The Strategic Management Process for Hewlett Packard Corporation
Table of Contents:
HP’s Macro Environment: PEST Analysis…………….3
HP’s Micro Environment: Porter’s Five Forces…….…9
Issues and problems…………………………………..13
Alternative Proposition and Evaluation……….……..14
Recommendation and Implementation………………16
This research proposal focuses on Hewlett-Packard Company, one of the biggest information technology corporations of the world and comes second after IBM. With a global presence in various fields such as computing, digital imaging, printing, the corporation also offers software programs and other related services. Hewlett-Packard Corporation (HP) is a principal seller of peripherals, desktop computers, servers, and various support services. Malone, through his article states that since 1983, the company has grown to incorporate 86,000 employees who contributed to sales of over $48 billion in 2009. The company also manufactures measurement, testing and medical equipment under a current manufacturing company, Agilent Technologies since 2000. Most of the company’s sales, over 50%, are made outside the United States of America and comprise of over 85% sales in computers and interrelated products. The culture, vision, and environment created by the co-founders are exceptionally much alive today and continually define Hewlett-Packard uniquely from the pack (Malone, pg. 40).
The Hewlett-Packard Company mission and vision statement is; “To provide products, services and solutions of the highest quality and deliver more value to our customers that earn their respect and loyalty, to achieve sufficient profit to finance our company growth, to grow by continually providing useful and significant products, to view change in the market as an opportunity to grow and to help HP employees share in the company’s success that they make possible and to provide people with employment opportunities based on performance” (Malone, 2007, pg. 40). Hewlett-Packard Company (HP) is a provider of technological solutions to consumers, businesses and institutions globally. The company’s products and services are evident in information technology equipments, personal computing and access devices, tablet personal computers, global services, imaging and printing. Product and service grouping comprise of notebooks, printing and multifunction, desktops and workstations, monitors and projectors, handheld devices, copiers and scanners, fax, digital photography, storage, servers, entertainment, networking, supplies and accessories and software products (Malone, pg. 40).
HP’s Macro Environment: PEST Analysis
Private ownership of corporations is a dominant system in the United States market, private and home businesses. These corporations are also allowed to decentralize decision making. Fortune on CNNMoney.com on March 22, 2010 reported that the free business system of the United States is made evident by the output and production of various private businesses. Statistics have it that approximately two-thirds of the largely American economic productivity is made possible by private businesses and individuals. It is only a third of the production that goes to the government. A critical look on a political platform, statistical division point out that consumers and private businesses have a more critical role in the business sector. Still, the government takes part in an important part of the country’s economy as well as the business sector by developing and enforcing various business-related laws which comprise of business and property right security as well as the ruling out of business practices that are alleged as unwarranted. The government also ensures that proper safety standards are put into place (Fortune on CNNMoney.com).
The United States economy is well thought-out as one of the leading in the globe. The businesses in the country are mainly market-oriented where most decisions and activities are developed by the people. This is evident from the annual acquisitions of the American consumers, which totals to over 5 trillion dollars on average every year. According to Fortune on CNNMoney.com, it states that approximately 80% of the total services and goods produced in the United States businesses are supported and purchased locally. The vigor of the United States economy is mostly accredited to its diverse and rich business segments. One of the most significant segments in the country is the industrialized industry. HP is essentially under the industrial machinery segment where computers, engines and other paraphernalia are created. This sector in fact accounts for 10.7% of the yearly total value from manufacturers (Fortune, 2010). This puts forward the capacity of the American to subsist high-quality standard of living. There are economic-related problems in the United States that could hinder the growth and strategic planning in the economy. One of the hindrances is the noteworthy level of joblessness rate in the country. In addition, it has been reported that that a sizeable proportion of young Americans do not graduate even after joining various institutions (FORTUNE on CNNMoney.com).
