Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Situation analysis
HPs CSO are market leader in computers production
Price/performance factor is a USP
product lines Adoption of common RISC architecture, aimed at easing (lowreputed)marketing departments job Buying patterns shift to increasingly including OEMs, VARs and distributors Consequence: lowered HPs average prices and increase in cost of sales Decision to focus on top forty to fifty customers UNIX workstations demand growing 40% per year application of Pareto 20/80 rule 20% of CSO customers account for 80% sales
Top 5% of customers accounted for 40% of HPs total sales Direct sales by HP sales representatives
Not defined
Issue at hand
Identify market and organisational opportunities to grow and reduce operational costs (i.e. Sales, support) from 30% to 10% Redefinition of industry focused approach to selling to large/enterprise customers
solving the issue could yield another structural change in the sales organisation department (first change:1992) Robert Dudley from Leap Consulting commissioned to audit HPs enterprise customer management approach
buyer requirements Suggest ways to optimise current approach to enhance return on productive selling time
Two cells sampled for the audit: 1) Largest HP Customer (see next slide) 2) Industry in which HP was strong
customer initiated
influenced by IT DESCRIPTION Assigned budget 4 stages The three would generate 80% of the sales to the large customer (5 sales reps) Project average length: 6 months =>4-stage process 53 hours per week or 2400 hours per year (per sales rep) Turnover: $60m sales + $59m hardware + $1m consulting = $120m total sales
PROJECT SPECS
Mid-stream
selection of accounts, i.e. not pursuing each opportunity
Upstream
sell concepts and instil delivery ability to customers
Entering an account at multiple levels Tailored to the dynamics of different sales opportunities
Questions
1)
Is this the time for HPs CSO to institute more changes? What are your recommendations to Diaz? Its about time for HPs CSO to institute some changes to the current architecture:
Avoidance of numerous time drains due to sales rep running in a treadmill to do everything for their accounts, e.g. Developing quotes, configuring systems Need to prioritise the accounts and institute a support team specialised on understanding the accounts needs further reducing wasted time The latter point will reflect a better conversion rate in sales opportunities, focusing not solely on repurchase opportunities In general give more specifications as to which procedures to follow in deciding to serve an account and at which conditions
Questions
2) How is selling instruments (HPs traditional business) different from selling computer systems? Why does HP treat its sales force as a cost centre? What are the implications of such a structure? it differs in that HP evolved from a manufacturer of hot boxes into a global supplier of information appliances and solutions HP treats its sales force as a cost centre because they are focused on additional profits, thus making the salesforce strive to close as many orders as possible, not being able to add value to any business
also due to the transactional nature of the businesses HP
serves; no customer seems interested in partnering up in the long term with HP so that to mutually benefit and add value Emphasised by the (almost) lack of innovative projects
Questions
3) What is HPs CSO approach to building relationships with enterprise customers? What are its strengths and weaknesses? HP serves this segment directly HP sales rep invested time and effort from an early stage in learning their customers businesses both identifying problems and solutions to save money and increase efficiency
salespeople transformed in consultants
adding value to both businesses through customisation of offerings Weaknesses: need for optimisation in providing such kind of customised consultant service. In fact sales people are used by the customers to solve any problem they may have. Also, there is a need to prioritise accounts: skip that and youll lose business
Questions
4) Do you agree with the findings of the two audits as well as the consultants recommendations? How is the new approach different from HPs CSO current approach to managing enterprise customers? The recommendations by the consultant are consistent with the critical success factors of the three new categories (down,mid and up stream) and with the findings However HP needs to resolve its internal and external issues (e.g. being positioned only as a hardware supplier) before moving on to a portfolio management strategy
That means focusing on training more salespeople in forging
relationships with large enterprises; it also involves prioritisation procedure for mid-stream and up-stream opportunities Currently, HP salespeople are not prepared for such a switch (HP is not well known for its marketing savvy)
instead of entering it at the downstream level and then trying to tackle the rest of the organisations needs