This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
According to my point of view I have selected a sector of Hewlett Packard (HP) Company to do an analysis of the strategic position. Shane et al (2009, p.2-3) noted that, There are seven business segments of the HP company. They are Services, Enterprise Storage and Servers, HP Software, the Personal Systems Group, the Imaging and Printing Group, HP Financial Services, and Corporate Investments. I have selected HP personal Systems Group (PSG) as the sector of HP Company to do an analysis of the strategic position of the company. There are various types of income streams and costs relevant to different types of companies or organizations. Income streams and costs are really important for companies to analyze the position or profit of the company. HP PSG has many areas of income and expenditure relevant to personal computer industry.
HP PSG sells different kind of PCs. Commercial PCs are specially selling for enterprise and small medium business partners (SMB).Both
Commercial and Consumer PCs categorised into many types such as desktops, notebooks, tablet PCs, Multimedia PCs and so many types. On the other hand workstations are specially designed for particular purposes. Such as make 3D animations. In addition PSG sell handheld computing devices. Such as PDAs (Personal Digital Assistant).
PSG provides services after sold their products to consumers. Consumers have to pay for after sale services. There are various types of services available from HP PSG such as repairs, Maintenances, Upgrading parts, Upgrading systems and so on. Through these services HP PSG earns income.
HP PSG sells parts and accessories related to Personal Computers. There are various types of parts and accessories produce by them. Such as batteries for laptops, Power adapters, carrying cases for laptops, Mice and keyboards, CD/DVD drivers, PC memory and so on.
When HP PSG makes products they allow other companies to include some parts or programs to their products. For an example when HP PSG sells a laptop they include an operating system for that laptop. Microsoft Corporation pays to HP PSG for include windows vista or windows 7 inside HP laptops in most of time. Through this Microsoft Corporation promote their operating systems through HP PSG.
Those facts and finds are background idea about the Hewlett Packard Personal Systems Group. Through this report I have researched and analyzed the strategic position of Hewlett Packard Personal Systems Group.
ACTIVITY 1: UNDERSTANDING THE BUSINESS
Sell Commercial PCs (Personal Computers) /Consumer PCs /Workstations and Handheld computing (Hewlett Packard, 2009) - Above types of PCs sell for different kind of consumers as mentioned in Activity 0 Introduction (see paragraph 2) After sale services (Hewlett Packard, 2009) - As mentioned in Introduction, (see paragraph 3) after sale services are good income streams for the HP PSG. Sell PC parts and accessories (Hewlett Packard, 2009) - There are many types of accessories and parts sell by the HP PSG as mentioned in Introduction (see paragraph 4) . Such as batteries for laptops, Power adapters, carrying cases for laptops, Mice and keyboards, CD/DVD drivers, PC memory and so on. Sponsorships and partners (Hewlett Packard, 2009) - As mentioned in Introduction (see paragraph 5) if some another company needs to publish their logo through HP PSG products, they have to pay for it.
Operating Activities - *Purchase raw materials - company needs raw materials for production stage of the products. For an example, in generally silicon is mostly use for build parts of personal computers. Silicon is a raw material of HP PSG.
*Labour cost - company has to pay for their employees. HP PSG hires top employees for their company. For an example HP PSG's executive vice president is Todd Bradley. HP PSG pays good salary for him. Like wise company has to spend money for their all employees (Hewlett Packard, 2010a)*Outsourcing - HP PSG hiring outsource companies to do their manufacturing parts of the production process. HP pays for outsource companies. The main purpose of outsourcing is reducing the production cost. (Verstraete, 2009)*Maintenance - company has to spend money for maintain machines and other resources of the company Investing activities - *Purchase equipments and other resources - This Company invest money for purchase new machines and related equipments when they need to use latest technology.*Research and Development - HP PSG invest money for do research on new inventing devices; also invest money for new developments (Hewlett Packard, 2009) Financing Activities - *Tax payable - Government take taxes from every production of PSG. Company has to pay taxes according to the tax rates (Hewlett Packard, 2010e) *Warranty claims - if products damage with in the warranty period after sale to customers because of production fault, company has to replace or repair the product for customers.*Grants, sponsorships and bursaries
Measure of performance
The reliability of delivering products is guaranteed by the HP PSG. Normally This Company delivers their products to consumers within 5-7 business days. If consumers buy more than $39.99 costs products, they will deliver products for free (Hewlett Packard, 2010b). If we think about other competitive companies such as Dell, normally they take 7-10 working days to deliver a product (Dell, 2010). Also HP PSG tests their products using latest technology. They are certified with ISO certification. With that they guarantee the quality and reliability of the PSG products (World of quality, 2006). They try to make products which are matched with human's lifestyles. They market those products as day to day needs and wants of humans. So consumers addicted to buy products when HP PSG released latest products. HP PSG has good product flexibility. Their latest marketing campaign is named as "The Computer is Personal Again" (Merchant, 2007). On the other hand Dell also invented various types of products flexible for consumers. Dell bought most popular gaming PC Company and they invented different type of flexible PCs for consumers (Alienware bought by Dell, 2009). HP PSG is one of large global company. They got ability of capacity to produce required volumes. They have hired lots of outsource companies and they have ability produce required volumes on time (Hewlett Packard, 2010c). Everyone trusted HP PSG products. HP brand name gets major position in the market. Product price is a very important fact that affected to measure the performance. According to performance list I argued that the most appropriate performance is quality and the flexibility. Customers expect quality products for their usage. So there is a high competition in the PC market to fulfil this performance.
