hp casestudy final 20.5

7/29/2019 Hp Casestudy Final 20.5

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STRATEGIC ANALYSIS OF

HEWLETT PACKARD

CORPORATION


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Contents

Introduction & history

Vision , mission & Core Competencies

Internal environment scanning ??????

External environment scanning Using Porters Five Forces Model Problem Statements ??????

SWOT Analysis

TOWS MATRIX

Direction Strategy ?????

COMPETITIVE PROFILE MATRIX (CPM) ???????

BOSTON CONSULTANTING GROUP MATRIX (BCG)

STRATEGIC RECOMMENDATIONS


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Introduction

Bill Hewlett & Dave Packard graduated in electrical engineering fromSTANFORD university in 1935.

The company originated in garage in nearby Palo Alto,California,USA during afellowship in 1939 with initial capital investment of us $538

Hewlett Packard company commonly referred as HP

American multinational information technology corporation headquartered inPalo Alto , California , USA Nearly in each country

hp product lines include: personal computing devices

enterprise servers

related storage devices

diverse range of printers & imaging products

Hp markets its products to household, small to medium size consumers andenter rise directl as well as via online distribution


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VISION & MISSION Vision statement

To view change in market as an opportunity to grow, touse our profit and our ability to develop & produceinnovative products , services and solutions that

satisfy emerging customers need

Mission Statement

To provide product, services and solution of highestquality and deliver more value to our customers that earn

their respect and loyalty


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Core Competencies

HP is showing a very strong core business in devices(servers, PCs, and printers) across markets andgeographies

Their traditional device businesses are showingsignificant strength against their competitors


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Internal Environment Scanning

Tangible Resources:

The financial resources of HP are distinguished by theirwealth of successful acquisitions and valuable

partnerships.

Their financial ability has also allowed HP to developexpertise in their supply chain and distribution channels.

With collaboration of their own manufacturing equipment

and by utilizing out sourced manufactures (OMs) HP hasbeen able to develop high quality devices with efficientand accurate modes of international distribution.


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Physical Resources:

Property, plant and equipment are another tangibleresource of HP.

The facilities are maintained for development andmanufacturing.

The company plans on reducing the number of core sitesin order to decrease IT spending and alleviate real estate

costs.Technology

Technological resources of Hewlett-Packard arerepresented by a large patent portfolio.


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Organizational

Structure and business plans. The structure of thecompany is broken down into seven segments.

These segments are structured by activity.

Basing the structure around activities or product groupingsmakes it easier for HP to focus on customer needs in eachdivision, and market segments for different divisions.

The disadvantage of having a structure based aroundactivities is that some company functions may beduplicated.


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Intangible Resources

Innovation

Innovation has defined the success of HP.

The culture of the organization has embraced the value ofknowledge sharing.

Human Resources

HP has 324,600 employees worldwide while servicing more thanone billion customers in 170 countries on six continents

HP prides themselves on their corporate culture. They createan environment that celebrates individualism, but at the same

time one that is also wholly supportive of teamwork.


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Intangible Resources

Capabilities

HP has the capability to deploy resources efficiently and managean enterprise that operates with seven business divisions all of

rich complexity and skill. Merging

This capability is teamed with the companys fluent innovativeexpertise. In addition to acquisitions HP has had long standingpartnerships with many of its market rivals.

Core Competencies

Multidivisional coordination, acquisition management andinnovative collaboration.


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External Analysis Using Porters Five Forces

ModelThreats of New Entry

Capital cost for entering into hardware and software market isnot so easy.

The high cost of developing the products forbids the newentrants into the market.

It needs a huge financial amount to get into this venture.

Threats from the Competition

The necessity of personal computing has overstepped the

outlooks. HP faces competition from Dell, Acer, Lenovo and Toshiba.

Dell has managed to get the second position in market sharepushing Acer right back into the third place


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Model

Threat of Substitutes

The substitute for Hewlett Packard depends upon theproduct.

The Substitutes for Personal Computers is an Applesipad which operates in same interface


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Model

Bargaining Power of Buyers

More than 20,000 brains of HP are serving 409 publicsectors in 32 countries.

94% of fortune 100 companies, 95 out of 100 worldslargest bank operates with HP software.

130 Stock exchanges are provided with HP worldwide The customers have an option to switch to another

supplier if the prospects do not cope with.


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Model

Bargaining Power of Suppliers

HP has the prominent supply chain in IT industry over 700suppliers in production in 1200 locations globally.

Some of the key suppliers of HP are Microsoft Corporation,Advanced Micro Devices, Intel Corporation, NVIDIACorporation and Sony Corporation.

Switching has not been possible with supplier like MicrosoftCorporation which supplies the Operating System for HPproducts.

Similarly with Intel Corporation and AMD both provide motherboards with specific specifications.


