CAREER ADVANCEMENT / OCT. 11, 2014
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What Startups Can Learn From The Dell-HP Catfight?

HP has announced that it would split its enterprise hardware as well as its service unit from its main computer and printer selling unit. The announcement comes at a time when the company is in the midst of a long-time plan to turn around its fortunes.

Dell thinks HP has a difficult road ahead

HP’s longtime rival Dell used the opportunity to swipe back and show its customers the advantage the latter had over HP. In one of the statements by David Frink (Dell’s spokesman), the company announced that it is singularly focused on serving its partners and customers, unlike HP. He also added that HP’s decision to split its business is baffling and appears to have company and shareholder benefits rather than customer benefits. According to Frink, it would be very tough for HP to split its operations completely. Other major companies that made similar decisions in the past, took years to settle down.

Is Dell taking revenge?   

This is Dell’s turn to ‘have a go’ at HP after the latter made a similar statement following Dell’s announcement of a ‘leveraged buyout plan’ a year ago. In February 2013, HP said that Dell is undergoing a transition and an uncertain period, which is not good for its customers. The company also went on to say that Dell’s ability to experiment with new products and services will be limited owing to its debt load. Leveraged buyouts would mean leaving existing customers and lack of ability to innovate. HP wanted to take advantage of the fact that Dell customers may look for alternatives.

The surprising similarity between the two statements

The message and tone of both the statements were surprisingly identical. It casted doubts over the rival’s new decision while also questioning the rival’s commitment towards its customers.

The two statements were not the only clash between the two rival brands. They’ve had a history of encounters. Apart from competing for customers for decades, these two tech companies have gone head-to-head in winning potential acquisitions. In 2010, HP successfully roped 3PAR at a cost of $2.35 billion, after a month long bidding war with Dell, to buy the data-storage company.

Both these companies were also linked for a potential merger with EMC Corporation, another data storage company. Even though the hype surrounding the merger of EMC and HP died last month, due to lack of shareholder support, Meg Whitman, the CEO of HP, did not rule out the possibility of the deal. In her announcement to Fortune, Whitman said that her company’s ‘merger and acquisition strategy’ will be in the best interest of its shareholders.           

What’s the take for new startups?

From big giants like Apple and Samsung to thousands of other small companies, one thing has been in common – cat fights. The recent mockery made by HTC and Samsung over Apple’s development of big screens is a typical example of cursing and cat fighting. 

So why do these companies curse each other or fight?

Well, it could be the modern way to stay ahead of competitors. When you make a mockery or a curse or a complaint about your rival brand, two things happen:

a)      You make your presence felt to your customers. Tell them why your brand is better than the rival.

b)      To some extent, you may succeed in pulling your rival’s customers by telling them why your rival is not as good as you.

As young business entrepreneurs or startups, you may have to use these business skills to exceed and succeed. Let us know what you think about the ‘cat fight strategy’ used by tech companies these days. Please feel free to share your thoughts in the comment section below.  

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