I have created a value chain for HP PSG in Appendices (see Appendix B). I have explained that value chain using below table.
Hewlett Packard Personal Systems Group (Activities)
Purchase raw material from OEMs. OEM means Original Equipment Manufactures such as Intel and Nvidia. When HP PSG produces a PC they assembled PCs using original equipment for example processors from Intel and Graphic cards from Nvidia. HP purchase using Just In Time ordering system when they need parts. (see Appendix B)
HP PSG has their own plants for manufacturing process. But they hire more outsourced companies to do their manufacturing parts. They can reduce manufacturing cost by hire outsources companies. (see Appendix B)
Same as operation of HP PSG, they hire lots of outsourced companies for warehousing and distributions. HP has lots of partnerships and global communication for huge warehousing and distributions. (see Appendix B)
Marketing & Sales
HP PSG do their own marketing campaign as well as they do their marketing using retailers, resellers, distribution partners, independent distributors, original equipment manufacturers and independent software vendors (see Appendix B)
PSG provide lots of service for customers such after sale services, Accessories upgrading services, IT supports services, consulting, integration, and outsourcing services. (see Appendix B)
HP runs seven business segments in the industry. HP PSG is the largest PC making company (see Appendix B)
Human Resource Management
HP PSG has 304,000 employees all over the world. HP has good human resources. They are categorised from top down structure. HP has good management to increase their team working efficiency. (see Appendix B)
Last year HP has invested $2.8 billion for research and development. They invent lots of new technologies into the market. (see Appendix B)
Good negotiate power with partners. HP uses them for supply and purchase raw materials. (see Appendix B)
Retailers purchase HP PSG products from the global distributors. There are huge numbers of hp retailers worldwide. Big Byte, Bond and Bond Harvey Norman and Smiths City are some of major retailers of Hewlett Packard. (Hewlett Packard, 2010d)
Hewlett Packard PSG distributes their products using different kinds of global distributors. Gamma Global is an one of global distributor which deal with Hewlett Packard
HP PSG hire lots of outsourced companies to do their manufacturing and product ware housing process. Electronic Data Systems Corporation is the major outsourced company of Hewlett Packard
(Electronic Data Systems Corporation, 2007)
HP Personal Systems
Regional Suppliers, International Suppliers
HP PSG order lots of raw materials from different kind of companies. Most of parts are purchased from Original Equipment Manufacture (OEM). Some major suppliers are Hitachi, Intel, LG, Nvidia, SANYO, TDK, Microsoft and SAMSUNG
(HP Suppliers, 2008)
HP PSG competitors
There are major competitors against HP PSG. They are IBM, DELL and APPLE
(Yahoo Finance, 2010)
Government rules and regulations - Specific rules and regulation are developed by the government to restrict the sales of personal computers regionally, nationally or globally. MacNealy (2004) noted that HP PSG is a global key player of the market.
Taxes - HP PSG has to pay income taxes for the government as a company (Hewlett Packard, 2010e)
Social Economics and demographic factors
Competition for similar products - There is huge competition in the market between many companies. There are many types of similar products in the market.
Customer satisfaction - Customer satisfaction is a very important factor for businesses. Customers are interesting about brand name, quality, certifications and reliability of products. HP is a famous brand of the PC market. Customers consider about HP brand when they purchase PC or components. Products must be match with the customer needs and wants. If there is a good demand for product customers will buy it definitely.
Eco friendly product developments - Most of PC manufacture transforming their products into environment (eco) friendly products. HP PSG also transforming their products into eco friendly products (Hewlett Packard, 2010f)
ACTIVITY 2: ESTABLISHING COMPANY DIRECTION
'We know that actions speak louder than words. We must make decisions and behave in ways that we can be proud of, that reflect our commitment to doing the right thing' (Hurd, 2008).
