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Hewlett-Packard commonly referred to as HP, is an American multinational information technology company whose headquarter is in Palo Alto, California, USA. It is one of the world's largest IT provider company next only to IBM and operates in nearly every country. The company was started in Packard's garage in 1939 with an initial capital investment of 538 USD. It was incorporated in Aug 18 1947 and went public on Nov 6 1957. The company mainly concentrated on making electronic test signal instruments such as signal generators, voltmeters etc from 1940-1960. As years passed on HP diversified its businesses into various other fields such as software production, testing, services sector etc. It is ranked 9 in the Fortune 500 list of companies in the year 2009.
It employed different steps of quality to ensure its survival and to be the market leader since its start from the 1930's. Some of the quality measurement steps HP took from the 1930's are:
The 1930's: The Company was founded in the year 1939.Bill and Dave formalizes their partnership and decides the name of the company with a coin toss. The total revenue generated was $5369 with just 2 employees
The 1940's: Hp build's first of its new building's and starts to manufacture several new products. As the company grows Bill and Dave introduce a new way of management style that becomes the basis of the HP's famous open corporate culture. One of the new concepts introduced by HP was the open door policy to create an atmosphere of trust and mutual understanding. It encourages employees to discuss any problems without having to face any adverse consequences. A companywide health insurance plan was introduced which was something unusual. By the end of 1949 Hp's revenue was $2.2 million.
The 1950's: In 1957 Bill and Dave decide to make the company a publicly traded company. The initial cost of the shares was priced at $16 per share due to which the revenues raised to almost 10 times. The head quarters built at Palo Alto was designed to attain maximum job satisfaction. The company makes its first acquisition of F.L. Moseley Company of Pasadena, a producer of high quality. The company goes global by establishing itself in the European market.
The 1960's: Hp enters the Japan market with collaboration with Yokogawa. The company develops the world's first desktop computer which brings in more investors. It sets up a research facility lab in1966 which became one of the world's leading commercial research centres.
The 1970's: In 1973 Hp became the first US Company to practice flexible working hours. With the launch of the first programmable pocket calculator Hp pioneered itself in the handheld systems.
The 1980's: HP introduces the Laser jet printer which becomes the most successful product of the company which was available to the public in masses.
The 1990's: Hp signs partnership agreement with EPA which enables it to use the energy star label, which proved its care for the environment. The launch of HP pavilion PC makes it more successful in the home-computing market. Hp again set a benchmark by choosing a woman who was an outsider to lead a top 20 US led company. The revenue of HP reaches a whooping $43 billion. It opens its own recycling facility and hence becomes the only computer manufacturing company to do it. In 1999 all the business not relating to computers, imaging and storage were separated to form a separate company called Agilent Technologies. This helped Hp to concentrate on what they were good at.
The 2000's: Hp opened hpshopping.com as an independent subsidiary to sell products to the customers directly online. This helped Hp to maintain a large customer database and interact with the customers and improve their services. March 2001 HP creates a new business unit HP services. With the launch of this business unit Hp made its presence felt in the services sector which was very much necessary as they had a wide range of products and outsourcing it was not a good idea. On May 3, 2002 HP acquires Compaq in a $25 million dollar deal. With the merger of Compaq, HP became a global provider of products and services and hence a global technology leader. A lot of acquisitions were made by HP during 2008-2009 which resulted in high revenues and a very large workforce.
Virgin Atlantic is a British airline which is owned by Sir Richard Branson's Virgin group which has 51% of the company shares. The head office is located in Crawley in West Sussex near London Gatwick airport. Some of the main destinations it operates from the United Kingdom are the Caribbean, Africa, the Middle East, North America, Asia and Australia with bases in Gatwick and London Heathrow airport. The type of vehicles it uses is the Boeing and the Airbus. In 2009 it carried more than 5.42 million passengers.
1984 - Foundational flight from Gatwick to New York.
1985 - Launching of Virgin Holidays and Virgin Cargo, it was the new stage of quality services, quality management and quality freight transport, and providing the variety of aggressively priced vacations to new locations.