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Problem Statement

Debt

The Company was one time in a series of debt for manyyears, which kept HP on the ground from investing in

different business opportunities. Technical Problems

One major problem and complaint from customers aboutthe hardware supplies of HP was its touch pad.

Lack of mainframe management

The Open View's lack of mainframe managementcapabilities is a problem that affected the company overallperformance.


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SWOT ANALYSIS

Strengths Weaknesses

Opportunities Threats

Brand name

Low debt

Wide range of innovative products

Developing of own hardware and software

Web technology used for productawareness & sale

HP is a giant multinational company.

Lack of in-house managementconsulting division

Intellectual capital is underestimated

No aggressive investment in R & D

No good people retention policy

Lack of configuration database

Expansion of retailed stores for

customer convenience

Participation in joint venture

Make easy to use product for upcomingretirees

Computer and cell phone software &hardware

Competitors technology & pricing

low compatibility with non- HP product

Availability of substitute

Less global coverage than competitor


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TOWS MATRIX


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TOWS

MATRIX

Strengths - S

1. Brand name

2. Low debt

3. Wide range of innovative products

4. Developing of own hardware andsoftware

5. Web technology used for productawareness & sale

Weakness W

1. Lack of in-house managementconsulting division

2. Intellectual capital isunderestimated

3. No aggressive investment in R &D

4. No good people retention policy

Opportunities O

1. Expansion of retailed stores forcustomer convenience

2. Participation in joint venture

3. Make easy to use product forupcoming retirees

4. Computer and cell phonesoftware & hardware

SO - strategies

(S1, S3,O1,)(must open new retail storesthroughout the world to take

advantage of financial strength)

(S4, O3)

(develop easy pc and cell phone for

old generation)

WO strategies

(W1,W5,O2)(develop new HR policy in order toretain human capital by taking

advantage or other firm management

)

Threats - T

1. Competitors technology &pricing

2. low compatibility with non- HPproduct

3. Availability of substitute

4. Less global coverage thancompetitor

ST strategies

(S4, T1)

(developed low price and innovative

pc & cell phone than competitors )

(S5,T2)

(developed such hardware and

software for computer & cell phone

which are compatible with othercompanies software and

accessories

WT strategies

(W1,T1)

(give attention to management

consulting division to have

more focus on technology

improvements)


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Direction strategy

Critical Region:

ST

Managerial Decision:

Market development

Horizontal Integration


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Critical success factor

weight

HP DELL CANON

Rating Score Rating Score Rating Score

Innovation 0.11 2 0.22 4 0.44 3 0.33

Management 0.08 3 0.24 4 0.32 2 0.16

Technology 0.12 4 0.48 2 0.24 3 0.36

Financial Position 0.10 4 0.40 3 0.30 2 0.20

Market share 0.09 3 0.27 4 0.36 2 0.18

Customer loyalty 0.10 4 0.40 3 0.30 2 0.20

Brand name 0.11 2 0.22 4 0.44 3 0.33Pricing 0.11 4 0.44 3 0.33 2 0.22

Product Quality 0.09 4 0.18 3 0.27 2 0.18

Compatibility 0.10 2 0.20 3 0.30 4 0.40

Promotion 0.08 3 0.24 2 0.16 4 0.32

Total 1.00 3.29 3.46 2.88

(COMPETITIVE PROFILE MATRIX) CPM


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BCG (HP division)

ID SEGMENTS

REVENUE%

PROFIT % GROWTHRATE %

MARKETSHRE %

A ESS 19 2 11 0.8

B HPS 17 20 8 0.1

C SOFTWAR

E

1.4 5 14 0.6

D IPG 29.2 30 8 0.8

E PSG 32 42 -10 0.7

F HPHS 2.2 2 -14 0.2


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HP BCG Matrix

STARS C

A

IID

QuestionMark

I B

CASH COWSE

III

DOGS

IV F

Relative market share

In

dustrygrowthra

te

High Medium Low

1.0 .50 0.0High

+20

Medium

0

Low

- 20


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HP faces three problems:

upper-level management issues, which have affected thecoherence of firm strategy;

intense competition in the Personal Systems Group, whichhas seen declining margins and revenues in recent quarters;

A set of six disjointed business units, which dont currentlywork well together.

All of HPs major challenges and issues can be categorizedunder these three categories management, PSGunprofitability, and a lack of synergy among the six businessunits.


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Our solutions:

First, pay Meg Whitman enough to secure her role asCEO for at least five years;

Second, pare down the number of products in the PSGby focusing on fewer models of higher quality, including atablet and a smartphone.

Third, focus on synergy between business units and sellthe divisions that dont cohere with the whole.


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Respect employees, believe in the company byemployee is a sources factor that can lead to efficientteam work and innovation

Double R&D investments and strategic partnership tocreate new products and offer efficient services

Respect and loyalty to customer is a very important focusto sustain the company and keep the revenue growing.

hp casestudy final 20.5

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