This ethos is originally adopted by the current CEO of HP. Actually an ethos must be expressed corporate personality of the company. This ethos described that, everyone who works for the company must work honestly and fulfil their responsibilities practically not just saying by words. HP employees must be proud about doing right thing according to what they decided and complete as took decisions. It should be practically reflected for outside that they are doing right things. The same thing must affect to all areas and stages of the company. The every thought must be done effectively by everyone who represents the company to obtain every thought.
HP always provides their products in good quality. They respect about themselves for the satisfaction of customers about their products. Using this aim they are trying to say they already got their customer satisfaction by providing good quality products and they always keep this aim to grow their business. There should be enough assets for handle a business. Every business expects profit from their sales. If they could get more profit, they will success. They already know how to use their strength to growth and fight with their competitors. HP is the largest IT Company in the world. They provide their products for customers by getting the market leadership. They also provide good services for their employees to increase the moral of them. If there is good service for their employees they work hard for their company. HP has good leaders to manage their company. They correctly positioned their employees in correct places. They provide good commitment to their employees. HP always respect about work in anywhere in the world. They fulfil their customer needs as they can possible. HP introduce more eco friendly products with the Global Citizenship project and try to be a global player that match with every cultures in the world. Those are the main objectives of the HP Company. (Hewlett Packard, 2010g).
'Worldwide, connected, continuous, secure computing through virtually unstaffed, automated data centres; Bringing the power of digital technology to commercial printing, and creating ubiquitous, low-power, low-cost, lightweight displays that could convey multimedia information in formats as small as a wrist watch or as large as wallpaper; Advances in computing technology that could extend Moore's Law beyond the limits of classical physics and provide a quantum leap in performance, reliability and security, vastly improving information and communications services in business, education, medicine, government and daily life'(Hewlett Packard, 2010h).
HP has a clear strategic vision which described where the company needs to be at some future point. This vision is clearly focused on to achieve high level technology with low cost and high benefits which based on to create a digital world which connected together with HP products. First HP mentioned especially about virtual data centres in their vision statement. Pike and Abels (2006) noted that, "The virtual data centre (VDC) is an evolutionary computing model that presents the data centre as a service view to a single computer, which virtualizes all hardware and software resources behind it". HP expects to create more VDCs to reduce the cost of staff. On the other hand they expect to advance usage of multimedia information using their products with lower cost, low power and variety of usage ranges. Finally HP mentioned their vision statement, they will go beyond the Moore's Law by eliminating limitations and create their products with the beyond technology to improve the needs of society with transactions of information technology. Moore's law is invented by the founder of Intel Corporation. Moore (1965) argued that, "the number of transistors on a chip will double about every two years". HP pointed out that they will go beyond the Moor's law in future. Those are the key points noted out in HP's vision statement.
Achievements of the mission statement
Catch the customer commitment - In last few years, HP successful is based on customer loyalty about this company. They achieved customer satisfaction by providing reliable and quality products to the customers. They have given first priority for customer in their mission statement. Earn valuable profit compare to cost - Earn profit is a common goal for every company. HP must have good profit to balance their business with short and long term missions. If company could achieved above aspect (Customer satisfaction), simply they can earn good profit. Earn good profit is a fact of HP's mission statement. Get the leadership of market - HP always try to get the first place of market. If we think about PSG, that group already achieved this fact. Kanellos (2008) argued that, HP PSG is the world largest PC manufacture of the world in 2007. Like wise they are still trying to be the number one in all section. Growth - HP always invest huge number of investment for research and development (Hewlett Packard, 2010i). As a fact of mission statement they try grow their company day by day. That is the reason they include it into mission statement. Employee commitment - HP recognized their employees and provides a good working environment with good facilities. Human resource management is one of fact of missions. Catch global market - HP is a key player of global market. As a mission they always try to keep their name on the top globally.
'At HP, we believe diversity is a key driver of our success. Putting all our differences to work across the world is a continuous journey fueled by personal leadership from everyone in our company. Our aspiration is that the behaviors and actions that support diversity and inclusion will come from the conviction of every HP employee - making diversity and inclusion a conscious part of how we run our business throughout the world.' (Hewlett Packard, 2010j).
As a good point of corporative strategy HP attention on size, product and market share. HP needs good human resources to achieve their aims. HP is believed diversity is the key strategy to for their company. Diversity means unique. They respect their every individual as unique in everywhere such as workplace, market place or community. They respect different people from different languages with different skills. They respect everyone as unique. They pointed out through this strategy that every employee must work with keep in mind this concept. On the other hand perfect working environment is the other aspect. The environment should be a place where everyone can contribute successfully to make the business success using their valued key skills, experiences and their point of view. They expect create a global community through HP products. Everyone has different needs. HP respect their employees' thoughts and ideas. Always HP tries to give supportive environment for their employees. Employees are allowed to work with managers and to take decision as supporters. The secret of HP success is the strong relationship with their employees and flexible working environment. Also they are maintaining lifecycles of their variety of products. According to the (Nonstop Computing, 2010), HP maintain reports to check the Steady-state, Growth and Decline of their product lifecycles. Financially they measured their product life cycles for maintain it. Actually corporative strategy means the way of company going to achieve their vision. HP is believed about above facts that they are major ways of HP going achieve their vision.
