Hewlett-Packard Case Study Introduction
Hewlett-Packard Company is an international company incorporated in the United States of America as an information and technology company; it is one of the world’s largest technology company with its headquarters at Palo Alto; California.
It is involved in the business of developing hardware, software, computing, printing, and digital imaging; in terms of sales, it is ranged world’s second largest company in sales volume of desktop computers, servers, peripherals, and services. Other than the personal and corporate computer devises, it also makes other computer preferential devises like the printers (HP Official website, 2011).
Hewlett Packard History Timeline
The company was incorporated on August 18, 1947, by two friends; Bill Hewlett and Dave Packard who were graduates in electrical engineering from Stanford University; on November 6, 1957, the company was register as a public company. Since its incorporation, the company has been performing well and recording a profit and technological development.
Despite global financial crisis of 2007, HP was able to make a profit of $115 billion in 2009; the largest position of the amount came from sale of hardware devises but services offered about $40 billion of the profits.
This was a 100milion increase from the one reported in 2007, which was $104 billion in 2008 the company was the number one producer and seller of inkjet, laser, large format and multi-function printers market, and hardware’s.
There have been major changes which of late include in 1999 a spin-off of part of its business as Agilent Technologies. In 2008, there was yet another acquisition where EDS was taken over by Compaq company in after the successful deal, the net worth of the combined companies was US$ 118.4 Billion in 2008; in the following year, the company was ranked nine by Fortune 500.
In November 2009, there was another acquisition of 3Com; despite after the completion of the deal, the next target was Palm Company which was completed in April/May, 2010 at $1.2; the acquisitions where part of strengthening the companies operating base and improvement of services.
Of the sales recorded the company records over 85% of its sales from sales of computers; about 50% of the company’s sales take place outside the United States; some of the main competitors of the company are Lexmark International, Inc.,apple Computer, Inc., International Business Machines Corporation, Dell Inc., and Toshiba Corporation (HP Official website, 2011).
Hewlett Packard SWOT: Strengths
The company already has a strong brand name in the computer world; with the strength within and outside the United States; the strength has enabled it to develop appropriate infrastructure, personal computing and access devices, global services, and imaging and printing services. The diversification that the company has been able to attain offers it with an ever increasing sales and competitiveness. Other than the company itself, the companies that it has acquired are also doing well. With this even after introducing the new products, it will be easier for it to sell.
There is the expertise that the company boosts of. This again is the one gotten from the acquired companies and the one that it has developed over the years. Using this, the company should come up with measures that are aimed to counter competition by offering quality to the clients. The name and the market structure of the company is strengthened by its effective management team who are able to make intervention on products, services and the general approach of the company.
The company has created an environment of greatest dichotomy that seems to support individualism, however the ideology and philosophy of the company supports a high sense of collective responsibility and team work (HP Official website, 2011).
Hewlett Packard SWOT: Weaknesses
In attempting to counteract the market forces of demand and supply brought about by the advanced technology, myriad of challenges may be encountered on the way. Competition in the industry is high and calls for continuous improvement which is a costly exercise; of late the innovations made by Apple Inc. are one of the challenging issues that the company has; there is much competition in the industry.
Another area of inevitable weakness is an expansion plan which entails diversifying the level of the company activities. This may take different forms. A critical look at geographical expansion depicts a glaring possibility of other stringent market uncertainties. Right at the onset, strategic planning will demand strategic resources, both human and financial, to make any significant move.
Besides, implementation of the proposed market research will require mutual consent from all the affected divisions in the company. This will not only consume time as decisions are being made, but a lot of uncertainties abound especially on the verdict of the company (Varadarajan, 2010).
Products and services
HP is involved in information and technology business where it offers products and services in the line; with time the products and services keeps changing and improving to meet the demands of the people. The products by the company can be divided into five major areas as:
Computers, Desktops, Printers & Imaging Products Printers & All-in-ones Workstations, and laptops
The company makes desktops, laptops, monitors, and central processing units; with the demand so the customer as well as the level of technology, the company ensures that its products are commensurate to the prevailing situation.
