

Individual

Top 5% of
customers
accounted more
than 40% sales
$0.5-200 million
order
Direct sale by HP
sales reps
65% of
productive time
of CSOs sales
force

$0.25 million
order
monthly/quarterl
y basis
Combination of
sales reps and
channel partners

Served
exclusively by
indirect retail
channels

Sales process audit


Four stage audit process with two samples

Samples
Largest customer
Industry where HP is strong
Objectives
Find how HP sales actions aligned with buyer
requirements
Suggest ways to optimise current approach to enhance
return on productive selling time

Audit result
Observation: HP current sales strategy & process did not optimize
the total sales opportunity
Typology of sales opportunity: Customers business potential broke
down into four types

Repurchase
Replacement

Customer initiated
Assigned budget
Significantly influenced by IT
4 stages

Expansion
HP initiated
5 stages

Innovation

Continued..

Repurchase
Replacement
Expansion
Innovation

average 6 months long project


2400 work hours per annum per
sales rep
Total $120 million turn over
$60m in repurchase,
replacement, expansion
$59m in hardware
$1m in consulting
1 year for 4 stages and 1or 2 years
for 5th stage
$22 million turnover
20% sales from lead

The next steps


HP has price/performance advantage. It enters an
account through downstream opportunity. Then
migrate to midstream & upstream by moving up.
HP good at capturing downstream and increasing
midstream customers. But not at upstream
Have to reconsider the current migration strategy
Downstream
Repurchase

Midstream
Replacement
Expansion

Upstream
Innovation

Alternate model

Migration
strategy

Portfolio
management

Downstream - Continuously improve operational


efficiency
Midstream Shift from efficiency to selection
Upstream Ability to sell concepts

Portfolio management
Enter an account at multiple levels with a sales approach
that is tailored to the dynamics of the different types of
sales opportunities
Optimization of return on sales effort by matching sales
resources to sales opportunities
More training to sales team

Thank You!