Business Strategy of HP Company

7 Pages   |   1,252 Words

HP Case Study Task

 

Table of Contents

Business Strategy of HP. 3
Impact of Senior Management at HP. 4
SWOT Analysis. 4
Strengths. 4
Weaknesses. 5
Opportunities. 5
Threats. 5
Financial Position Analysis. 5
Recommendations. 6 
 
HP Company Overview

Hewlett- Packard (HP) Company is a U.S based business with its operations over spread over 170 countries that provide products related to technology and software packages to different customers that are the households and small & medium sized corporations (Forbes.com, 2013). The company competes in various sectors that are grouped into seven major categories of Personal Systems Group, Imaging and Printing Group, Enterprise Servers, Storage and Networking, Software, Financial Services and Corporate Investment (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013). The other services include computing devices, outsourcing, application management and other printed related solutions (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013). The different customer segments include both the commercial and consumer segments and cater for the provision of various hardware and software along with technological devices. The HP’s enterprise service system largely caters for business organizations. The financial services like hire purchase and leasing is specially catered for the educational and governmental set-ups (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013)

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Business Strategy of HP

According to Larry Dignan in his article,’ Hp’s New Strategy’ published on March 14, 2011 describes that HP heavily relies on the cloud technology. CEO Leo Apotheker claims that HP will base its business majorly on cloud technology, data management and security information. HP’s strategy also involves a partnership with various transactional operations. HP aims to provide businesses with value related to its software interface of WebOS (Dignan, 2011). HP further has collaborated with various organizations like US Department of Veteran Affairs to provide for software solutions. Similarly, it signed a contract with BMW group to provide for technological services (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013). HP is also aware of its position in the IT market whereby annual expenditures increase every year due to high demand for IT services. The business strategy also involves HP’s corporate social responsibility whereby the collaboration took place between Central Logic and HP to provide health care facilities to the patients at low costs (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013).

Impact of Senior Management at HP

According to the article ‘Can Meg Whitman Reverse Hewlett- Packard’s Free Fall?’ written by Ashlee Vance and Aaron Ricadela published on January 10, 2013 in Business Week discusses the HP’s fourth Chief Executive Officer, Whitman and her past career before joining HP. Whitman stayed in politics where she faced a struggle for a $150 million campaign after passing some of her life in politics (Vance & Ricadela, 2013). HP faces crucial situations due to the stagnant sales of HP desktops and printers and Whitman used her farsightedness and claimed that she can turn things better for HP; however, it will take a period of five years to recover (Vance & Ricadela, 2013).
According to the article’ Hewlett- Packard Makes its Move against IBM in Big Data’ is written by Aaron Ricadela and Sarah Frier is published on June 20,2013 in Business Week that further discusses the stance of Whitman of managing a situation in which 29000 job cuts were made along with a fall in revenue (Vance & Ricadela, 2013).
Moreover, the senior managers can be a source of success to the company due to numerous skills that they possess of which are being a; disturbance handler, change driver, creative thinker, mobilize, entrepreneur and a strategist (Appelbaum & Paese, 2000).

SWOT Analysis

Strengths

According to the Global Report 2013, HP’s strengths include that it assumes the position of the market leader with a diversified portfolio. HP is known as the pioneer of Personal Computer (PC) market and the second largest company for rendering servers. It is ranked after IBM in providing technological solutions and attained the position of Number 10 in Fortune magazine ratings (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013). HP further supports 130 stock exchanges and 200 banks in the world (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013).

Weaknesses

However, HP’s has its weakness in the areas of scandals and manipulation activities. HP has to bear pressure on its reputation due to insider trading issues. Another issue that HP faced was the blame on its printers that can allow hackers to access private information and is defected. Furthermore, HP has faced financial issues whereby the HP desktops faced a slump in the profits by 10 percent in the year 2012 and let to job cuts (Ricadela & Fier, 2013)

Opportunities

HP stance on signing contracts with BMW, US Department of Veterans Affairs, Central Logic and Sabre helped to convert its weaknesses into chances to restore back goodwill. HP reaped exorbitant amounts with the joint ventures which also facilitated its own products promotion of HP Elite Book Revolve Note book and software solutions (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013).

Threats

Dynamic technological change affects the business strategies in developing new products. The era has extended beyond HP desktops to smart phones and tablets, and it is important to change the business strategies accordingly. Moreover, HP decides to succeed in cloud technology; however, it faces cut throat competition from IBM, Cisco and EMC (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013).

Financial Position Analysis

According to the Global Report 2013, the financial position has been shown as follows whereby the fiscal year 2010 has been the most lucrative year in both revenue and net income generation. Although in 2011, revenues rose but due to uncontrolled expense net income fell that had further repercussions in the following year of 2012 whereby the net loss incurred that posed grave situation for HP to combat (Hewlett-Packard Company- Financial and Strategic Analysis Review, 2013). Similarly, Wall Street further predicts that net income for the year 2015 will remain at low levels (Ricadela & Fier, 2013).

Source: Hewlett-Packard Company- Financial and Strategic Analysis Review (2013)

Recommendations

According to the Global Report, 2013; HP have already stepped into the aspect of innovating products and one example is of its HP Elite Book Revolve. Similarly, HP should continue to work on its joint ventures like that of partnering with Emirates Airlines with the use of HP Elite Pad 900. Furthermore, there is a need to be a centralized focus on the management of cloud technology and to be in consensus with former established cloud technology service providers, SAP and Oracle. Collaborations can further foster HP’s position and goodwill in the market. One of the threats that HP faces is the new technological trend, and it needs to adjust the operations in such a way that it can help digitization of information to prosper.
 
References
Appelbaum, L., & Paese, M. (2000, March 12). What Senior Leaders Do: The Nine Roles of Strategic Leadership. Retrieved January 16, 2014, from ddiworld.com: https://www.ddiworld.com/DDIWorld/media/white-papers/WhatSeniorLeadersDoTheNineRoles_wp_ddi.pdf?ext=.pdf
Dignan, L. (2011, March 14). HP's New Strategy: Public Cloud, Analytics, Big Data Appliances. Retrieved January 16, 2014, from Zdnet.com: http://www.zdnet.com/blog/btl/hps-new-strategy-public-cloud-analytics-big-data-appliances/46061
Forbes.com. (2013, November 25). HP Earnings Preview: Decline In Revenue Is Likely Abating. Retrieved January 16, 2014, from Forbes Magazine: http://www.forbes.com/sites/greatspeculations/2013/11/25/hp-earnings-preview-decline-in-revenue-is-likely-abating/
Hewlett-Packard Company- Financial and Strategic Analysis Review. (2013, March 27). Global Data Report , p. 12.
Ricadela, A., & Fier, S. (2013, June 20). Hewlett-Packard Makes Its Move Against IBM in Big Data. Retrieved January 16, 2013, from Busnessweek.com: http://www.businessweek.com/articles/2013-06-20/hewlett-packard-makes-its-move-against-ibm-in-big-data
Vance, A., & Ricadela, A. (2013, January 10). Can Meg Whitman Reverse Hewlett-Packard's Free Fall? Retrieved january 16, 2014, from Businessweek.com: http://www.businessweek.com/articles/2013-01-10/can-meg-whitman-reverse-hewlett-packards-free-fall

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