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Description
Over the past five years dramatic improvements in quality and technology, along with fast falling average selling prices, have led to a rapidly growing installed base of home and office printers. These trends have caused an explosion in the variety and types of media on which to print, such as photo papers, greeting cards, brochure paper and art paper. This growth opportunity has attracted many players and has resulted in a hotly competitive market. The North American retail channel is now highly fragmented with 34 players vying for a share of the opportunity. This paper focuses on developing a competitive analysis methodology that utilizes two important measures: market commonality as proposed by Chen (1996) and market posture, as described by the author. This analysis is based on data collected monthly by ARS, Inc., a market research firm. This data tracks monthly placements of stock keeping units (SKUs) in each of 14 major retail chains that sell printing media. Based on this data, a new competitor map for the focal firm, Hewlett-Packard (HP), is proposed that addresses these two measures. HP's main rivals are identified on the map and this is then followed by a discussion of generic strategies as well as specific actions. HP's primary focus should be on the three competitors contained in Zone I of the competitor map: Epson, Avery, and International Paper (IP). An aggressive response is required against Epson and Avery, while a more cautious and cooperative approach is appropriate against IP. HP must defend against Epson by using a printing system message which addresses photo printing and that is targeted to the end-user. HP must use an aftermarket approach to defend against Avery by offering a broad product line in the card category, and an approach that is targeted toward the reseller.
