Hp Case Study

Hewlett-Packard

The Company In 1938, two Stanford graduates in electrical engineering, William Hewlett and David Packard, started their own business in a garage behind Packard’s Palo Alto home. One year later, Hewlett and Packard formalized their business into a partnership called Hewlett-Packard. HP was incorporated in 1947 and began offering stock for public trading 10 years later. Annual net revenue for the company grew from $5. 5 million in 1951 to $3 billion in 1980. By 1997, annual net revenue exceeded $42 billion and HP had become the world’s second-largest computer supplier. The company, which originally produced audio oscillators, introduced its first computer in 1966. In 1972, the company pioneered the era of personal computing by introducing the first scientific, hand-held calculator.

Hewlett-Packard introduced its first personal computer in 1980. Five years later, HP introduced the LaserJet printer, which would become the company’s most successful product ever. The HP Way In 1956, Bill Hewlett, Dave Packard, and a handful of other HP executives gathered at the Mission Inn in Sonoma, California, to create a set of values and principles to guide their company. The six objectives that this small group subsequently created not only helped shape “a new kind of company but ultimately became the foundation for what came to be known as “the HP way.

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Current Situation Current Performance See Appendix 1 Strategic Posture Mission Statement of Hewlett Packard “We are committed to developing a wide range of innovative products and multimedia services that challenge the way consumers access and enjoy digital entertainment. By ensuring synergy between businesses within the organization, we are also constantly striving to create exciting new worlds of entertainment that can be experienced on a variety of different products. ”

Vision statement of Hewlett Packard We recognize and seize opportunities for growth that builds upon our strengths and competencies. ” Improved Mission statement To provide a product, services, and solution of the highest quality and deliver more value to our customers that earn their respect and loyalty. Improved Vision statement To view change in the market as an opportunity to grow, to use our profit, and to the ability to develop and produce innovative products, services, and solutions that satisfy customers' needs. Why? They are brief and to the point. It is highlighting all of the main points.

Comparison of Mission statement to a leading competitor statement IBM IBM, we strive to lead in the invention, development, and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems, and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services, and consulting businesses worldwide. DELL Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.

Threats: Globally acceptable software used in the laptops which makes them easy to use and Competitor’s technology & pricing.  Less global coverage than competitors. Low compatibility with non- HP product. The prices are very affordable. Booming of mobile technology such as IPAD and iPhone. The potential for using technology is very high. Due to tough competition, the bargaining power of customers is low. One of the top market leaders with a trusted Brand name. The HP continuously keeps on updating its technology which keeps the interest of the customers intact. High product differentiation (servers, Laptops, scanners Printers, and others. Expansion of retail stores for customer convenience. Participation in the joint ventures. Mass production leads to high bargaining supplier power.

Multi-vendor customer services, including infrastructure technology and business process outsourcing, technology support and maintenance, application development and support services, and consulting and integration services. The financial condition leans very heavily on the state of the economy not just in the US but worldwide. HP has a strong internal position. The financial position leans very heavily on the position in each. state of the economy not just in the US but.

The company competes both at local and international|worldwide. It has increased its competitiveness. Struggling to Add Value and Remain Profitable in policies and strategies that support the free-market. Low-Cost High-Volume PC Business. The R&D department has significantly fewer investments. Strong financial position. |compared to historical spending. Leading provider of personal computers and imaging. Slow speed to market or responsiveness the past and printing. acquisition of Peregrine made. Good Operational Efficiency. HP’s portfolio is even more diverse and complete but, Multi-vendor customer services, including. HP Open View’s lack of mainframe management infrastructure technology and business capabilities created several problems. Lack of in-house management consulting division. Dependency on third-party suppliers, and our services and consulting and integration services. Revenue and gross margin could suffer if HP fails. Highly talented workforce. to manage suppliers properly. Ability to provide end-to-end IT solution H/W.

Pay cuts have brought low morale to employees. Application development and support. HP did not yet hit a CMDB product that includes. Hewlett-Packard is a global enterprise and discovery and mapping. This causes many customers especially after its merger with Compaq, the company|to switch the brand. Became the world’s biggest computer hardware and peripherals consort in the world and has ranked 20th in the Fortune 500 list.

There are a large number of factors that can be considered and each industry will have its own key features that should be included in the detailed SPACE evaluation. A few factors to be considered to give you a flavor of what to include in your SPACE analysis are listed below.

SPACE Analysis Factors For Financial Strength.