1986 - Launching of a new route from London Gatwick towards Miami, and sleepers for first class were introduced, to give first class customers a very good and quality rest at night.
1987 - 1,000,000th passenger was on the flight, which called for a celebration.
1988 - Launching of routes to Orlando and New York.
1989 - Terminal opening of Virgin Cargo at New York; towards Tokyo, three flights a week service launched.
1990 - Launched defibrillators and staff to tackle cardiac arrested patients. Beauty Therapy was introduced for first class passengers in first flight to LA.
1991 - Launching of courier service on board, introduced seat back TV screens, awarded with most attentive Airline Award by Travel Trade Gazette.
1992 - Launched premium economy class, also launched special seats for child safety.
1993 - In first class cabin, it introduced snooze zone.
1994 - Opening of the route towards San Francisco, daily service was scheduled for Hong Kong.
1995 - Received Best Ground or Check in Staff award by Executive Travel Magazine, introduced O2FLY for lung and chronic chest patients on flight.
1996 - For first class, a drive through check in service launched, some new routes were introduced.
1997 - Check in facility for hand bags were available for all classes.
1998 - Some more new routes launched, courses for calming down during flights were introduced, children amusement products were launched, and new uniforms were introduced for the crew.
1999 - Routes opened towards Cape town and Shanghai, Double beds facility introduced for the very first time in flights.
2000 - In-seat Phones to earth service was launched, and some new routes introduced.
2001 - Strengthened cock pit doors and safety videos were introduced; also it was the first flight to Lagos.
2002 - First flight of A340-600 as a commercial flight.
2003 - Scheme related to passports for pets was introduced, suite for upper class launched, an award for giving value to employees was received from Business Super brands, some more new destinations introduced.
2004 - Some new routes launched to Bahamas and Cuba.
2005 - Developed Virgin Nigeria with Nigerian Government as a Co-owner. More new routes opened.
2006 - Selection of Sol arc for the fuel management of jets and became first airline globally to control hedging and procurement in fuel.
2007 - Virgin Media, Health Bank of Virgin, Virgin 1 Channel, Virgin radio Italia in Italy and many other incidents happened.
2008 - Virgin Healthcare was launched.
2009 - Virgin Money Giving was launched.
2010 - Launched Virgin Gaming for people to play all types of games, and also, Virgin Launched Virgin racing and team of Formula 1.
Main Argument of this Report:
In this report two globally recognized organizations are being discussed. The main argument will be about how these two giant organizations have incorporated quality in their operations over the years to become global leaders in their respective fields, what is their current strategy in using quality tools, what will the future strategy be, though being two totally different organizations in terms of nature of operations, are there any similarities/ dissimilarities in using the quality tools. All these questions will be answered in this report.
Arguments will be based on how HP is using the different types of quality methods to maintain its position as a global leader in information technology, as well as how it is using its available resources efficiently and effectively to satisfy its customers either in providing service to the customers or in manufacturing products for the customers. From this argument we will be able to find out the drawbacks in Virgin Atlantic's quality methods that led to its downfall from it being a global leader in aviation industry, which HP can avoid.
Comparison and Contrast:
Always offered high end quality products and best services with competitive prices.
Always offered highest quality to all classes at lowest cost.
Cost is always fixed.
Flexible enough cost.
Targets young generation for most of its products.
Targets price sensitive travelers in economy class.
First class products and services for high prices.
First class services at less than first class fares
It has four major goals:
a) To perform worldwide corporate marketing activities.
b) To foster the company's global technical community.
c) To invest in research and development to cope up with the ever changing customer requirements.
d) To lead the corporate development.
Not only to move customers from one point to another but to turn flying into unique experience.
HP won many awards such as top spot in Corporate responsibility Magazine's 100 best Corporate citizens list and was named world's most admired companies in 2010 by Fortune Mag.
VA was often distinguished for its quality and consistency and won many awards.
Hp's enterprise business provides services and builds everlasting customer relationships.
Provided additional services such as presence of beauty therapist or a tailor on flight.
Encourages sports and leisure activities for its employees.
