Strategic Management Process within the Global Environment
The HP or Hewlett-Packard Company is one of the biggest computer companies in the globe. It was established in the year 1939 by William Hewlett and David Packard. Its first product was an oscillator which was used for measuring sounds. In the 1966, HP entered into the computer field with the design of the 2116A which was designed to analyze and gather the data produced by the HP instruments. It has continuously increased its products coverage as it is depicted by the fact that it currently sells over 10,000 different products in the computer field and electronics. This research paper is going to focus on the themes namely; my impression on the operations of the HP, the HP SWOT analysis, the competitive advantage and competitive strategies of the HP, the value chain of the HP integrity servers and other strategic alternatives which are open to the HP (Pcmag.com, n.d).
Personally, I am not impressed with the operations of the HP. This is because it has very poor customer services. For example they are not responsive to the customers needs. This is because they cannot solve some crucial technical problems. For instance I purchased a HP 1219 printer which was replaced four times. This printer still has some problems because the drivers are not functioning appropriately. Many people have also complained about this kind of problems but the technical staff still remains clueless. Again, every time I call to report this printer malfunctions am always told that it will be addressed after two or three days but actually the technical staff takes more than even a week to come to my home to fix the problems.
Large in size
Large market share
A strong financial base
Low debt levels
Excellent product portfolio diversification
Market leader in inkjets and laser
Study brand equity
Poor brand recognition
Low marketing speed/responsiveness
Lack of key competencies
Low profitability sue to low sales volume and high production costs
New market venture providing the opportunity to expand customer base
Customer satisfaction-high demand
Capitalizing on emerging technologies
Slow market growth
Competition fro emerging companies
Changes in tastes and preferences
Unfavorable demographic changes
Heightened consumer expectations
An in-depth explanation of the SWOT above is provided below.
One of the strengths of the HP company is its size. This is because after it merged with the Compaq it became the world’s largest computer peripherals and hardware company in the world. The other strength is that it renders its service and products into more than 170 countries including the undeveloped and the developed nations. The next strength is that it dominates the market for printers (laser and inkjet) for the consumers and also for the companies using the economies of scale. Again, it generates around d $6.1 billion in cash from its operations and also it has increased its cash equivalents to over 3 billion (financial strength). The other strength is that it has low levels of debts therefore making it easier for it to increase its investments. The HP has always diversified its product and this has propelled its survival in the recession times (Oppapers.com, n.d).
HP Company has some weaknesses alongside its strengths. For example there is poor brand recognition. This is because some of its products are not known or even used mainly in the developing and undeveloped countries. Another weakness is low marketing speed or responsiveness. This is because the company doesn’t market its new products with the appropriate urgency and again the technical team does to attend to the maintenance services required appropriately. Another weakness is that it lacks key competencies. The company is also experiencing low profitability due to low volumes of sales and high production and operation costs. Another weakness is that of limited products. This is because the company doesn’t produce some products whose supply is less compared to their market demand.
Some of the opportunities facing HP market include the potential to increase the customer base. This is because it has moved into the new markets. Another opportunity is market diversity because the company y has continually been producing new products into the markets. Another opportunity is customer satisfaction. This is because when the needs of the customers are satisfied there will be high demand hence high sales resulting to increase of the company’s profitability. The company also has the opportunity to capitalize on new technologies. The innovation of other devices such as the mobile printing boosts the sales of the company and also stabilizes the company’s competition with other companies. The other opportunity is the acquisition of other organizations. The HP can acquire the other smaller computer companies which are failing therefore increasing its market base. Another opportunity is the increase of the customer satisfaction. This is because increased customer satisfaction can lead to increased sales or demand and therefore increased profitability.
There are various threats facing HP company. One of them is decreased customer demand. Lack of demand leads to low volumes of sales hence low profitability. Another threat is the slower market growth brought about by lack of responsiveness and low marketing speed. There are also emerging companies which are posing strong competition to the HP market base and even the competition from old competitors is surging. Another weakness is the customers’ changes in tastes and preference whereby the demand for some goods is going declining. Another threat is the adverse demographic changes. This is because increased population will call for new technologies and even high demand of goods whereby the company may not have the capacity to match such needs. Another threat is the heightened consumer expectations. This is because many consumers expect a lot from the company’s products and services and the company may not have the capacity to meet all this expectations.
Competitive advantage refers to the superiority achieved by a firm when it is in a capacity to provide goods of similar value to its competitors though at a lower price. The Company can also charge higher prices which are accompanied by greater value as a result of differentiation. Competitive strategy refers to the moves by a company to attract customers, withstand any competitive measures and to strengthen the firm’s market position. HP has a competitive strategy and advantage (Csuchico.edu, n.d). This is because it has competitive strategies that sustain the competitive advantage. This strategy is the maintenance of the critical opposites. For example you will find that all companies have almost the same stated values. However, HP unlike the other companies takes its values seriously. This is because the values are treated as the management tool. The seriousness of the values is depicted by the fact that they are not spread through sloganeering. However, they serve as the criterion for decision making and advancement (organizational culture). Another competitive strategy in HP is the integration of the critical opposites whereby unlike the other companies HP creates an environment that appreciates individualism but at the same time remains supportive to teamwork. This is because HP promotes cross-functional teams and also rates performance according to personal achievement and decentralized business units.
HP has also broken down the barriers of communication by fostering knowledge and skills needed when solving the existing problems in the company. It also possesses corporate capabilities whereby the company has distinctive capabilities which cannot be copied by other companies (competitive advantage). Another competitive strategy adopted by the HP model is the creation of the customer centric model whereby its innovations are customer driven. This is because they stay close to customers, listen to and also partner with them with the aim of creating superior customer value. HP has also founded some very strong brands which are intangible to competitors (competitive advantage). It has also formed partnerships with other companies NGOs and multinational companies whereby competitors have no chance or opportunity.
Value chain refers to the sequence of activities a company adapts to design, produce, and market, deliver, and support its product or service. In other word it means a collection of activities that are linked together and add value which converts inputs into outputs and helps create a competitive advantage. For a particular product, a value chain consist of; inbound distribution, manufacturing operations, outbound distribution, marketing and selling and after sales services. Value chain analysis is the activities an organization uses and puts it in a competitive position. It describes activities within and around an organization and compares them to the competitive strength of the organization. Hewlett-Packard provides integrity servers which are reliable and satisfying its customers and working in the interest of the environment, other stakeholders, communities and employees (H20338.www2.hp.com, n.d). To ensure HP stands on top of the market, Hewlett-Packard has a wide team of employees in different countries of the world in ten different languages. Integrity servers from HP offer business and social use solutions. HP ensures its products are environmental friendly, and quality to satisfy its customers and accomplish their tasks. The servers provide a mission-critical infrastructure, from entry-class to superdome. HP can also lobby massive advertising for these servers to enlighten the people about the present of this quality product in the market and how it would change their lives positively. Another strategy is to add functionalities to the HP integrity server so that users feel more satisfied when using the product and increase their sales volumes.
One of the alternative strategies available for the HP is the focus and executes strategy. This is because the HP has the ability to achieve great profitability by focusing on high imaging and printing and also the high –end kind of services. The other strategy should be customer focus. This is because it has many innovations and also many old products. For a company to have a stable market, the needs of the customers should be firsts in consideration for they form the foundation of any business meaning. Without putting them into account, a business is doomed to fail.
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