STRATEGIC ANALYSIS OF

HEWLETT PACKARD CORPORATION

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

Introduction
Bill Hewlett & Dave Packard graduated in electrical engineering from STANFORD university in 1935. The company originated in garage in nearby Palo Alto,California,USA during a fellowship in 1939 with initial capital investment of us $538 Hewlett Packard company commonly referred as HP American multinational information technology corporation headquartered in Palo 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 and enterprise directly as well as via online distribution

VISION & MISSION

Vision statement

To view change in market as an opportunity to grow, to use our profit and our ability to develop & produce innovative products , services and solutions that satisfy emerging customers need
Mission Statement

To provide product, services and solution of highest quality and deliver more value to our customers that earn their respect and loyalty

Core Competencies
HP is showing a very strong core business in devices

(servers, PCs, and printers) across markets and geographies Their traditional device businesses are showing significant strength against their competitors

Internal Environment Scanning

Tangible Resources: The financial resources of HP are distinguished by their wealth of successful acquisitions and valuable partnerships. Their financial ability has also allowed HP to develop expertise in their supply chain and distribution channels. With collaboration of their own manufacturing equipment and by utilizing out sourced manufactures (OMs) HP has been able to develop high quality devices with efficient and accurate modes of international distribution.

Internal Environment Scanning

Physical Resources: Property, plant and equipment are another tangible resource of HP. The facilities are maintained for development and manufacturing. The company plans on reducing the number of core sites in order to decrease IT spending and alleviate real estate costs. Technology Technological resources of Hewlett-Packard are represented by a large patent portfolio.

Internal Environment Scanning

Organizational Structure and business plans. The structure of the company is broken down into seven segments. These segments are structured by activity. Basing the structure around activities or product groupings makes it easier for HP to focus on customer needs in each division, and market segments for different divisions. The disadvantage of having a structure based around activities is that some company functions may be duplicated.

Internal Environment Scanning

Intangible Resources Innovation Innovation has defined the success of HP. The culture of the organization has embraced the value of knowledge sharing. Human Resources HP has 324,600 employees worldwide while servicing more than one billion customers in 170 countries on six continents HP prides themselves on their corporate culture. They create an environment that celebrates individualism, but at the same time one that is also wholly supportive of teamwork.

Internal Environment Scanning

Intangible Resources Capabilities HP has the capability to deploy resources efficiently and manage an enterprise that operates with seven business divisions all of rich complexity and skill. Merging This capability is teamed with the companys fluent innovative expertise. In addition to acquisitions HP has had long standing partnerships with many of its market rivals. Core Competencies Multidivisional coordination, acquisition management and innovative collaboration.

External Analysis Using Porters Five Forces Model

Threats of New Entry Capital cost for entering into hardware and software market is not so easy. The high cost of developing the products forbids the new entrants 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 share pushing Acer right back into the third place

External Analysis Using Porters Five Forces Model

Threat of Substitutes The substitute for Hewlett Packard depends upon the product. The Substitutes for Personal Computers is an Apples ipad which operates in same interface

External Analysis Using Porters Five Forces Model

Bargaining Power of Buyers More than 20,000 brains of HP are serving 409 public sectors in 32 countries. 94% of fortune 100 companies, 95 out of 100 worlds largest 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.

External Analysis Using Porters Five Forces Model

Bargaining Power of Suppliers HP has the prominent supply chain in IT industry over 700 suppliers in production in 1200 locations globally. Some of the key suppliers of HP are Microsoft Corporation, Advanced Micro Devices, Intel Corporation, NVIDIA Corporation and Sony Corporation. Switching has not been possible with supplier like Microsoft Corporation which supplies the Operating System for HP products. Similarly with Intel Corporation and AMD both provide mother boards with specific specifications.

Problem Statement
Debt

The Company was one time in a series of debt for many years, which kept HP on the ground from investing in different business opportunities. Technical Problems One major problem and complaint from customers about the hardware supplies of HP was its touch pad. Lack of mainframe management The Open View's lack of mainframe management capabilities is a problem that affected the company overall performance.

