Company and Industry Description
The Hewlett-Packard Company is a multinational corporation that provides products, software, and technology solutions. It serves individual customers, small businesses, large scale cooperates, and government establishments. It is the world leading personal computer manufacturer, specializing in developing networking and data storage devices. The company has a genuine commitment to environmental sustainability and social responsibility, which help boost its leadership in the market. It continues to innovate and adjust its strategies while recommitting to its vision through evolving processes.
HP uses its sustainability strategy to encourage revenue growth through several approaches. They include winning new businesses while retaining the existing ones and expansion of its distribution in numerous regions. It also charges a premium price for energy-efficient products while entering a new market to ensure growth. As a result, it has grown to a $100 billion technology company that operates in more than 170 countries.
The Information Technology industry has scores of players who are trying to outdo one another in a bid to attract and retain more customers. HP is using a threefold approach to help it stay ahead of its competitors, which is also a part of its sustainability strategy. It ensures that its suppliers adhere to a stringent code of conduct that involves ensuring low carbon emissions. It also keeps on track of the trends in the enterprise business and individual consumer market. Lastly, it educates its employees on values that promote performance and those that are consistent with its objectives.
The company is beginning to realize that working on environmental and sustainability initiatives is beneficial as it tackles issues of interest to the customers. The priorities for this include raising the social environmental standards, improving the operations of energy efficiency, and promoting product reuse. They reflect the company’s commitment to balancing corporate values and business goals with the environmental impacts.
Environment and seasoned trends
The company has pillars that help in the supervision of current environment and business trends. Another major strategy that it uses is creating a human rights and labor practice atmosphere. The last is the social investments and philanthropy. HP shows a trend that effectively balances current needs with future opportunities. It also consistently outperforms its competitors in revenue growth, profitability, and total return to shareholders. With time, it has managed to show sustenance in superiority and business cycles.
Products and services
HP provides an assortment of computer technology products in addition to other assorted technical centred services to its customers. These products include laptops, desktops, tablet personal computers, servers, and storage devices. Other common and fast moving products include smart phones, monitors, calculators, scanners, workstations, and many more. The company provides services such as cloud computing, networking, storage, as well as after sale and warranty services.
SWOT Analysis/Target Segmentation
Innovation: HP emphasizes innovation as a key element to its business culture and a driver to success. It spends a larger portion of its budget on research and development than its competitors. This helps it design and develop products, solutions, and services in the latest technology trends.
Size and scale: it is the largest company of its kind, with its business units being the most popular in the information sector. It has access to funds, clients, and resources that are inaccessible to minor competitors.
Synergy among business units: it influences its assortment of products and services due to its size. Most importantly, it provides servers, storage, and networking products in a design that can work well with HP service units.
Brand name: HP is among the most recognized brand names with its logo being a symbol of quality, reliability, and innovation in all the 170 countries it operates in.
The company’s size prevents it from making agile movements into new markets or out of previous ones. This is due to the red tape and bureaucracy that is within the firm.
It made acquisitions such as mercury interactive, Compaq, and electronic data systems in the first decade of the millennium. Its recent acquisitions are overpriced by self-government in revenues.
i) The image and printing group
This presents valuable opportunities for future growth if the company capitalizes on high margins. The management accelerates high usage units and pursues recurring business with high-value customers.
ii) The cloud
The company presents a field of customer friendly products and services. This enable its to indulge in practical trends meant to build efficiency levels including a bold move to cloud centred services.It quickly establishes itself as a front runner in the information sector. It has the HP cloud Assure, HP Mag Cloud, and Cloud Service automation.
iii) Supply Chain Management
It has plans to optimize its supply chain by reducing complexity, eliminating fixed costs, and leveraging its scale. This in turn increases the inventory of components, which allow it to obtain them at a good price.
Competitive Partner Relationships: HP has various business units, each with individually operating competitors. The amount it invests on every segment is crucial for its success. Once it underfunds one business unit, it triggers lesser financial, technical, and marketing resources.
Intense competition in Hardware Division: the personal computing and printing markets are highly competitive, which results to aggressive price competitions. They decrease the company’s margins as minor competitors also lower their prices.
Third party suppliers: HP depends on third party suppliers, which means that if it fails to manage them properly, revenue and gross margins suffer enormously. There are also risks of shortage, oversupply, and contractual threats.
HP’s top competitors are IBM, Dell, and Accenture. IBM and Accenture compete with it on services and software, while Dell competes with it in the PSG (Personal System Group) and IPG (Image and Printing Group) groups. Although these companies are relatively large, they focus more on their offerings in comparison to HP, which is so large and disjointed. For instance, IBM is 80% HP’s size but has a market segment that is three times larger.
The five forces by Michael Porter are threats of new entry, supplier power, buyer power, internal competition, and substitutes. The PSG division operates in the electronics industry, which is a highly competitive market. Its margins are extremely narrow and electronics are generating low profits because they are turning out to be commodities. The HP, Dell, and Apple Acer companies are all termed as reliable in order to convince customers to choose their products. There is a moderate bargaining power among the buyers because they are numerous, although they are not enough to influence HP directly. The buyers have the power to influence changes in taste, while the suppliers’ bargaining power is high because they are few in number.
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