Strategic Inflection Points
If we think about last ten years, I have pointed the major strategic inflection points I this section. I have created a table in appendices using company information about HP's last ten years. I have bold major inflection points in the table. In 2001 HP planed to introduce more new products with variety of features because of the beginning of the 21st century. They tried to simplify the technology with customer experiences. At that time they start to become the largest IT Company. 2002 is important year for HP. Compaq and HP merged together and it is the biggest ever merger of two IT companies. With that merger they changed their strategy with ideas and agreements of both companies. In 2003 HP introduced their complete strategy after merged with company. With that strategy they focused on to offer products using high technology for lower cost. They could develop products for lower cost because of merged with big two companies In 2004 HP introduced a digital entertainment strategy. They focused on to develop entertaining products which give more enjoy for their customers. In 2007 they extended their strategy focused on research and development to increase their market share. (see Appendix C).
ACTIVITY 3: INDUSTRY AND COMPETITIVE ANALYSIS
Dominant economic factors
There are dominant major dominant factors are affect to the computer manufacturing industry. When consider about market of computer and peripherals, there is a huge market size for the sector and variety range of products introducing into the market by lots of competitive companies. HP increases there market size day by day. HP lead PC shipment unit share by 2.2 (Hewlett Packard, 2007). Other major factor is scope of competitive rivalry. Companies do their business locally or globally. If they do the business global, they can be a global player. HP has a huge global market all over the world. HP started a new project globally in 2008 called "Global Citizenship'. They hope to introduce more eco friendly products through this project (Hewlett Packard, 2008). Next factor is industry profitability. There should be good profit for survive with in this industry. Companies have to invest lots of money for development and production process. On the hand Rapid technological change and Rapid product innovation are totally affect for the this sector. Customers always waiting for buy innovative and advanced technological products. It is a considerable and important economic factor.
Five competitive forces
Jockeying for position with rivals - This described about competition between the firms. There is huge competition for price and the loyalty of the products. Competitors fight with other firms to get more market share or achieve more consumer relationship for their products. HP PSG sells different type of products. So they have to fight with other companies with various types of products and different types of levels. If we think about server machines for the network environment, IBM is the major producer in the market. IBM is the major competitor for Hewlett Packard in server side. So HP invests lots of money for research and development for beat the IBM. There is huge competition for computer market. Competitors sell different kind of PCs, laptops, notebooks and other accessories including with many types of function. HP is the number one player in the PC market. The major competitor is Dell. But HP already taken huge market size for their side. HP brand name is the most powerful tool for the HP. They can fight with their competitors easily because of their brand name. When consumer buys products, they consider about HP brand rather than other companies. HP PSG already had taken a good place among rivals in the market.
Bargaining power of suppliers - In generally when there are more suppliers in the market for a company, the bargaining power of company is high. But if there are low numbers of suppliers for a company, the bargaining power of supplier is high. Supplier bargaining power is high means, if the supplier stopped supply materials, company can't continue their process. Company will buy materials from the suppliers for any amount when suppliers are in high bargaining power. Company bargaining power is high means, when company is buying materials, they can buy it for different amount, may be lower cost if there are more suppliers. If the supplier stopped supplying materials, no need to stop the process of the company, they can buy material from another company. When we think about HP PSG, there is high bargaining power for their suppliers. HP PSG can include only Intel or AMD processors for their PCs for Microsoft environment. There is competitive demand for Intel and AMD in the market. Most people buy Intel processor included PCs. So HP PCs can't sell without including Intel or AMD processor. So if the Intel or AMD stopped, supplying processor, HP can't continue their PC development process.
Bargaining power of customers - In generally when there are more competitive companies in the market for a customer, the bargaining power of customer is high. But if there is low number of companies for a customer, the bargaining power of customer is low. Customer bargaining power is high means; customer can buy different types of PC brands from the market. If a company stopped selling PC, customer buys another brand because of competitiveness of companies. Customer bargaining power is low means; there are few companies in the market. Customer doesn't have any other companies when there are few companies in the market. For an example oil is a finite resource, so customer can't use another resource apart from oil. At that time customer bargaining power is low. Customer bargaining power high means, there are lots of competitive companies available in the market for customer. When customer buys products, they consider about brand name, price, quality and other features. They compare the product features with different brands. If the customer satisfies with the product features, customer will buy the product. When we think about computer industry there is high bargaining power for the customer. There lots of companies and brands available for customers in PC market. But HP brand is on the top comparing with other brands. HP PSG is the world largest PC manufacture. So when customer buying PC products, first they consider about HP brand first most of times. If customer requirements not match with HP PCs first, then customer will go for another brand.
