Overview Of The Hewlett Packard Company Commerce Essay

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Hewlett-Packard Company commonly referred to as HP, is an American multinational information technology corporation headquartered in Palo Alto, California, USA. HP is one of the worldHYPERLINK "http://en.wikipedia.org/wiki/List_of_the_largest_global_technology_companies"'HYPERLINK "http://en.wikipedia.org/wiki/List_of_the_largest_global_technology_companies"s largest information technology companies and operates in nearly every country. HP specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise servers, related storage devices, as well as a diverse range of printers and other imaging products.

HP has successful lines of printers, scanners, digital cameras, calculators, PDAs, servers, workstation computers, and computers for home and small business use computers; many of the computers came from the 2002 merger with Compaq. HP today promotes itself as supplying not just hardware and software, but also a full range of services to design, implement, and support IT infrastructure.

Key facts:

Hewlett-Packard Company (NYSE: HPQ).

Headquarters: Palo Alto, California.

HP serves more than one billion customers in more than 170 countries on six continents.

HP has approximately 304,000 employees worldwide.

HP's 2010 Fortune 500 ranking: No. 10

HP's revenue for the four fiscal quarters ended Oct. 31, 2009: $114.6 billion.

International business environment analysis

Macro and Micro analysis ;


HP is a technology company that operates in more than 170 countries around the world. We explore how technology and services can help people and companies address their problems and challenges, and realize their possibilities, aspirations and dreams. We apply new thinking and ideas to create more simple, valuable and trusted experiences with technology, continuously improving the way our customers live and wor

an analyzing the macro-environment, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organization's supply and demand levels and its costs (Kotter and Schlesinger, 1991; Johnson and Scholes, 1993). The "radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization" (Tsiakkiros, 2002). A number of checklists have been developed as ways of cataloguing the vast number of possible issues that might affect an industry. A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Byars, 1991; Cooper, 2000).

Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework for reviewing a situation, and can in addition to SWOT and Porter's Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PEST also ensures that company's performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.

Main Aspects of PEST Analysis

Economic conditions affect how easy or how difficult it is to be successful and profitable at any time because they affect both capital availability and cost, and demand (Thompson, 2002). If demand is buyout, for example, and the cost of capital is low, it will be attractive for firms to invest and grow with expectations of being profitable. In opposite circumstances firms might find that profitability throughout the industry is low. The timing and relative success of particular strategies can be influences by economic conditions. When the economy, as a whole or certain sectors of the economy, are growing, demand may exist for a product or service which would not be in demand in more depressed circumstances. Similarity, the opportunity to exploit a particular strategy successfully may depend on demand which exists in growth conditions and does not in recession. Although a depressed economy will generally be a treat which results in a number of organizations going out of business, it can provide opportunities for some (Robinson and et al., 1978; Thompson, 2002).

Economic conditions are influenced by political and government policy, being a major influence affecting government decisions. The issue of whether European countries join, or remain outside, the single European currency is a case in point. At any one time either exported or imported goods can seem expensive or inexpensive, dependent upon currency exchange rates. There are many other ways, however, in which government decisions will affect organizations both directly and indirectly, as they provide both opportunities and threats.

While economic conditions and government policy are closely related, they both influence a number of other environmental forces that can affect organizations. Capital markets determine the conditions for alternative types of funding for organizations. They tend to be a subject to government controls, and they will be guided by the prevailing economic conditions. The rate of interest charged for loans will be affected by inflation and by international economics and, although the determining rate may be fixed by a central bank, as it is the case with the Bank of England, that will also be influenced by stated government priorities. According to Thompson (2002), government spending can increase the money supply and make capital markets more buoyant. The expectations of shareholders with regard to company performance, their willingness to provide more equity funding or their willingness to sell their shares will also be affected.

The labour market reflects the availability of particular skills at national and regional levels; this is affected by training, which is influenced by government and other regional agencies. Labour costs will be influenced by inflation and by general trends in other industries, and by the role ad power of trade unions.

The sociocultural environment encapsulates demand and tastes, which vary with fashion, disposable income, and general changes, can again provide both opportunities and threats for particular companies (Thompson, 2002; Pearce and Robinson, 2005). Over-time most products change from being a novelty to a situation of market saturation, and as this happens pricing and promotion strategies have to change. Similarly, some products and services will sell around the world with little variation, but these are relatively unusual. Organizations should be aware of demographics changes as the structure of the population by ages, affluence, regions, numbers working and so on can have an important bearing on demand as a whole and on demand for particular products and services. Threats to existing products might be increasing: opportunities for differentiation and market segmentation might be emerging.

