Case Study

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IIFT Part Time MBA – 2010 – 2013

Business Economics
Prof B. R. Chaudhuri

Case Study

How HP used tactics of the Japanese to beat them at their game – Stephen Kreider Yoder

Sidharth Jaiswal Roll No. 30

1. Before introducing its inkjet printers, did HP have to estimate the demand curve for them? Why or why not? Yes, because by estimating demand HP would have an insight whether their upcoming products were consumable in the market or not. It will also give highlight the shortcomings of existing products in the entire printer family. The presence of competition will be a very important factor for the launch of their inkjet printers as they would have a competitive edge in the market.

2. When studying Epson before going after the Japanese-dominated dot matrix market, did HP try to determine which factors would have an important influence on the demand curve for its product? If so, what factors seemed to be particularly important. Yes. The factors that seemed important were –  Price of the goods (P) – The inkjet printer has to cheaper than other types of printers such as dot-matrix and laser, which would increase the demand of the product  Price of related goods (PR) – Dot-matrix and laser printers were expensive  Taste Pattern of consumers (T) – Consumers had no option other than using available products (dot-matrix or laser printer) which had serious flaws such as poor print quality and color. By taking this into consideration, HP will have a competitive edge by introducing ink-jet printers  Expected price of the good in some future period (Pe) – With mass production and cost cuts, economies of scale could be achieved thereby decreasing the price of the product in the near future Other than the above mentioned factors the presence of almost no competitors, expected declining prices of PCs as well as declining consumer acceptance towards dot-matrix and laser printers gave HP an important insight while determining the demand curve for its inkjet...
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