SWOT ANALYSIS
Brand name
Low debt Wide range of innovative products Developing of own hardware and software Web technology used for product awareness & sale HP is a giant multinational company.

Strengths

Weaknesses
Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy Lack of configuration database

Opportunities
Expansion of retailed stores for
customer convenience

Threats
Competitors technology & pricing
low compatibility with non- HP product

Participation in joint venture

Make easy to use product for upcoming retirees Computer and cell phone software & hardware

Availability of substitute
Less global coverage than competitor

TOWS MATRIX

Strengths - S

Weakness W

1. Brand name
2. Low debt

TOWS MATRIX

1. 2. 3. 4.

3. Wide range of innovative products 4. Developing of own hardware and software 5. Web technology used for product awareness & sale

Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy

Opportunities O
1. 2. 3. 4. Expansion of retailed stores for customer convenience Participation in joint venture Make easy to use product for upcoming retirees Computer and cell phone software & hardware

SO - strategies (S1, S3,O1,) (must open new retail stores throughout the world to take advantage of financial strength) (S4, O3) (develop easy pc and cell phone for old generation) ST strategies
(S4, T1)

WO strategies (W1,W5,O2) (develop new HR policy in order to retain human capital by taking advantage or other firm management )

Threats - T
1. 2. 3. 4. Competitors technology & pricing low compatibility with non- HP product Availability of substitute Less global coverage than competitor

(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 other companies software and accessories)

WT strategies (W1,T1) (give attention to management consulting division to have more focus on technology improvements)

Direction strategy
Critical Region:
ST Managerial Decision: Market development Horizontal Integration

(COMPETITIVE PROFILE MATRIX) CPM

Critical success factor weight Rating Innovation Management Technology Financial Position Market share Customer loyalty Brand name Pricing Product Quality Compatibility Promotion Total 0.11 0.08 0.12 0.10 0.09 0.10 0.11 0.11 0.09 0.10 0.08 1.00 2 3 4 4 3 4 2 4 4 2 3 Score 0.22 0.24 0.48 0.40 0.27 0.40 0.22 0.44 0.18 0.20 0.24 3.29 Rating 4 4 2 3 4 3 4 3 3 3 2 Score 0.44 0.32 0.24 0.30 0.36 0.30 0.44 0.33 0.27 0.30 0.16 3.46 Rating 3 2 3 2 2 2 3 2 2 4 4 Score 0.33 0.16 0.36 0.20 0.18 0.20 0.33 0.22 0.18 0.40 0.32 2.88 HP DELL CANON

BCG (HP division)

ID A B C D E

SEGMENT S ESS HPS SOFTWAR E IPG PSG

REVENUE % 19 17 1.4 29.2 32

PROFIT % 2 20 5 30 42

GROWTH RATE % 11 8 14 8 -10

MARKET SHRE % 0.8 0.1 0.6 0.8 0.7

HPHS

2.2

-14

0.2

HP BCG Matrix
High +20 High 1.0 Medium .50 Low 0.0

STARS
A

Industry growth rate

II D
E

Question Mark

Medium 0

I
CASH COWS DOGS

Low - 20

III
Relative market share

IV

STRATEGIC RECOMMENDATIONS
HP faces three problems: upper-level management issues, which have affected the coherence of firm strategy; intense competition in the Personal Systems Group, which has seen declining margins and revenues in recent quarters; A set of six disjointed business units, which dont currently work well together. All of HPs major challenges and issues can be categorized under these three categories management, PSG unprofitability, and a lack of synergy among the six business units.

STRATEGIC RECOMMENDATIONS
Our solutions: First, pay Meg Whitman enough to secure her role as CEO for at least five years; Second, pare down the number of products in the PSG by focusing on fewer models of higher quality, including a tablet and a smartphone. Third, focus on synergy between business units and sell the divisions that dont cohere with the whole.

STRATEGIC RECOMMENDATIONS
Respect employees, believe in the company by

employee is a sources factor that can lead to efficient team work and innovation
Double R&D investments and strategic partnership to

create new products and offer efficient services

Respect and loyalty to customer is a very important focus

to sustain the company and keep the revenue growing.