• Return on Sales
• Return on Assets
• Cash Flow
• Gearing
• Working Capital Intensity SPACE Analysis Factors For Competitive Advantage
• Market Share
• Quality
• Customer Loyalty
• Cost Levels
• Product Range SPACE Analysis Factors For Industry Attractiveness
• Growth Potential
• Life Cycle Stage
• Entry Barriers
• Customer Power
• Substitutes SPACE Analysis Factors For Environmental Stability
• Political Uncertainty
• Interest Rates Technology
• Cyclical

Environmental Issues Interpreting the SPACE Analysis Matrix Diagram The arrow indicating the strategic thrust can be drawn from the origin by calculating the net result on each axis and plotting this net position. The Aggressive posture in the SPACE Analysis Matrix occurs when all the dimensions are positive. The implicit strategy is to aggressively grow the business raising the stakes for all competitors. The main danger is complacency? According to the space matrix score HP falls in the “AGGRESSIVE quadrant”. Their strategies should be one of the following: Vertical and horizontal integration1 Market penetration2

This orientation typically will require additional time and development cost to optimize product cost and the manufacturing process. Low Development Cost. This orientation focuses on minimizing development costs or developing products within a constrained budget. While this orientation is not as common as the other orientations, it occurs when companies are developing products under contract for other parties, where a company has severely constrained financial resources, or where a "stealth" development effort is being undertaken on a "shoestring". This orientation is somewhat compatible with time-to-market but involves tradeoffs with product performance, innovation, cost, and reliability. Product Performance, Technology & Innovation. This orientation focuses on having the highest level of product performance, the highest level of functionality or functions and features, the latest technology or the highest level of product innovation. This orientation can be pursued by companies in many industries or many products except commodity products. The pursuit of this strategy involves higher risks with newer technologies and accepts a trade-off of time and cost to pursue these objectives. Quality, Reliability, Robustness |This orientation focuses on assuring high levels of product quality, reliability, and robustness.

This orientation is typical of industries requiring high quality because of the significant costs to correct a problem (e. g. , recalls in the automotive or food processing industries), the need for high levels of reliability (e. g. , aerospace products), or where there are significant safety issues (e. g. , medical devices, pharmaceuticals, commercial aircraft, nuclear plants, etc. ). This orientation requires added time and cost for planning, testing, analysis, and regulatory approvals. Service, Responsiveness & Flexibility. This orientation focuses on providing a high level of service, being very responsive to customer requirements as part of development, and maintaining the flexibility to respond to new customers, new markets, and new opportunities. This orientation requires additional resources (and their related costs) to provide this service and responsiveness.

The processes and results must be measurable in a reasonably objective and consistent manner. The focus should be on the most significant elements in a process – the ones that account for the highest proportion of exposure or the greatest no. of problems. Establish standards of Performance: Standards used to measure performance are detailed expressions of strategic objectives. They are measures of acceptable performance results. Each standard can usually include a tolerance range, which defines any acceptable deviations. Standards can be set not only for final output but also for intermediate stages of production output. Measure actual performance. Measurements must be made at predetermined times. Compare actual performance with the standard – if the actual performance results are within the desired tolerance range, the measurement process stops here. 5. Take corrective action: If the actual results fall outside the desired tolerance range, action must be taken to correct the deviation. The action must not only correct the deviation but also prevent its recurrence.

The following issues must be resolved:

• Is the deviation only a chance fluctuation?
• Are the processes being carried out incorrectly?
• Are the processes appropriate for achieving the desired standards? Objectives of Strategy Evaluation and Control Organizations are most vulnerable when they are at the peak of their success.
• Erroneous strategic decisions can inflict severe penalties and can be exceedingly difficult, if not impossible, to reverse.
• Strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problems before a situation becomes critical. Appendix A Gross profit margin ratio The gross profit has increased from 23. 61% to 24. 53%. This means that profitability at the basic level has increased from the previous year. This is a sign of a good ratio. Operating profit margin Profitability before interest and tax has increased from 4. 00% to 7. 15%.

This means that the efficiency of the business before taking any financing has increased from the previous year. This also is a sign of a good ratio. Net profit margin This also has increased from 2. 7% to 6. 76%. This means that overall profitability has also increased. This is a sign of a good ratio. The current ratio has decreased from 1. 38 to 1. 35. This means that working capital to meet short term obligations has decreased, which shows poor use of working capital. This is a sign of a bad ratio. Quick ratio This ratio has also decreased from 1. 16 to 1. 13. So this shows that the ability to pay immediate financial obligations has also decreased. This quick ratio is acceptable but has decreased.

Inventory turnover ratio The ratio has decreased from 9. 63 to 8. 93, which means that more capital is tied up in inventory which is not a good sign. Sales to receivables ratio It also has decreased from 8. 75 to 8. 43. This means that the efficiency in collecting accounts receivables has deceased. Return on assets This ratio has increased from 6. 9% to 13. 0%. This is the sign of a good ratio. Debt to worth ratio This ratio has decreased to 6. 52% from 9. 12%. This means that debt financing has decreased and hence the risk also has decreased. Working capital. Working capital has increased from $11,874 to $12,414.

This shows that the ability of a company to endure difficult financial periods has increased.

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