Threat of new entrants - When we consider about computer industry, it is really hard to enter this industry for a new company. PC Company must have huge number of capitals to maintain it. It is really high cost even try to entrance for this market. HP and other companies already placed their brand in high place. Customer not consider about another new names of companies. Also HP already invested lots money for research and developments. So anyone can't stop improvement of HP brand and the position. HP introduces lots of new pc continually. Customers are waiting to buy new product from HP. So there is no space for new companies in PC market
Threat of substitute products or services - There are few substitute products and services available in the PC industry. HP is not considering much about substitute because there are no more substitute products in the market. The major substitute PC product is apple MAC PC. But as a percentage there are % of Mac users and % of PC users in the world. So there is no threat from substitute products or services for HP.
Driving Forces for industry change
Product Innovation - Innovation is an important thing of the computer and accessories industry. Customers are waiting to buy new advanced technology products with advanced features. Companies can change the market by introducing new innovative products into market. For an example as a good impact HP PSG introduced hp mini 210 laptop in few months back. It is really small and included touch screen with rotatable screen. User can rotate the screen other way round and can use as touch notepad with variety of functions. (Hewlett Packard, 2010k). Changes in cost and efficiency - Product price is another force which affect to the changes of the industry. Customers are trying to buy high efficient personal computers for lowest possible cost. HP provides variety price ranges for their products. Any customer can buy products for applicable prices according their level. Changes in buyer preference - When we think about PC products, there different types of criteria's which affect for the customer preference. Companies must identify the customer preference and develop the product according to that. As an impact, HP PSG had done a marketing campaign which is called "The computer is personal again". They try to say their products will make easier of lives. Company can increase their customers by changing the customer preference. Government policies - Government rules and regulations are affected to the computer industry. For an example if the Government increased the tax rate for personal computes, the company has to increase the product price. When product price increased, customers try to move for another company. Most of time HP PSG do their production and transportation procedures using outsource companies. As an impact HP can reduce their production cost. Those are the major forces which driving industry changes and the impact that HP taken.
Strongest and weakest positions of companies
As I discussed in measure of performance about HP and Dell, I identified here the strongest and weakest positions of those companies. In I am describing only HP and DELL. If we think about DELL business model, there no middle man in the value chain. They allow customers to customize the pc. But if we think about HP there is a middle man in the value chain. It a very weak point of DELL. That's the reason for low profit of DELL. After combined HP and Compaq they got big advantage from it.
Key factors for competitive success in the sector
ACTIVITY 4: EVALUATING COMPANY RESOURCES
How well is the present strategy working?
As I mentioned above, the major concept that HP believed is diversity. In here I have mentioned, how this strategy is working. There should be clear mechanism to monitor and control whether the strategy working properly or not. Normally a company can use qualitative and quantitative research to measure how the strategy is working. I have pointed out below what HP achieved last years as a result of worked according to this strategy.
Largest PC manufacture of the world
Improve developing eco friendly products
Try to make products related to lifestyle's of people (Theme is "Computer Personal Again")
Earn highest profit
Garter (2009) noted that, HP market share has increased by 9% at end of 2009 and they become the largest PC manufacture of the world. According to the above facts and findings I argued that, HP's present strategy is working correctly and they have achieved what needed. If stakeholders not working according to this strategy HP can give warning signs to increase the performance again.
Resource strengths and weaknesses
Largest PC manufacture of the world
Value of the brand name since 1939
The 9th position ranked of the 500 fortune top 1000 American companies
Do transactions globally
Holding more shares in the share market
More partnerships with other companies such as Microsoft
More Middleware suppliers
Problems of keeping partnerships with other companies
Risk of holding more shares
When we compare about strengths of HP, the value of brand name is the biggest strength of the HP. They valued their brand name since 1939. When customers go to market, first they give priority for the brand. Customers already satisfied with HP products in the world. HP already taken more than half of the market. HP nominated as 9th position of the 500 fortune. It is the competition for choosing the top 1000 American Companies. Nomination is a valuable asset to prove the customers that they are perfect PC manufactures. HP does their transactions globally. They caught local market as well as global market. As strength they hold more shares in the market. We can analyze the situation of the company using market size. HP has much partnership in any where in the world. Those are helpful for create a good value chain.
