HP Changes Tack to Penetrate New Turf

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HP Changes Tack to Penetrate New Turf

Business Daily (Nairobi)

July 2, 2008

News Article By Okuttah Mark

Changing consumer trends have forced global printer and cartridge manufacturer Hewlett Packard to adopt cost reduction, security and fast performance as key themes to penetrate new markets.

Hewlett Packard East Africa managing director, Ken Mbwaya, said the themes are in line with the goals of most businesses, if they have to stay profitable and to mitigate risks.

The strategy is evident in two recently launched products, HP Colour Multifunctional CM 6040 and Mono Functional 4345 mfp, in which a number of functions have been combined, eliminating the need for multiple purchases.

Control solution

They, for instance, have the capability of sending documents to an email, scan, or a personal computer folder. The CM 6040 printer costs $16,000, while the MFP 4345 goes for between $3,000 and $4,000 depending on functions.

The printers come loaded with a control solution that allows only authorised persons to make print copies or to scan documents.

Another feature of the printers is that an organisation can pre load a given print budget for each user, within the organisation, and once the limit has been exhausted the person can not use the facility - unless topped up.

HP Technology Consultant Paul Nguyi says print information or the user's statistics can be obtained periodically and used for accounting and planning purposes. Mr Mbwaya says the company has increased its work force in the country to 43 in order to serve the increased need of nine other countries in the South and East Africa region that are served from Nairobi.

Kenya, however, remains the main market contributing half of HP's revenues. The company's annual sales in Kenya range between Sh325 and Sh390 million. The revenues are mainly derived from the sale of cartridges, PCs, printers and services to telecommunication companies and the banking sector. Mr Mbwaya says the company spends about Sh4 billion on research and development, which is recouped over a six year period.

The payback period, however, is distorted by counterfeits and a grey market that brings almost similar products into the market at a cheaper price within three years of roll out.

An information Bill seeking to protect intellectual property rights is awaiting presentation to Parliament for debate and enactment.

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