United States of America is the third most populated country and is estimated to have 296 million people (Fortune on CNNMoney.com) which entail a pluralistic society. This shows that the inhabitants of the country are extremely varied in terms of races, religions and nationalities. In addition to the existence of various minority groups, the multiplicity in the country can also be owed to influx of immigrant workers and open trade. The increase of immigrant employees puts forward the growing working segment of the country, which augments the need for technology and computers. Certain problems are evident in the employment sector. For instance, the wages paid to workers in some states have been found not to meet the minimum criterion. Sixteen states in the US offer wages higher than the minimum which is at least $5.15 per every hour. There are other 26 states that offer minimum wages founded on the national level. Kansas and Ohio on the other hand provide wages lower than the minimum, whereas six other states have not affected any state laws (Fortune on CNNMoney.com). The setback on gender-bias is also an incidence as female workers on average earn a smaller amount than 10 percent than their male counter-parts, undertaking same tasks and with similar level of education and training. (Microsoft Encarta Online Encyclopedia, 2005).
United States was the first country to use computer and internet in the world, therefore the society is highly adapted to the technology. Statistics have suggested that the employment sector is incessantly employing computers and related tools in their employment activities; this to a great extent contributed to the development of the computer industry. In addition, job opportunities for computer experts have doubled from 1996 until 2009. People have also got accustomed in employing the internet to pay bills, work, shop and reserve airline tickets. Recent statistics have showed that over 84 million Americans have access to the internet either at work or at home (Microsoft Encarta Online Encyclopedia, 2005).
From the information of the company’s large-scale environment, a number of strengths can be identified. One of which is the stability, both economically and politically, of the United States. With a first-class political situation, HP and other related companies’ policies will be supported and regulated by well-established business laws; this will encourage reasonable competition in the industry. In addition, as the country utilizes a decentralized process of decision-making between businesses, HP has the authorization to come up with policies that suits its available resources and needs. Apart from these, the result of the policies and production of HP will be concerted on the company bearing in mind that only a little part of its financial gains will be taken by the government (Fortune on CNNMoney.com ).This will enable HP to achieve fast returns on investments and get sufficient funds for development of other strategies. The data from the macro environment shows that potential success and growth are very probable. One suggestion is the presence of a great target market for HP, bearing in mind the United States high population.
Taking SWOT analysis as in Christensen, 2005 Hewlett-Packard’s analysis breaks down into the following:
1. In the computer and printer manufacturing industry, Hewlett-Packard has got a strong and a well established brand name. This strength is predominantly helpful in gaining new buyers, market positioning, and in growing profit margins.
2. HP has taken a majority of printer and computer market as compared to the competition. By use of the large market, the company can continue gaining profits and also acquire the capital to hold up its business strategies and project plans.
3. HP has made it in establishing key channels of distribution which enables it to promote its goods in the most successful way.
4. The company has got capital that enables it to preserve a large and professional workforce. Besides, it also has the competence to subdivide its workforce into functional departments where extremely skilled and talented professionals can be assigned. With such a workforce, HP can make sure that there is quality and speed in its production.
5. The company has been in business for many years. The many years of triumphant business processes has strengthened its ability to conquer past and also fresh challenges with tested and tried strategies. This competence has also allowed HP to bring in its new products and put into practice policies at the right place and time.
1. The company has got the capability of acquiring helpful customer information. However, because of the volume, the corporation is not able to evaluate all the important information. It is a must for Hp to put in place a team that will be responsible of sorting market details and constructing them into usable policies.
2. The company has experienced some times when it was unable to carry on steady growth.
1. The corporation can employ other means of distribution such as retailing on the internet, which can possibly augment its market access as well as its sales.
2. The continued use of computers and printers by home owners and workers in various offices, suggest that these devices will continue being in demand for many more years.
3. The capability of the corporation to get important consumer information enables it to come up with products based on the present consumer needs and preferences. This enables the corporation to come up with new products and also establish customer loyalty and satisfaction.
1. The printer and computer industries are both exceedingly competitive industries. In the computer manufacturing industry, key companies such as Dell, Compaq and IBM are some of the key companies manufacturing related products. On the other hand, Canon and Epson are examples of the key rivals of HP in the printer manufacturing.
2. A variety of marketing threats are also well thought-out as threats for the corporation. Although HP can employ any possible marketing approach, its consequence on the market can differ. These effects must be scrutinized comprehensively as it could to a great extent have an effect on the business upshot (Christensen, 2003).
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