HP is an international giant in the information technology industry. The company offers a wide product portfolio from personal computers (PC), notebooks, serves, storage, printers, scanners, and digital camera to IT services. The company features a phenomenal growth history and has developed from a “garage” with a working capital of $538 in 1938 to a leading global provider with $100 billion revenue. However the global competition becomes fiercer today and HP has to face with different competitors in all business segments. Can HP continue its success story and beat the global competitors? This question will be tried to answer in the present study.
In this study the internal and external environment factors effecting HP’s business are analyzed. Thereby industry’s economic features and competitive environment, e.g. market segments, market size and growth, trends, competition, and driving forces are studied. Moreover, the SWOT of HP and its biggest global competitors as well as financial performance of HP over the last three business years (2005 – 2007) are analyzed. The diversified business portfolio of HP is evaluated using the Nine Cell Matrix and concrete recommendations for the senior management board of HP are provided.
It could be shown that despite fierce competition HP could remain its pole position in the world market. HP is worldwide No. 1 in the printing, PC, and server market and No. 2 in storage business. HP exhibited an impressive financial performance in the last 3 years. For the future HP should intensify strategic alliances and partnerships and boost the acquisition to strengthen competitive capability and to gain market share quickly. The company should follow strategies like rapid expanding into new geography markets, rapid product development and push the product innovation, penetration also in low-end market segments, expanding into online sale and business, and offering complete solution based on broad portfolio in order to meet customer needs. Moreover HP should improve its supply chain management, optimize manufacturing cost, and strengthen the effective marketing and channel partnership to boost the completive strengths.
Table of Contents
1 Introduction
2 Main Part
2.1 Economic features of the industry segments
2.1.1 IT Services
2.1.2 Personal computers (PC)
2.1.3 Enterprise Storage and Servers
2.1.4 Imaging and Printing
2.2 HP – a short overview
2.3 Analysis of the financial performance of HP (2005 – 2007)
2.4 SWOT analysis of HP and its biggest global competitor
2.4.1 SWOT analysis of HP
2.4.2 SWOT analysis of IBM
2.4.3 SWOT analysis of Dell
2.5 Evaluation of HP’s business portfolio using Nine Cell Matrix
2.6 Recommendations for HP
3 Conclusion
Objectives and Topics
This study examines the internal and external environmental factors affecting Hewlett-Packard (HP) to develop strategic recommendations that enhance its competitive advantage and long-term profitability. By analyzing market trends, financial performance, and business unit portfolios, the research addresses HP's ability to maintain its market leadership amidst aggressive global competition.
- Industry-specific economic analysis (IT services, PC, storage, servers, printing).
- SWOT analysis of HP and its primary global competitors (IBM and Dell).
- Evaluation of business portfolio competitiveness using the Nine Cell Matrix.
- Analysis of HP's financial performance between 2005 and 2007.
- Strategic recommendations for future growth and market positioning.
Excerpt from the Book
2.4.1 SWOT analysis of HP
a) Resource strengths:
• Core competencies and technological leadership in different industry segments (printer, PC, server, storage…).
• Broad intellectual property portfolio and high R&D capabilities.
• Major global player and market leader in several markets, e.g. in PC, printer, and server market.
• Wide product portfolio (from hardware and software to services).
• Strong financial capability.
• Strong brand name and leverage scale advantages from brand to procurement leverage.
• Multinational market presence and high global distribution capability (from retail and commercial channels to direct sales).
• Large customer base.
• Strong new management team (Mark Hurd, the new CEO from 2005, is characterized by under-promising and over-delivering on results).
Summary of Chapters
1 Introduction: Provides an overview of HP's current market situation, the strategic rationale behind its acquisitions, and the central objective of the study.
2 Main Part: Analyzes the economic conditions of specific industry segments, HP's organizational structure, financial health, and performs a comparative SWOT analysis against key rivals.
2.1 Economic features of the industry segments: Examines market dynamics, growth drivers, and competitive forces across the IT services, PC, storage/servers, and imaging/printing sectors.
