Hewlett Packard popularly called HP is a company that provides technology solutions to consumers, businesses and all forms of institutions worldwide. The company later expands its operations to IT infrastructure, personal computing and access devices, global services and imaging and printing services. The company is known throughout the world by operating in more than 170 countries around the world. The mission of the company is to facilitate how technology and services can assist individuals and institutions in addressing their problems and challenges so as to realize their dreams. The company applies new thinking and ideas come out with basic and valuable experiences with the technology with her IT corporation headquarter in Palo, Alto, California, USA. The company has been maintaining a lead among her contemporaries due to the effective strategic planning of the company and this has been jealously guided by the company in virtually all her businesses.
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Background of HP Company
The initiators of HP Company are Bill Hewlett and Dave Packard who were classmates at Stanford Universities. They established the company in 1993, seventeen years ago. The first product of the company is called audio oscillators, an electronic testing instrument used by sound engineers. The product is developed in Palo Alto garage. Walt Disney studios were the first HP customers that bought a number of the audio oscillators for testing a new sound system. The company has gained enough popularity in so many countries of the world to have become the No 1 infrastructure support services revenue in 2003 among many world top support services providers.
HP as a company always rise to challenges when it comes to IT-related issues, this is manifested in so many ways, the company offers one of the tech world’s most comprehensive portfolios of hardware, software, and services. The products range from personal computers, servers, and sophisticated storage devices, variety of printers and series of networking equipments. Asides this, the service unit of HP still offers series of IT and business outsourcing, software application development, IT consulting, and other IT-related services. The company has produces series of software such as carrier-grade communications applications, information management business intelligence and enterprise IT management among others. The coverage of her business are covered in consumers, business, government agencies and educational organization and such has been spread to more than 170 countries of the world. HP as a company believes so much in working towards achieving her set objectives and that has been the corporate values shared by all the employee within the organization. This is confirmed by the quotation of Dave Packard, co-founder of HP as follow:
“It is necessary that people work together in unison toward common objectives and avoid working at cross purposes at all levels if the ultimate in efficiency and achievement is to be obtained.” – Dave Packard
The company has always been careful in following the pathways to achieving its set objectives based on the organizational values.Table 1 below summarizes the HP’s corporate shared values and corporate objectives.
Table 1: HP’s Corporate values and objectives
HP’s Corporate Shared Values
HP’s Corporate Objectives
- Passion for customers
- Customer loyality
- Trust and respect for individuals
- Achievement and contribution
- Results through teamwork
- Market leadership
- Speed and agility
- Commitment to employees
- Meaningful innovation
- Leadership capability
- Uncompromising integrity
- Global citizenship
Information Technology in HP
HP company has been maintaining a lead in Information Technology (IT) which is evidenced as contained in the following discussions. To start with, it is revealed from the analyst firm’s report that HP recorded a tremendous increase in the infrastructure support services revenue from $7.889 billion to $8.028 billion between 2002 and 2003. This accounts for over 6% of the world infrastructure support service market. This marks the second year of the company (HP) leading the IT industry in support service revenue. Among the identified 450 IT service providers which is finally categorized in to the following four categories:
- Major service (Hardware maintenance and support, software support)
- Platform (Computing and connectivity)
- Major geographical region and country
HP maintains the lead in all the categories. HP is identified as one of the largest IT companies that operate in nearly every country. HP specializes in developing and manufacturing computing, data storage, networking and its hardware infrastructure, software design and rendering support services.
The impact of Information Technology (IT) on the achievement of HP is not limited to the technological aspects but also the soft skills and expertise which are unique to HP software crew. Malan, Coleman & Letsinger (1995) in their study conducted to explore the current state of object-oriented practice. The findings of the study revealed that the best practice is derived from lesson learnt from HP. This means that HP is maintaining a lead in this regard. Object oriented programming approach is the most competing approach and any organization with required expertise in this area will make its ways in the competitive environment. This part of what strengthens the IT proficiency of HP company . Therefore, the success of HP cannot be a surprise since IT is now considered as the hub of every business.