When we think about weaknesses, the biggest weak point is there are more middleware services included in supply chain of HP. When product goes to the customer, the price can be changed. On the other hand HP has more partnership with other companies. Such when HP buy raw materials, they are strongly depend on Intel and Microsoft. If Intel or Microsoft does not provide raw materials HP can't continue their business production process. Always HP has more shares from the market. There is a risk when they are hold more shares. If the share price is go down HP can't survive in the industry.
External opportunities and threat
Personal Computers are most important part of today's lifestyle of humans
High demand for upgradable component with advanced technologies
High demand for eco friendly products
Improving E-Commerce transactions
Competitive companies such as Dell and IBM
Government rules and regulations of making eco friendly products
Most of people not aware of getting eco products
Similar products producing by other companies for lower cost
External opportunities are very important for a company to improve their business process. PCs are very important tool for today's lives. People buy PCs continuously. It is a special need of their lives. So it will help for PC manufactures to sell their accessories to the customers. Also Eco friendly products are innovative products in the market. There is a high demand for eco friendly products. So it is a good opportunity for PC manufactures. Online purchasing is a special requirement of today's customers. Dell computers business model runs on online purchasing. But HP does both ways online selling and direct selling.
Threats are inhibitors for PC manufactures. Competitive companies are a threat for HP. Dell is the most competitive PC manufacture against Hewlett Packard. HP has to develop more eco friendly products in near future because of Government rules and regulations. There are lots of small medium sized PC manufactures are there in the world. They make PC products and sell for lowest cost.
Assess the strength of their competitive position
Culture within the company? Will it be supportive to change or not ?
ACTIVITY 5: STRATEGY AND COMPETITIVE ADVANTAGE
HP PSG is the largest PC seller in the world. Most of times they are the best cost providers in the market. They provide lots of PC products into market and they sell them in very high competitive prices in the market. That is the reason for named HP PSG as best cost provider at many times. HP PSG provides different types of PCs into the market. If we think about laptops, they provide laptops from lower range of prices to higher range of prices. But the quality is same. Laptops features are increasing when the prices are high. HP PSG always sells PCs with variety of differentiations. Other smaller companies sell their PCs for lower prices rather than HP. But they can't sell them with a quality of services when comparing with HP PSG. Everyone can recognize immediately when they see the brand name of HP other than another smaller companies. Customers trust in brand names when they buy products. The success behind the HP PSG is the quality of services, well supporting and differentiations of the products. HP PSG is a global player in PC market. There is good alliance HP PSG with other companies in the world. Such as HP PSG with Microsoft Corporations. 90% of HP PCs run on the Microsoft Operating system. HP has good relationship with other companies. In last year HP is ranked as the 9th position of 500 fortune companies of the world. HP is growing day by day. They hope to provide innovative products in the future. Not only future they already introduced innovative products into the market. For an example HP touch smart laptops are one of innovative product in the market.
I argued that the most suitable generic strategy is differentiations. Computer industry is changing everyday. So there is an opportunity to success by providing different types of products into the market by adding new technology and features.
HP PSG is good cost competitor in the PC market. They include lots of multimedia functions into different kind of PC. Also they provide good covering designs into PCs. If we think about a laptop there are lots of colours available for customers to choose when they buy products. In these days HP PSG sell hp touch smart laptop for customers. That is the latest multimedia function they included into PCs. Also HP PSG provides customization facility for the customer. When customers buy product through online. They can optimize features and design by own. After customers ordered a PC with customizations, HP PSG assembles the PC according to customer requirement and delivers to home. In that case the competitiveness is customers can optimize a PC online. Also HP has a good brand name. When customers buy PCs they buy HP products in what ever high range of prices because of brand name.
According to the above chart that is the overall profit margin of HP all group in few year back. But when we think about HP PSG dell is the core competitor of HP PSG. Through this chart you can see HP is in high range of net profit when we compare it with Dell. HP got the top position in PC market.
Core competencies of the company
HP is the world largest PC company in the world. HP brand name is the most popular brand name. Another fact that after combined HP and Compaq they got more competency advantage from it.
