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| [Industry Forecast '99] HP Japan Stresses Customer-First Policy, Pres. Says
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January 6, 1999 (TOKYO) -- Masao Terazawa, president of Hewlett-Packard
Japan Ltd., said a key point for the company's future growth is to strengthen
ties with customers by providing services that precisely match their
needs.
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Hewlett-Packard Japan will aim to achieve an annualized growth rate of
around 10 percent for its 1999 business year (November 1998 through
October 1999), despite the harsh business environment. If the company
does post a growth rate of around 10 percent for the 1999 business year,
it would be roughly equal to the growth rate in fiscal 1998.
Terazawa, who was appointed president on Nov. 1, 1998,
is the company's first president who worked his way up through the ranks.
BizTech interviewed Terazawa after he had been in the job for about
two months.
According to Terazawa, Hewlett-Packard Japan's results for the 1998 business
year were good, considering the fact that the domestic economy was in
the doldrums. Sales rose 9 percent over the previous year, to around
300 billion yen (US$2.6 billion). In addition to UNIX servers, the company's
main product, sales of Windows NT machines also were strong.
Its market share for color ink-jet printers climbed to around 15 percent,
so there are signs that printers are becoming a major part of the company's
computer-related product range.
BizTech: In 1998, Hewlett-Packard Japan's sales grew by 9 percent,
although most companies were slashing their investments in information
technology systems. As the company's president, how do you rate that
achievement?
Terazawa: It's a good result. Looking at the structure of the
company, in the years leading up to 1998 computer and IT-related equipment
accounted for around 62 percent of total sales, with measuring equipment
accounting for the remaining 38 percent.
However, in 1998 the ratio of computer and IT equipment sales rose by
two or three percentage points. Sales of computer and IT-related equipment
accounted for the improved business performance.
We haven't yet held our general stockholders' meeting, so I'm not able
to reveal the exact figures, but I can say that our profit structure
is extremely healthy.
Sales of our UNIX servers continued to expand, but those of UNIX workstations
actually fell by 8 percent from the previous year. Other products, such
as our Windows NT servers and workstations, and color ink-jet printers
have now become mainstay products.
Regarding ink-jet printers, we have done quite well. All the surveys
by market research companies show that HP Japan has close to 15 percent
of the market, putting us third in the market share rankings. And it
won't be long before we will seek to gain a 20 percent market share.
Importantly, there is a clear 'Top 3' class of market players, which
is increasingly pulling away from the remainder of the competition.
To sum up 1998, I'd say that although business went well for us, it certainly
wasn't an easy year.
BizTech: What kind of year will 1999 turn out to be?
Terazawa: First, looking at the domestic industry as a whole,
I think 1999 is likely to be equally as challenging as 1998.
Businesses are undergoing thorough restructuring processes and budgets
for IT systems are not exempt from their efforts to cut costs. Regardless
of the industrial sector in which they operate, companies will continue
to hold down investments in computers and IT. Therefore, I think the
probable business environment for 1999 doesn't allow IT businesses such
as ours to look ahead with much optimism.
A bright spot on the horizon is the possibility that demand for semiconductors
will pick up momentum in the middle of the year. The key to that is
the growing popularity of mobile information devices, such as PDAs,
equipped with email capabilities. An example of that kind of device
is the Pocket Board from NTT Mobile Communications Network Inc. (NTT
DoCoMo).
The use of mobile equipment is starting to spread to the private consumer
market, rather than just being limited to business customers. If things
really start to take off, demand for semiconductors will recover and
that in turn will give impetus to the manufacturing sector as a whole.
For the semiconductor industry, the April-June period is likely to be
a time of bottoming out. Later, it will probably start picking up steam.
BizTech: That view of the outlook for the semiconductor industry
is an optimistic scenario. But what happens in a worst-case scenario?
It is also possible that the current tough market conditions will simply
drag on. What then?
Terazawa: Then we will just have to ride out the recession by
continuing to implement measures to strengthen the company structure,
as we did in 1998.
HP Japan will continue to promote its 'customer first' policies. The
aim of these policies is for HP Japan to develop close relationships
with its customers, to provide high-quality service encompassing everything
from initial system design to servicing and system maintenance.
As a computer manufacturing company we must hold on tightly to our customers
so as to steadily increase profits, and that's an area that we need
to continue to focus on. From 1998, HP Japan has been instituting a
system whereby we try to offer the highest possible levels of service
to our clients.
HP Japan also introduced a financing service. It is a service that includes
a variety of different plans for businesses such as equipment rentals,
leasing and outsourcing. By offering investment plans, it enables our
customers to obtain the most suitable IT system for their business needs.
The service aims to make it easier for customers to invest more freely.
HP Japan uses the service to provide our customers with the necessary
upgrades for their client machines (PCs).
BizTech: As a company in the Hewlett-Packard group, what is an
area in which you must focus in the Japanese market?
Terazawa: We must deal with companies that operate on a global
scale. For example, if a customer of our U.S.-based parent decides to
start operating in Japan, then we provide them with computer and IT
system support.
And now, with the 'Big Bang' liberalization of Japan's financial markets,
various U.S. and European financial institutions are moving into Japan,
and many of them are customers of Hewlett-Packard in their home markets.
HP Japan's relations with these clients are growing, and this helps
boost our sales.
We seek to provide even better service to these overseas companies that
are coming to Japan, to increase our sales and because it is a part
of our responsibility to the Hewlett-Packard group.
Related story: HP
Japan Sells More Than 100 Large Servers in FY98
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here for more New Year features.
(BizTech News Dept.)
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