HP as an IT-based company has always been ready to assist serious-minded organizations in solving their IT-relate problems and such has been a plus to the company. A good scenario in this regard is how HP came to the aid of St. Peter’s Anglican Primary School with 560 students in both the K-6 and pre-kindergarten classes.
The leadership of the school so much believe that the creating a computer-assisted learning environment for the children will serve as a good motivation for them to learn, in their quest to achieve this, the school can only afford desktop PCs due to budget constraints. The desktop PCs were found to be very slow in network operation and some were even too old to work which affects the realization of the school’s goals. An introduction to HP’s channel partner Somerville, and HP’s Consolidated Client Infrastructure (CCI), made St Peter’s to begin a complete overhaul of its IT infrastructure that would bring a new flexibility and efficiency to its entire computing platform. In doing this, HP plays a significant role in addressing this problem.
HP implemented a Consolidated Client Infrastructure based on a series of blade PCs for St Peter’s. This system meant that when a blade PC went down, another would pick up the active session, immediately minimizing disruptions to users. In a Consolidated Client Infrastructure, desktop PCs are replaced by thin client terminals, which are then virtually connected to HP blade PCs stored on a blade rack enclosure in a remote and centralised location. Each blade PC has its own CPU, RAM and hard disk. A HP blade enclosure can contain up to 20 blade PCs in a 3U rack enclosure, allowing up to 280 blade PCs per 42U rack. Blade PCs are then accessed via the Microsoft RDP, Citrix ICA or HP RGS protocols and displayed on thin client devices. Only screen updates, keyboard strokes, mouse actions, audio and peripheral data travel over the network, all the processing happens on the blade PCs. Users are connected to blade PCs either statically or through a broker such as HP’s Session Allocation Manager, thus allowing the creation of a concurrent pool of resources and lowering the amount of IT administration required. This among others repositioned HP within organizations in terms of IT support.
Information System in HP
The company does not limit herself to only the IT aspects but also doing well in information system. A good testimony to this is the HP being announced as the as the support company for the Defense Information System Agency (DISA) with the company tapping from the HP’s software for optimizing the Service-Oriented Architecture (SOA) to deliver a reliable kind of interoperability capable of servicing all US defense departments. SOA is a technique of delivering IT services in a secured and manageable manner by using flexible, reusable and standard technology that can easily be adjusted to take care of any unplanned changes that occur in the business plan. The HP systinet SOA (HP business technology) is very good in this regard as it assist business organization in building a kind of information system (record) to manage the services rendered throughout the cycle of that service.
This is to explain how far HP as a company has gone in terms of information systems to have provided DISA which is solely used for planning, engineering, acquiring, fielding and supporting IT solutions capable of serving the U.S president, Vice President, Secretary of Defense and all departments of US defense. This has earn HP series of awards from 2005 to date. HP offers SOA services to help customers at any point along the SOA lifecycle, including the design, build, integration, management and evolution of their SOA environment. HP Services also collaborates with technology partners such as BEA Systems, JBoss, Microsoft, Oracle and SAP to offer customers choice and flexibility.
Introduction about Competitive Advantage
First of all, it is important to briefly define what is competitive advantage? Competitive advantage is a feature exhibited at the expense of the firm’s rivals or competitors. It is a state where a firm sustains profits that is more than the industrial set average profit. Primarily, it is the dream of every business organization to achieve sustainable competitive advantage. According to Michael Porter, cost advantage and differentiation advantage are identified as the two basic types of competitive advantage.
Cost competitive advantage
A business firm/organization is considered to achieve cost competitive advantage if she is able to offer a better service or products to customers at a relatively reduced cost compared to her competitors. For example, HP has achieved sustainable cost competitive advantage over all her competitors by being able to produce highly quality laptops at a cheaper rate.