There are some simple computers and laptops used for house works and general office work and at the same time there are some complex machines used for programming and in management of large business institutes.
The company is in the business of making printers, fax machines, toners, and other accessories to be used with the products or similar products. When making the different products the company ensures that it meets the current level of technology and the expected quality.
Smart-phones, Scanners & Fax, Ink, Toner & Paper & Handhelds
HP recognizes that the world is taking another route in technology. Respect to this, the recent acquisition of Palm is seen as a strategic move towards this recognition. The era of personal laptops and desktops is slowly coming to an end and replaced by the smart phone.
This is in the efforts as the people seek their independence with time. Palm Company was/ is the producer of Smartphone’s powered by the Palm webOS mobile operating system. This acquisition will help the company to be in a position to participate in the fast growing mobile technology market in the world.
When the company merged with Palm’s, it got the chance to use unique technology by the company called webOS and other informational sharing strategies; other than the technology that the firm will come with, there will be the increased sharing of the human resource personal that the two companies have. This merger is seen as the way that the company is using to venture in the world mobile market.
To venture here there is the need to have the software and the technology that you need incorporated. Very soon we hope to seen smart phones of the Brand of Hp. When reporting on the merger on April 28, 2010 Todd Bradley, executive vice president, Personal Systems Group, HP said, “Palm’s innovative operating system provides an ideal platform to expand HP’s mobility strategy and create a unique HP experience spanning multiple mobile connected devices.” (Anon, April 28, 2010).
Analyzing the merger from a different angle, it is seen as a way to curb competition; Palm Company was one of the companies that was offering HP competition. Before the above acquisition /merger, the company was positioning itself for the future; what is doing is the development of smaller and smaller (but more efficient) computers. It was initially the Thin film Transistor (T. F. T.) Desktops, then to a less heavy laptop and finally the notebook computers the notebook for instance can fit in the hand bag and more efficient to carry.
Services
HP has a number of services that it sells to their customers; they include computer operating systems and other business related software. Some of the software produced by the company includes enterprises resources software.
In the case a corporate customer is in need of maintenance of their computers, the technical team is used to offer the service. Other services by the company include business outsourcing, IT infrastructure outsourcing, transformational application as well as offering business support services to demanding customers.
Hewlett Packard Market Analysis
Development in technology in different parts of the world where HP operates offers the company a market and window to sell its products. Depending with the segmentation, the population, the technology and the strength of its competitors, HP makes strategic marketing interventions to ensure it remains the choice of majority.
Marketing research and development of the company
Before developing a marketing strategy, the first thing that the company embarks on is analyzing the current position that it has in the world market. The strategy that the assist the company to analyze itself in two dimensions; market share and Market Growth; when the position has been learnt, then the decisions on the way that the company should adopt should be put in place. Marketing policies have two main agenda as:
- Retaining the existing companies customers and growing the market
- Entering the new venture market and become competitive
After the analysis HP takes an analysis of the internal strength, opportunities and threats offered by the market; strength of the undoubtedly be engineers internal managerial mechanisms. In order to have a competitive edge in selling its product and services, it is advisable for the company to take advantage of its ability to compete favorably with equal players in the market.
A strategic marketing plan is the only way out. Through this arrangement, the company should be able to adopt different modalities and outreach programs of reaching out to its consumers.
In a market mostly controlled by price levels rather than quality, it will be an open strength for the company to explore more on quality than price. In retrospect, strategic marketing plan should be in a position to explicitly document the various channels that can be used by the company to allocate more resources towards improving quality (Hsuen-Ho & Jia-Wei, 2010)
Market segmentation and Target market
To ensure that the company meets demands of different category of people, the management divides the marketing using three parameters as demographics, economic situation, location/place, and price.
Generation Y is fast adjusting to current technology and they are willing to adopt the nest high technology that is affordable. On the other hand, the older generations are more likely to be interested with basic product that will meet their demand. Depending with the component and the strength that a certain machine has, the cost follows suit.
