Repost: Hewlett survival tactics in the Phillies
HP Shows Way to Survive Asian Crisis
Newsbytes - January 30, 1998 11:24
MAKATI CITY, PHILIPPINES, 1998 JAN 30 (NB) -- By Jennifer B. Malapitan, Metropolitan Computer Times. Hewlett-Packard [NYSE:HWP] has been strengthening relationships with its partners and customers in the Philippines primarily through hedging dollars with three-month windows for their wholesalers in the country.
Raymund Del Val, president and general manager of Hewlett-Packard Philippines Corp. (HPPC), HP's fourth subsidiary in Southeast Asia, said they started to offer peso pricing to their wholesalers by hedging dollars since November. "We haven't increased our prices," since the onset of the crisis, Del Val asserted.
Besides hedging, the executive said they have started offering inventory financing as well as financing of computer acquisitions, to help maintain the profitability of their business partners. Inventory financing is geared towards increasing liquidity of HP's wholesalers, while the financing scheme is a measure that the vendor adopted to help customers pursue their computerization projects. Unlike financing schemes done through banks, HP's financing scheme is being handled by an internal staff headed by its technology finance consultant Andre Fausto.
While the financing scheme is a measure that has been offered by HPPC since its establishment in the country, the program is now being aggressively pushed as a way to help customers cope with the ongoing crisis.
HPPC's finance department categorizes customers that can avail of the program. Del Val said they would be willing to accept even post-dated checks or require higher collateral for as long as these companies are loyal customers of HP.
While acknowledging that the local IT market has been projected to shrink by around 15% this year, compared to the 30% to 40% growth in the past two years, Del Val is confident that HPPC will still meet its target and increase revenues by 20% this year compared to the previous year, "barring any intersection of economic and political crisis."
The executive is optimistic that they will bounce back immediately in 1998 after having experienced a disappointing year-end sales from November to December last year. "Normally we make big sales during year-end, which we didn't happen last year. However, the revenues we made in the last two months in 1997, we were able to surpass for the first 20 days of January 1998," he explained.
Del Val stressed that the move to make public their strategy in coping with the ongoing crisis should prove that "we are a force to reckon with."
"They will learn about our plans and strategy, but in order to succeed, there has got to be execution as well as the right infrastructure on which to execute the plan," Del Val asserted.
Commenting on Compaq's acquisition of Digital, Del Val said the move means the top three IT companies (IBM, HP, and Compaq) will be very busy this year in defending and increasing their market share.
Reported by Newsbytes News Network: newsbytes.com.
(19980130/Press Contact: Cielo Narvaez, HPPC; phone +632 894-1451; fax +632 811-0635)
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