Differentiation competitive advantage
Differentiation competitive advantage is gained or achieved by a firm or an organization if she is able to deliver services or products of better values compared to those offered by her rivals or competitors. With the explanation of the two types of competitive advantage, it can be described as a way of getting more values for the customers and getting more profits for the company.
Figure 1 below describes a competitive advantage model. As can be seen from the model combination of the organizational resources (human and material) and capabilities forms the distinctive competencies that makes the organization to be able to make a difference with respect to either cost advantage of differentiation advantage which eventually creates values for both the organization and the customers. This is in line with the resource-based theory that for a firm to attain a sustainable competitive advantage, such a firm must have superior resources and capabilities compared to her competitors.
How Competitive Advantage helps HP Company
HP Company being one of the world largest IT companies with a quarterly revenue of approximately $97.1 billion is able to maintain such a wonderful record through the sustainable competitive advantage over the competitors. The sustainable competitive advantage has benefited the company in so many ways that she has no other choice other than sustaining such record. The gained competitive advantage has increased the company’s revenue tremendously. In year 2006, HP recorded a much better revenue of $91.7 billion against the rival, IBM with $91.4 billion. In year 2007, the annual revenue of the company was jacked up to $104 billion to become the first IT company reported to have a revenue of more than $ 100 billion, it doesn’t stop there, acquisition of the EDS in 2008, also jacked up the revenue to $118.4 billion. All these achievements in terms of boosting in the revenue are products of the gained competitive advantage.
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The competitive advantage gained and sustained ever since by HP can be also attributed to her leadership position in the world technology with groups strategically assigned to drive industry leadership in main technology areas. The Personal Systems group are responsible for the lead in the business and consumer PCs, mobile computing equipments and work station. In the same manner, the imaging and printing group is responsible for the successes recorded in all forms of printing devices (personal and commercial printing), printing supplies and the enterprise business group is in charge of all business products. The performance of each of these groups among others is what makes HP what it is today among her equal.
In addition HP became the largest world seller of personal computers as a result of her competitive advantage. In January 2010 a report from Gartner and IDC (Market Research Firms) shows that there is a wide gap between HP and Dell with HP taking 8.3% market share lead at the end of 2009. It was equally reported that HP is the 6th largest world software company.
HP Company is equally reported in year 2008, to have retained the global leadership position in Jacket, laser, large format and multifunction printers market and at the same time the second IT service provider throughout the world. All these benefits/achievements do not come by chance it is as a result of being able to maintain some degree of superiority over the competitors. This results in to competitive advantage and the benefits being discusses the created values based on the competitive advantage.
Analysis of Competitive Advantage in HP Company
HP is able to achieve and sustain competitive advantage with her distinctive competencies. First of all, the company is committed to simplifying technology experiences for all its customers. This is applicable to all the services rendered ranging from printing, personal computing, software, services and IT infrastructure. This is very important since it assists in making virtually all the HP products usable by the intended users by putting the customers first.
There is no way one can analyze HP competitive advantage without discussing the HP values; HP values is associated with the complete adherence to the ways or paths set out by the founding HP leaders. These unique ways account for the decision-making and the firm’s advancement since it is just like a roadmap. Also, HP pioneers based the corporate culture on the integration and reinforcement of critical opposites. This is achieved by simultaneously creating an environment that both celebrates individualism and at the same time supports the team work. The beauty of it is that such a practice will allow the company to tap from the benefits of both approaches as the case may be and also to neutralize their associated risks.
Another way by which the competitive advantage of HP Company is sought is through her concept of developing cross functional individuals. Unlike other companies that just hire staffs and train them for a specific job requirement to be assigned to such staffs throughout their stay in the organization, HP makes sure that all her employees move more than 4 to six functional areas within the company to allow them to work in more than one departments of the company and thereby effectively managing the organizational knowledge through effective sharing among her staffs. It has been widely agreed that in this knowledge era, effective knowledge management will surely lead to achievement of competitive advantage.