2.1.1 IT Services: Discusses the transition toward selective outsourcing, pricing pressures, and the importance of global presence in the IT service market.
2.1.2 Personal computers (PC): Explores global shipment growth, regional variations, and the battle for market leadership between HP and Dell.
2.1.3 Enterprise Storage and Servers: Details the rapid technological shifts and the consolidation trends within the server and disk storage industry.
2.1.4 Imaging and Printing: Analyzes the maturation of the digital camera market and the shift toward multifunctional products in the printer segment.
2.2 HP – a short overview: Describes HP's broad organizational portfolio and the seven primary business segments established in 2007.
2.3 Analysis of the financial performance of HP (2005 – 2007): Highlights the company's significant growth in revenue and net earnings over the three-year period.
2.4 SWOT analysis of HP and its biggest global competitor: Compares HP's strengths and weaknesses against major rivals like IBM and Dell to contextualize its market position.
2.4.1 SWOT analysis of HP: Identifies key internal strengths, weaknesses, opportunities, and threats specific to HP's operations.
2.4.2 SWOT analysis of IBM: Evaluates the high-end market leadership and resource capabilities of HP's competitor, IBM.
2.4.3 SWOT analysis of Dell: Assesses the efficiency of Dell's direct sales model and its positioning in the low-end market segment.
2.5 Evaluation of HP’s business portfolio using Nine Cell Matrix: Applies the NCM framework to determine resource allocation priorities for HP's business units.
2.6 Recommendations for HP: Offers strategic advice on acquisitions, geographic expansion, and operational improvements to maintain competitive superiority.
3 Conclusion: Synthesizes the study's findings and reaffirms the validity of HP's growth-oriented strategic path in a competitive environment.
Keywords
Hewlett-Packard, HP, Strategic Management, IT Services, Personal Computers, Enterprise Storage, Servers, Imaging and Printing, SWOT Analysis, Nine Cell Matrix, Market Share, Global Competition, Financial Performance, Business Portfolio, Technological Innovation
Frequently Asked Questions
What is the primary focus of this study?
This study focuses on analyzing Hewlett-Packard's competitive position within the global IT industry, examining internal and external environment factors to recommend strategic actions for long-term success.
What are the central themes discussed in this document?
The core themes include the economic features of IT industry segments, HP's organizational portfolio, competitive benchmarking against IBM and Dell, and the application of strategic management frameworks like SWOT and the Nine Cell Matrix.
What is the core objective of the research?
The research aims to determine if HP can sustain its market leadership and beat global competitors by evaluating its business segments and proposing strategies to improve its overall competitive strength.
What methodology does the author use?
The author utilizes an analytical approach, incorporating market research data to conduct a SWOT analysis and using the Nine Cell Matrix to evaluate the attractiveness and competitiveness of HP's diverse business units.
What topics are covered in the main section?
The main section covers economic analysis of key industry segments (IT services, PCs, Storage, Printing), an overview of HP's business segments, financial performance evaluation (2005-2007), and a comparative analysis of key competitors.
Which keywords define this work?
Key terms include Strategic Management, HP, IT Services, Competitive Advantage, SWOT Analysis, Nine Cell Matrix, Market Share, and Business Portfolio.
How did HP's financial performance change between 2005 and 2007?
HP experienced impressive financial growth, with net revenue increasing by 25% and net earnings tripling during this three-year period, reflecting the effectiveness of its corporate strategy.
What is the significance of the Nine Cell Matrix analysis in this study?
The Nine Cell Matrix is used to plot HP’s business units according to industry attractiveness and competitive strength, ultimately providing a strategic "grow and build" prescription for resource allocation.
What specific strategic recommendations are provided for HP?
Recommendations include intensifying strategic alliances, pursuing acquisitions in IT services, expanding into BRIC countries, and focusing on product innovation, particularly in trendy designs and environmentally sound technologies.
- Quote paper
- Dr. Khanh Pham-Gia (Author), 2008, Case study: Hewlett-Packard – Any chance to beat its global competitors?, Munich, GRIN Verlag, https://www.grin.com/document/132249