Motorcycle rides to Heathrow for upper class passengers only.
Initially introduced itself as a hardware manufacturing company.
Initially aimed to be best economical airline for young people.
From both services as well as its products.
Mostly from business class.
Compulsorily should update employees for their achievements and failures.
Proper guidance from senior managers regularly.
HP today promotes itself as not just hardware and software supplier but also full range of services to design implement and support IT infra structure.
Buyer's price consciousness of Corporate travel and the increasing service expectations of travelers.
Quality staff by paying competitive salaries..
Quality staff regardless of low salaries paid to them.
They followed the unique HP way which had following tenets:
a) Trust and respect for individuals.
b) Focus on high level of achievement and contribution.
c) Achieve common objectives through teamwork.
d) Conduct business with uncompromising integrity.
Encourage the employees individually.
Hp was busy with new acquisitions.
Maintained its labor force and recruited 2602 employees.
Company always welcomes new ideas from employees.
Many suggestions from employees were implemented and are given importance.
Competitor was IBM.
Competitor was British Airways.
All customer complaints are dealt with at the same time in the same manner.
For upper class, within 24 hours and for economy class, within a week
Reach of the company Globally
Presence of its products in countries where the company is not officially present.
Long Haul routes
Hp had made its own Culture in its working environment and had named it "THE HP WAY"
There was no such thing in Virgin Airlines.
All the Hp campuses are eco friendly campuses with greener environments.
Virgin does not practice this kind of Campuses.
There was information leak of Hp's long term strategy and was published as a Cheat article.
Virgin Atlantic faced the Dirty tricks controversy from British Airways.
Brand and Legacy
Hp has many sponsorships like that of Disney's mission space, EPL club, Formula 1
Virgin Airlines did not officially sponsor any such major events or sports activities.
Analyzing the Differences:
It has a Global presence.
Acquisition of well established companies gives a boost.
It has a leading market share.
Presence of large number of employees who are competent.
Presence of cutting edge technology.
Lack of new products.
Limited service offerings.
The concept of its famous HP way under extinction.
Internal problems in operations at higher levels.
Taking decisions against the stakeholders.
Establish in all the countries.
Innovate new products on par with its competitors such as Dell, IBM.
Diversify from just being a laptop/desktop manufacturer to entertainment products like music, mobiles etc.
Make its products available to all customer segments.
Increase the number of customers.
Entry of new competitors such as Asus, brother etc.
Negative changes in Demographics.
High expectations from customers.
Strict government laws.
Virgin Atlantic is 2nd largest airline of Britain, providing quality services to its customers.
It includes, entertainment, comfort and after sales services, low fares, long-haul routes and constant improvements and feedbacks from customers to improve quality.
It is differentiated based on fares, quality service and diversity; providing special services for special requirements of customers.
Virgin focuses first class passengers more than other classes.
Most of the services are for first class,
Focused market segment is mostly London
It produces no account and yearly reports.
Targets business class and does not properly exploit its alliances.
Virgin can go for further partnerships, more options of gaining customers.
Can increase its destinations because of around 280 airports in Europe
Anti-trust legislation problems for the growth of airlines,
Threat of terrorism because of increased airlines,
Price visibility because of E-commerce, video conferencing technology is decreasing distances and customers do not require traveling.
Difference in the quality assurance and philosophies between Hewlett Packard and Virgin Atlantic.
HP maintains a unique corporate culture called the "HP WAY". HP believes the company's success depends on the employee satisfaction. HP wants to be known as a company that
a) Is known for innovation.
b) Is contributing to the community in a positive way.
c) Employees can be proud of.
d) Believes in respect and integrity.
The company believes in providing long term employment to people. It aims at developing and supporting their employees at every level of HP. The punch line "Everything is possible" shows the confidence it has in its employees who change ideas to reality. Its Philosophy is fueled by momentum, challenges and rewards.
The timeline Virgin Atlantic clearly shows the quality, as the Virgin Atlantic added more services it improved its services. The only philosophy of VA was to provide good quality approach which would make people to use this service and also it forced people to connect to stay connected to Virgin Atlantic airways, this process has not stopped, as the time is passing through, the quality is enhancing with respect to the addition and improvement of services in Virgin Atlantic.