The quest for developing employee has always been the strength of HP company in attaining competitive advantage since this makes the company to achieve effective organizational change considering the rampant changes in the business organizations. Miller (2004) revealed that since 1980, HP has been engaged in extensive employee retraining program called Software Job Skills (SJS). Personnel who might ordinarily be laid-off underwent serious retraining the complex set of required skills and techniques. This makes the company to be able to sustain her competitive advantage since the employees always continue to be relevant and compliant with the new trend organizational need and employee are considered important in the performance of every organization.
Organizational competitiveness is derived by the implementation of knowledge management and its associated benefits. Knowledge management helps in reducing the production cost as a result of the possibility of reusability. This allows the organization to be able to offer services of the same quality or even better than that of its competitive at a relatively low cost. This is an important way of gaining competitive advantage. In addition, the implementation of knowledge management brought about enhanced employee productivity and coordination which has a resulting positive effect on organizational performance.
Another important factor is early delivery or ubiquitous service deliver powered by the real time communication facility. It is a wise saying of HP as quoted as follow “If only HP know what HP knows!” It means that the required knowledge and skills for solving your problem resides somewhere within the company. This means that the company has achieved a lot through effective communication. All these account for achieving sustainable competitive advantage. There have been series of academic evidences responsible for the early delivery experienced in the company due to regular improvement and enhancement of the supply chain.
According to Lava, Feyhl and Kakourus (2005),full optimization of the business supply chain cannot be achieved using only the Operation Research (OR) approach in this demanding fast-paced ubiquitous business environment of the globalized era. Using OR alone will require a lot of time which might result in to delay in the service delivery and thereby negatively affect customer satisfaction. HP strategic planning and modeling (SPaM) came out with a more efficient approach which combines the optimization ability of OR and scenario analysis of the expert knowledge to arrive at an effective supply chain approach capable of solving complex supply chain decision problem for HP’s imaging and printing group of company. the earlier the customers can get the required service the more satisfied they are, the efficient supply chain of HP has been of the secretes of the company’s sustainable competitive advantage.
It ha equally been argued that the risk associated with supply chain are related to product demand, component cost and availability uncertainties and they all affect the company’s revenues and profits. According to Ngali, Hwang, Sanghera, Gaskins, Pridgan, Thuvston, Mackenvoth, Branvold, Scholler and Shoemaker (2008), procurement management group is formed in HP and they developed and implemented a mathematical model, business process and software to estimate and manage risks associated with supply chain. This has brought a lot of benefits to the company. To the extent that in year 2006, HP was able to manage $7 billion of her spending by saving only material cost of not less than $128 million. This really maximizes the company’s profits and contributes to the sustainable competitive advantage of the company.
The products of HP are always better than that of her competitors and such are refined and rebranded from time to time to meet the changing technological needs of the customers. Just in November 2009, HP StorageWorks X9000 was introduced as the new network storage system which is primarily designed to meet the emerging trend of the explosive data growth and to enhance the performance of the file-based applications using scale-out network storage that has the ability to manage information efficiently using a single namespace. This has fetched the company more popularity in the networking society since such an innovation is needed in virtually all organizations that deal with large data. The StorageWorks is very efficient in storing data and it is known for relatively low down time.
From the discussion so far, it can be seen that organizational success cannot be easily achieved without adequately set certain outstanding objectives with pathways to achieve those objectives. From all the sources it can be deduced that the leading position maintained by HP company can be largely attributed to the aggressive ways of achieving the organizational objectives and that is only possible because of the shared corporate values among all members of the organization. No doubt such shared corporate values will make all members of the organization to have almost equal motivation to contribute to the overall organizational performance. Also, one value must always be guided to avoid being eroded and same holds for organizations. It will be difficult for any organization to beat the HP record as long as the corporate value is maintained.
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