The approach ensures that the company can produce products of high quality and be able to sell them at an affordable price; the research and development center ensures that there is high innovation and invention to make the company’s products the products of choice by customers.
Customer relationship management program
HP operates one of the world’s most successful customer care service, the service ensures that customer complaints are well handled and addressed with immediate effect. Other than addressing customers issues, the department are involved in offering corporate responsibility tasks that are aimed at improving customer relations and improving their strategies (Constantinides, 2006).
Strategy and Implementation
As much as the company can be commended on its advertising models, the use of online advertising should be increased. This is for the old business and new venture; there are many advantages that come with online marketing and advertisement; in the hard economic times and the opening of regional and international trade.
One of the remedy that have been proposed, to try and fight global financial crisis is the enhancing the international trade. This trade will be enhanced at low costs if online marketing is embraced by both the trader and the customer. The education level that the world is continuously undertaking will also be another boost.
The growing population of the youth who are finding the world with the technology in place is more likely to adopt it. Despite the growing need and the advantages that come with the mode of advertising, there is the population that the mode of advertising cannot cater for at any one time, thus a blend of the two is required (Vorhies, Morgan & Autry, 2009).
On the other hand the new venture of the mobiles is not the core business of the company; it should not be misinterpreted to get the major focus of the company. The company should then embark on campaigns to gain an increased customer loyalty and building a strong brand name. The only way that this can be attained is by adopting more and more technology advancement.
The more efficient the company will become the more the demand for its products. Innovation is the way forward that the company should adopt in its efforts to ensure that the customers remain loyal. There is also the simplification of the computer devises. The laptops and the desktops should be made as simple as possible to carry around or keep in the ever reducing office/ home places.
In this the users will not see it as a burden and can still prefer them. The other way that the company can keep afloat in the changing business environment is the diversification of business as well as recognizing other areas of business.
This has been seen through the mergers that the company has of late, as discussed above the merger with 3Com were deliberate measures that were targeted to get in the Chinese market. In 2002 with Compaq Computer Company, this was another way of neutralizing the competition as well as to get more and more customers.
With current competition, HP should consider adopting the “blue ocean theory” of sales and marketing. This is a recent theory that was developed in 2005 by W. Chan Kim and Renée Mauborgne of The Blue Ocean Strategy Institute, the theory focuses on target of the untapped markets instead of focusing on the already populated area.
The main concern and advocacy of the theory is that there is always a niche market that is not fulfilled by current market situations, thus a company needs to venture in thus areas more than the concentrated ones. By areas, the theory is of the option that it can be physical location or can be a market niche that needs are not met by the prevailing condition (Bell, 2011).
HP Case Study Conclusion
The success of HP as the second largest information and technology firm in the world can be attributed to its effective management team and orchestrate team. The management makes strategic decisions when to ensure that the firm remains competitive in the fiercely competitive world.
Research and development team is mandated with the task of advising the management on the best products and services to offer the market; the department works closely with sales and customer service to incorporate customer needs and demands. To improve their market volume, the company should use strategies advocated by Blue-ocean theory; the approach focuses on establishing niche markets instead of concentrating with highly concentrated markets.
References
Bell, K. (2011). Blue Ocean Fiction. Harvard Business Review, 89(5), 142-143.
Constantinides, E. E. (2006). The Marketing Mix Revisited: Towards the 21st Century Marketing. Journal of Marketing Management, 22(3/4), 407-438.
HP Official website.(2011). Hewlett-Packard Company. Web.
Hsuen-Ho, H., & Jia-Wei, T. (2010). A Model of Marketing Strategic Alliances to Develop Long-Term Relationships for Retailing. International Journal of Business & Information, 5(2), 151-172.
Varadarajan, R. (2010). Strategic marketing and marketing strategy: domain, definition, fundamental issues and foundational premises. Journal of the Academy of Marketing Science, 38(2), 119-140.
Vorhies, D. W., Morgan, R. E., & Autry, C. W. (2009). Product-market strategy and the marketing capabilities of the firm: impact on market effectiveness and cash flow performance. Strategic Management Journal, 30(12), 1310-1334.