Technology is widely recognised by various literature on strategic management (Capron and Glazer, 1987; Johnson and Scholes, 1993; Jan, 2002), as part of the organization and the industry part of the model as it is used for the creation of competitive advantage. However, technology external to the industry can also be captured and used, and this again can be influenced by government support and encouragement. Technological breakthroughs can create new industries which might prove a threat to existing organizations whose products or services might be rendered redundant, and those firms which might be affected in this way should be alert to the possibility. Equally, new technology could provide a useful input, in both manufacturing and service industries, but in turn its purchase will require funding and possibly employee training before it can be used.

Palm, Inc. and Hewlett-Packard announced that HP would be acquiring Palm for 1.2 billion in cash and debt,[27]the deal officially closed on July 1, 2010.[28] In the months leading up to the buyout it was rumored that Palm was going to be purchased by either HTC, Dell, RIM or HP. The addition of Palm handsets to the HP product line provides some overlap with the current iPAQ mobile products but will significantly increase their mobile presence as those devices have not been selling well. The addition of Palm brings HP a library of valuable patents as well the mobile operating platform known as webOS.

Briefly discuss the industry of sector:

HP has successful lines of printers, scanners, digital cameras, calculators, PDAs, servers, workstation computers, and computers for home and small business use computers; many of the computers came from the 2002 merger with Compaq. HP today promotes itself as supplying not just hardware and software, but also a full range of services to design, implement, and support IT infrastructure.

HP's Imaging and Printing Group (IPG) is "the leading imaging and printing systems provider in the world for printer hardware, printing supplies and scanning devices, providing solutions across customer segments from individual consumers to small and medium businesses to large enterprises."[33] Products and technology associated with IPG include Inkjet and LaserJet printers, consumables and related products, Officejet all-in-one multifunction printer/scanner/faxes, Large Format Printers, Indigo Digital Press, HP Web Jetadmin printer management software, HP Output Management suite of software, LightScribe optical recording technology, HP Photosmart digital cameras and photo printers, HP SPaM, and Snapfish by HP, a photo sharing and photo products service. On December 23, 2008, HP released iPrint Photo for iPhone a free downloadable software application that allows the printing of 4" x 6" photos

Key success factors

International strategies (Competitive analysis)



Strong brand equity

Diversified product portfolio (offerings spans personal computing and other access devices; imaging and printing-related products and services; enterprise information technology infrastructure, multi-vendor customer services, consulting and integration and outsourcing services)

Solid market position in key segments

Strong financial condition



Emerging markets, particularly BRIC countries

e-Commerce expansion

Restructuring of internal IT structure

Imaging and printing businesses


Internal control issues

Lack of in-house management consulting division

No aggressive investments in R&D compared to historical spending

Unrest among internal employees due to pay cuts and lack of "people care"

Intellectual Capital is under estimated

No Good People retention policy or HR practices to ensure IC is protected


Intense competition from other PC manufacturers

Increasing competition on imaging and printing

Slowdown in economic conditions in US, Europe

Product recalls and supply chain disruptions

 Move into new markets

Evaluate your company strategies with other different companies

Organisation strategy

HP's Office of Strategy and Technology[37] has four main functions: (1) steering the company's $3.6 billion research and development investment, (2) fostering the development of the company's global technical community, (3) leading the company's strategy and corporate development efforts,[38] and (4) performing worldwide corporate marketing activities. Under this office is HP Labs, the research arm of HP. Founded in 1966, HP Labs's function is to deliver new technologies and to create business opportunities that go beyond HP's current strategies. An example of recent HP Lab technology includes the Memory spot chip. HP IdeaLab further provides a web forum on early-state innovations to encourage open feedback from consumers and the development community.[39]

Bench marking

Porter's demand

perform the Industry Analysis it is better to follow Michael Porter's five forces model. This analysis framework was created so that it helps managers in their task to analyze competitive forces to the company. (Hill &Jones 80) This model is only one of the models that can be used for this task but it is one of the more popular models. The five forces that we will have to look at for this model are (1) the risk of new and potential competitors; (2) the bargaining power of suppliers; (3) the threat of substitute products; (4) the bargaining power of buyers; and (5) the degree of rivalry among established companies within an industry. (Hill &Jones 80) The first force in Porter's Five Forces Model is Entry Barriers. These factors are those that make it harder or easier for another company to enter into the industry. High barriers to entry will keep potential competitors out of the industry and low barriers to entry will give an opening for competitors to enter into the industry if the industry returns are high enough. (Hill &Jones 82) The fewer competitors in an industry the more the existing companies can take advantage of higher prices and better returns.


Analysis marking

GE marking and shell marking

Effectiveness of international strategy

Firm market entry strategy

Growth strategies

Potential development over 10 to 20 years

Appropriate justified recommendation for improvement, development and international