Before any products or software applications of HP are released they undergo a stringent testing under production load in an authentic environment to check the performance and to provide the same quality throughout all its products to achieve maximum customer satisfaction. Same is the case with the services they provide, the employees are trained to perfection and each one undergoes a User Acceptance Test to qualify for a position that deals with customer relationships. This ensures the same quality of service throughout the world.
VA ensures that it provides maximum safety to its customer and crew. They ensure they provide the best quality in every aspect of airline travel including food, however it faces a lot of problems to provide the same quality throughout as it solely depends on the crew. Hence the nature of service they provide will definitely depend on the mood of the crew.
Impact of the Differences on Innovation, change and competitiveness:
In today's competitive environment enterprises must excel in innovation in order to succeed. Innovation is about creativity at HP. HP believes in creating the best of tomorrow today. It gets to know its clients business and strategic goals to make it happen. Innovation is applied at HP to improve its existing products and services. HP believes that Innovation is not only about inventing new products and services; it is about developing creative processes and thoughtful partnerships, which is very hard to find in Virgin Atlantic as VA has always believed in competition rather than building partnerships. For VA innovation is only about developing new techniques to satisfy its customers which are not enough for an organization to succeed whereas HP focuses on following key areas such as Solving Enterprise issues, Providing industry thought leadership, Improving products and services, Creating competitive advantages, Improving access to information.
As the company adapts to new demands it must deal with increasing complexity and volume of changes. HP makes more informed change decisions based upon business impact which helps to increase efficiency and agility enabling more changes. As for the working culture of Hp is concerned it would never change as it has inherited from its founders and it believes it the best while Virgin continuously brings changes to patterns and services and the provision of services because it has to maintain its rank while HP invents.
There is a stiff competition between companies and national economies around the world which has resulted in HP to develop new quality measures to remain a global leader such as Encouraging a climate for sustainable growth, investing in innovation and R&D, Investing in future jobs and education by which it always tries to do something new and always succeeds, while VA has maintained its quality in terms of competitiveness and reduced chances of achieving the top spot in its business.
Recommendations in terms of Innovation, change and competitiveness:
HP should lower the costs of its products and services which will help to grow its market share.
It should invest in long term competitiveness.
Spread in many countries worldwide, it must have better control of its infrastructure.
Increase the incentives and rewards to employees who focus on the customer to deliver their objectives.
It should diversify, from just being the computer manufacture/service provider to other interesting areas such as music, mobile phones, security systems, etc, from being the leader in printers to leadership in printing.
It should make more acquisitions of companies who are market leaders in different fields.
The declining HP way should not be left to disappear as the company has reached to this position based on this concept and it will surely help in future also.
Hp must become an integral part of core service provider companies such as VA to dominate in the service sector by providing them technology.
HP should focus on its R&D, HR, supply and customer care in the countries where it is not physically present.
Much care should be taken while electing the top level management such as CEO, President, who can handle such a large organization as even a small mistake from their side, will affect the company image.
It should make products that can match the ever changing customer needs.
It should not depend on a particular product or service, such as it depended largely on HP Pavilion notebooks which can be a big risk.
Virgin Atlantic should work with collaboration, with its alliances and partners properly, instead of giving them less importance.
It should grab the Asian markets, in order struggle for being number one airline of Britain.
It should start producing annual reports to be transparent with customers.
HP, since its incorporation in 1947 has faced number of challenges either internally or externally and competition from its never giving up competitors has always come up high in value because of the quality measures it had taken in its initial stages from its founders which went on to keep them with modifications when and where necessary for the betterment of the company. Hp diversified itself at different stages and still managed to excel as it had made a brand image for itself for providing the best quality products and services. Virgin always aimed at providing and improving its services to a particular segment of customers, as a result it has remained in the same spot as it was a few years ago, Infact declining in terms of revenues and its diversified products and services such as Virgin music are also not doing that well