Develop more innovative products related to human life style
Develop more competitive and upgradable accessories to customers to fulfil their more needs
Provide 100% accurate eco friendly products not on local provide to global
Improve more e commerce transactions and customer relationships
Make good sale distributors through global
Keep high rate for the brand name
Get more shares within the market
Sell more competitive products
Keep the brand name high demand
Provide more after sale services and warranty
Provide more customization facilities for the customers
Reduce developing non eco friendly products
Avoid weak partnerships with other companies
Exploit - As I mentioned earlier there are lots of opportunities available for HP PSG. Using those opportunities HP can increase their strengths more and more. If we think about first opportunity which I mentioned in activity 4, personal computer is a most wanted electronic device of the market for consumers. HP can take this opportunity and they can increase the needs of customers by providing different type of PCs in different types of prices. HP can provide PCs for low prices for middle range of customers. If the performance is good of PCs, customers will defiantly buy them. HP must do more marketing campaigns to explore customers. Second opportunity is High demand for upgradable component with advanced technologies. There is huge market for computer accessories and parts same as complete PCs. Some people assemble their own PCs by getting accessories and parts from the market. If the HP develops high innovative products they can increase their strengths using this opportunity. The third opportunity is High demand for eco friendly products. Government introduced more rules and regulations for avoid environment pollution. So there is a high demand for environmental friendly products. HP already invested money on research and developments. On the other hand, most of customers like to buy their products through online. HP has to improve their E-Commerce transitions. Confront - There are major threats available for HP. HP can eliminate those threats using their strengths. For an example Dell is a treat for HP. But if you think about their business models, they run two different models. HP has middleware supplies. But most of time dell runs their business without middleware support. HP can increase online sales to beat Dell. But HP already wins the market few years back. Search - HP has more middleware supporters. They can reduce middleware services as a search for ignore that weak point. . As an opportunity, there is high demand for e-commerce transactions. So HP can introduce more new e-commerce transaction to avoid middleware support. Avoid - After identified weaknesses and threat correctly HP can avoid them using any kind of mechanism. Such as get more advantages from Strengths and opportunities.
Alienware bought by Dell (2009). Available at: http://news.soft32.com/alienware-bought-by-dell_999.html (Accessed: 5 February2010).
Dell (2010) Delivery Information. Available at: http://www1.ap.dell.com/content/topics/topic.aspx/ap/topics/main/en/priority_delivery?c=au&cs=19&l=en&s=dhs (Accessed: 29 January 2010).
Electronic Data Systems Corporation (2007) Annual report [Online]. Available at: http://media.corporate-ir.net/media_files/irol/71/71087/eds/eds_2007_annual_report.pdf (Accessed: 30 January 2010).
Gammaglobal (2010) Available at: http://www.gammaglobal.com/rittal_partnership.php (Accessed 01 February 2010)
Garter (2009) Gartner Says Worldwide PC Shipments Returned to Growth in Third Quarter of 2009 [Online] Available at: http://www.gartner.com/it/page.jsp?id=1207613
Hewlett Packard (2007) HP Extends PC Market Share Lead [Online] Available at: http://www.hp.com/hpinfo/newsroom/press/2007/070117b.html (Accessed 10 February 2010).
Hewlett Packard (2009) Annual report [Online]. Available at: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjgxNTR8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 (Accessed: 30 January 2010).
Hewlett Packard (2008) Global citizenship customer report [Online] Available at: http://www.hp.com/hpinfo/globalcitizenship/gcreport/pdf/hp_fy08_gcr.pdf (Accessed 10 February 2010).
Hewlett Packard (2010a) Executive team [Online]. Available at: http://www.hp.com/hpinfo/execteam/bios/bradley.html (Accessed: 26 January 2010).
Hewlett Packard (2010b) Free Shopping Details [Online] Available at: http://www.shopping.hp.com/shopping/html/popup/mtfs_webdetails_11-07.html (Accessed: 29 January 2010).
Hewlett Packard (2010c) Business Process Outsourcing [Online] Available at: http://h20338.www2.hp.com/services/cache/83010-0-0-0-121.html(Accessed: 28 January 2010).
Hewlett Packard (2010d) Major Retailers [Online] Available at: http://h50025.www5.hp.com/ENP5/Public/Content.aspx?contentID=23428&portalID=375&pageID=3 (Accessed: 4 February 2010).
Hewlett Packard (2010e) Financial News [Online]. Available at: http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-newsArticle&ID=869064&highlight= (Accessed: 28 January 2010).
Hewlett Packard (2010f) HP Eco Solution [Online]. Available at: http://h41111.www4.hp.com/globalcitizenship/uk/en/environment/index.html#/RECYCLE_AND_REUSE (Accessed: 5 February 2010)
Hewlett Packard, 2010g) HP corporate objectives and shared values [Online] Available at: http://www.hp.com/hpinfo/abouthp/corpobj.html (Accessed 07 February 2010).
Hewlett Packard (2010h) HP Outlines Future Vision at 40th Anniversary of HP Labs [Online] Available at: http://www.hpl.hp.com/china/news/pdf/13_labs40_short.pdf (Accessed 07 February 2010).
