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Informatics |Информатика
LESSON 4
Read the text: H-P TO NEC, “BONZAI!”
In 1993, Hewlett-Packard (H-P), a major American multinational producer of computers, printers, and systems, was challenged by Japan’s NEC. Japan’s largest computer manufacturer was going to attack H-P’s leadership in computer printers in the standard Japanese manner: undercut prices with a new, better product. This is the same strategy used by Japanese manufacturers years ago to take the market from H-P after it had introduced handheld calculators.
This time the strategy failed. Months before NEC could launch its inexpensive monochrome inkjet printer, Hewlett-Packard had brought to market an improved color version and drastically cut the price by 40 percent of its best-selling black-and-white printer. NEC withdrew its printer, now overpriced and uncompetitive. The head of Canon’s inkjet business explained H-P’s success in this way: “H-P understood computers better; it understood American customers better. Japanese makers’ culture hindered the kind of quick decision making needed in the fast-paced U.S. computer market.”
When Hewlett-Packard marketers began to study the printer market, they knew the company would need a product more technologically advanced than the Oki and Seiko dot matrix printers dominating the printer market. A printer using the inkjet technology accidentally discovered by an H-P scientist the year before was the answer. The inkjet printer was cheaper and more easily adaptable for color printing, and nobody else had perfected it.
The quality of the first inkjet H-P made was bad, but because the company believed PC users wanted better-quality printouts of text and graphics, its engineers began a process of continual improvement to solve the inkjet’s problems. When executives from Epson’s U.S. company told their superiors in Japan that PC users would soon demand high-quality printers and that Epson should work on the inkjet technology, the response of Japanese executives was, “Who are these Americans to come over and tell us how to build our products?”
In 1988, H-P introduced the plain-paper inkjet printer, the Deskjet, that was expected to take market share from the Japanese. Instead of being positioned as competition for Japanese dot matrix printers, the Deskjet was competing with the more expensive H-P laser printers, and sales were low. In the fall of 1988, H-P managers decided to meet dot matrix printers head on. They did it with the obsessiveness of a Japanese company. Teams of H-P employees in “Beat Epson” sweatshirts studied Epson marketing practices, surveyed Epson customers, and dismantled Epson printers for engineering and design ideas. They discovered that Epson got a long life from a product by creating a broad product line made up of many variations of one basic printer.
By 1992, Japanese printer makers realized that dot matrix printers were being attacked by inkjets, whose sales were climbing while their sales fell. When they tried to enter the market with their own inkjets, they were stopped by H-P’s lock on many important patents. When trying to develop print heads, engineers of the Citizen Watch Company found that H-P had filed so many patents that it was like being in a maze. “You go down this path and suddenly you’re into an area that may infringe on their main patents and have to back up and start over,” said a vice president of Citizen’s U.S. unit.
H-P’s economies of scale have allowed it to lower production costs and undercut any competitor’s price. Its production experience enabled it to make continual improvements in the manufacturing process. Today’s inkjet production costs are half what they were in 1988 when measured in constant dollars. These cost improvements have allowed H-P to carry out this competitive strategy: When a rival attacks, hit back fast and hard. When H-P learned that Canon was going to launch a color inkjet printer in 1993, it cut the price of its own version before the Canon version came to market.
Hewlett-Packard has 55 percent of the world market for inkjet printers. The company’s success with inkjets and laser printers has made it one of the fastest-growing American multinationals. The success of the printer division’s mass market approach is causing other H-P divisions to try to make the lowest-cost personal and handled computers in the market.
H-P is just one of a number of American firms that are taking back American technologies such as cellular phones, disk drives, computer-chip-making machinery, and pagers that had been previously lost to the Japanese.
1. Match the left part with the right:
1. Epson got a long life from a product |
a) studied Epson marketing practices. |
2. The inkjet printer was |
b) cheaper and more easily adaptable for color printing, and nobody else had perfected it. |
3. Teams of H-P employees |
c) by creating a broad product line made up of many variations of one basic printer. |
4. H-P is just one of a number of American firms |
d) that are taking back American technologies such as cellular phones, disk drives. |
2. Complete the sentences with the suggested words: experience, scale, improvements, undercut
H-P’s economies of ______ have allowed it to lower production costs and ______ any competitor’s price. Its production ______ enabled it to make continual _______ in the manufacturing process.