Hewlett Packard (2010i) HP to invest over S$40 million in R&D for Handheld Computing [Online] Available at: http://h41131.www4.hp.com/sg/en/press/hp-to-invest-over-s-40-million-in-r-d-for-handheld-computing.html (Accessed 05 February 2010).
Hewlett Packard (2010k). HP Mini 210 series [Online] Available at: http://www.shopping.hp.com/webapp/shopping/computer_can_series.do?storeName=computer_store&category=notebooks&a1=Category&v1=Mini&series_name=mini210_series&jumpid=in_R329_prodexp/hhoslp/psg/notebooks/Mini/mini210_series (Accessed 10 February 2010).
Hewlett Packard (2010j) Our vision and strategy [Online]. Available at http://www.hp.com/hpinfo/abouthp/diversity/vision.html (Accessed 05 February 2010).
HP - The World's Largest PC Maker of 2007 (2008). Available at: http://www.laptopsarena.com/hp-the-worlds-largest-pc-maker-of-2007/ (Accessed 06 February 2010)
HP Suppliers (2008) Available at: http://www.hp.com/hpinfo/globalcitizenship/environment/supplychain/supplier_list.pdf (Accessed: 2 February).
Hurd, M. (2008) Ethics and compliance. Available at: http://www.hp.com/hpinfo/globalcitizenship/gcreport/ethics.html (Accessed 06 February 2010).
Kanellos, M. (2008) Who's the biggest PC maker ever?. Available at: http://news.cnet.com/8301-10784_3-6177405-7.html (Accessed 05 February 2010).
MacNealy, J. (2004) 'HP- Business Process Outsourcing', Inside Outsourcing, 20 December [Online] Available at: http://www.issg.net/pdf/InsideOutsourcing_v2i12_MarcSchwarz.pdf (Accessed: 26 January 2010).
Moore, G. (1965) Moore's Law. Available at: http://www.intel.com/technology/mooreslaw/ (Accessed 06 February 2010).
Nonstop Computing (2010). Available at: http://h20338.www2.hp.com/NonStopComputing/downloads/HPML.xls (Accessed 10 February 2010).
Pike, J. and Abels, T. (2006) Management by Contract in the virtual data centre. Available at: http://www.dell.com/downloads/global/power/ps2q06-20060250-Abels-OE.pdf (Accessed 06 February 2010).
Shane, D., Schneider, C. and Giamanco, G. (2009) HP Reports Fourth Quarter 2009 Results [Online]. Available at: http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9MjE1MDV8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 (Accessed 1 February 2010).
Verstraete, C. (2009) 'HP Supply Chain: Buy/Sell and Manufacturing Outsourcing', Community Home, 6 August. Available at: http://www.communities.hp.com/online/blogs/manufacturing-distribution/archive/2009/06/08/hp-supply-chain-buy-sell-and-manufacturing-outsourcing.aspx (Accessed 2 February 2010)
World of quality (2006) Available at: http://h71028.www7.hp.com/ERC/downloads/EMEAQualityAssuranceManual.pdf (Accessed: 28 January 2010).
Yahoo Finance (2010) Available at: http://finance.yahoo.com/q/co?s=HPQ (Accessed: 2 February2010).
Inbound Logistics Operations Outbound Logistics Marketing & Sales Services
Order raw materials / Goods from OEM (Original Equipment Manufacture).
Use JIT (Just in Time) ordering to minimize the inventory.
Heavily depends on
Intel and Microsoft
(Hewlett Packard, 2009)
Lots of manufacturing processes complete using outsourced companies as well as by their own manufacturing plants
Some parts of manufacturing processes are outsourced to OEM companies as well
(Hewlett Packard, 2009)
HP PSG uses external partners for warehousing and distribution processes
(Hewlett Packard, 2009)
HP PSG is doing their marketing and sales using different kind of partner's .retailers, resellers, distribution partners, independent distributors, original equipment manufacturers and independent software vendors. As well as HP PSG responsible for customer needs partners must aware it.
(Hewlett Packard, 2009)
(Hewlett Packard, 2009)
Provide after sale services, Accessories upgrading services, IT supports services, consulting, integration, and outsourcing services.
(Hewlett Packard, 2009)
HP has seven business segments globally. Personal Systems group is one of business segment of Hewlett Packard
(Hewlett-Packard Company - Computer Business Review, 2008)
HP has good research and development framework. They invested $2.8 billion for research and development in last fiscal year. (Hewlett Packard, 2009)
Human Resource Management
Approximately there are 304,000 employees working for Hewlett Packard world widely. Employees are categorised into to top-down structure. HP is requiting, hiring and training employees (Hewlett Packard, 2009)
Major power of negotiate with suppliers. Always use secondary basis partners as suppliers and purchase raw materials (Hewlett Packard, 2009)
Personal Computers & accessories