BUSINESS STRATEGY

Case Study 2

Case Study on Hewlett Packard

Vision Statement: To view change in market as an opportunity to grow, to use our profit and our ability to develop & produce innovative products, services and solutions that satisfy emerging customers need.

Mission Statement: To provide product, services and solution of highest quality and deliver more value to our customers that earn their respect and loyalty.

Evaluation on Vision and Mission of HP

HP Company developed both vision and mission statement. Both of the vision and mission statement have became motivation for their employees in achieving their organizations goal.

The vision of HP Company in overall is considered realistic, achievable and inspiring. It can be said that HP Companys vision is highly achievable as it is the largest company in worldwide personal computer sales. With the strong financial condition, it is believed that HP Company able to carry out more research and development activities in order to produce innovative products, services and solutions. However, HP Companys

vision is lack of challenging and not fully answers the basic question of What do we want to become? They do not state out a clear position that they want to reach.

For the mission statement, it is simple and clear. This enables their stakeholders easy to understand. Besides, the mission is enduring. Nevertheless, this mission statement is not broad in scope as it merely mentioned about to provide highest quality product to their customer but not in other aspects. In addition, it does not reflect judgment about future growth directions. A good mission statement should include nine components. However, HP Company is just included three components, which are Customer, Products or Services and Self-Concept, the other six components are not included (Markets, Technology, Concern for Survival, Growth and Profitability, Philosophy, Concern for Public Image and Concern for Employees).

External Analysis

Opportunities: O1: The biggest advantage of HP for the merger with Compaq is become the worlds biggest computer hardware and Peripherals Company in the world, ranking 20 in the Fortune 500 list. O2: HP is doing business in more than 170 countries including both developing and under-developed countries. Being a large company gives HP many advantages like dominating the market for printers, both laser and ink jet, and both for consumers and companies using the economies of scale. O3: The company is also taking an active role in developing the capacity of new markets all around the world, engaging with other multinational corporations, nongovernmental organizations and other world governing organizations to reignite the competitiveness at home and abroad through policies and strategies that can support free-market economies. This is one of the reasons that make HP a leading technology company in the growing IT markets (HP Annual Report, 2003).

O4: Another advantage to HP is e-commerce expansion. O5: One of the most important advantages to HP is day by day development of imaging and printing business.

Threats:

T1: Intense competition from other PC manufacturers. T2: Slowdown in economic conditions in the world. T3: Increasing competition on imaging and printing. T4: Product recalls and supply chain disruptions. T5: The past acquisition of Peregrine made the HPs portfolio even more diverse and complete but HP Open Views lack of mainframe management capabilities created several problems.

T6: Operating in global market means many competitors and therefore, the company has to be at the forefront of changing technologies as well as addressing the changing customer demands and needs.

T7: The global economics recession is also a threat for the companys sales and profits. The prices have also fallen as the stock markets are at historic low positions. T8: HP is facing a hyper-competitive environment. Although HP recently overtook Dell in sales, the latter remains a formidable competitor, as are other companies such as Toshiba, Lenova Group and Aver. It competes in terms of price, quality, brand, technology, reputation, distribution and range of products, among other factors. In some regions, the company faces competition from local companies and from generically-branded or white box manufacturers.

By considering the opportunities and threats of the company, we assigned weight to them according to their importance. In rating column we assigned rate to each factor in this 1= the response is poor, 2= the response is average, 3= the response is above average and 4= the response is superior. The External Factors Matrix (EFE) is as followed:

External Factors Matrix (EFE) Analysis Key Factors OPPORTUNITIES O1: HP merger with Compaq O2: Business in global markets O3: Developing capacity of new markets O4: e-Commerce expansion O5: Day by day development of imaging & printing business 0.15 0.10 0.10 0.10 0.08 4 4 4 3 3 0.60 0.40 0.40 0.30 0.24 Weight Rating Weighted Score

THREATS T1: Intense competition from other PC manufacturers T2: Slowdown in economic condition T3: Increasing competition on imaging & printing T4: Product recalls and supply chain disruptions T5: The past acquisition of Peregrine T6: Other competitors including Dell are entering the printer business T7: The global economic recession T8: Hyper-competitive environment 0.07 0.05 0.05 3 3 3 0.21 0.15 0.15

0.07 0.05 0.04 0.08 0.06

3 2 3 4 3

0.21 0.10 0.12 0.32 0.18

TOTAL

1.00

3.38

The total weighted scores of external factor evaluation matrix for HP is significantly above 2.5, which is 3.38. Hence, it can be said that HP owned a strong external position and doing their business pretty well.

Internal Analysis

Strengths:

S1: Strong brand equity. S2: Strong financial condition. S3: Trained personals. S4: Solid market position in key segments. S5: Web technology used for product awareness and sale. S6: Diversified product portfolio (offerings spans personal computing and other access devices, imaging and printing-related products and services, enterprise information technology infrastructure, multi-vendor customer services, consulting and integration and outsourcing services).

Weaknesses:

W1: Lack of in-house management consulting division. W2: Internal control issues. W3: Unrest among internal employees due to pay cuts and lack of people care. W4: No Good People retention policy or HR practices to ensure employee is protected. W5: Intellectual Capital is under estimated. W6: No aggressive investments in R&D compared to historical spending.

In the table below, we have done the internal evaluation of the firm by taking some major factors as Strengths and Weakness of the firm. After identifying the strengths and weaknesses we assigned weight to them according to their importance. In rating column we assigned rate to each factor in this 1= Major Weakness, 2= Minor Weakness, 3= Minor Strength and 4= Major Strength. Then we multiplied the weight with rating and

took the sum of score, which is 2.64, which shows that the firm is performing above average.

Internal Factors Matrix (IFE) Analysis Key Factors STRENGTHS S1: Strong brand equity S2: Strong financial condition S3: Trained personals S4: Solid market position in key segments. S5: Web technology used for product awareness and sale S6: Diversified product portfolio WEAKNESSES W1: Lack of in-house management consulting division W2: Internal control issues W3: Unrest among internal employees W4: No Good People retention policy W5: Intellectual Capital is under estimated W6: No aggressive investments in R&D TOTAL Weight 0.14 0.10 0.09 0.13 0.10 0.14 Rating 4 4 3 3 2 2 Weighted Score 0.56 0.40 0.27 0.39 0.20 0.28

0.03 0.04 0.05 0.06 0.05 0.07

2 2 2 1 2 2

0.06 0.08 0.10 0.06 0.10 0.14

1.00

2.64

The total weighted scores of internal factor evaluation matrix for HP is significantly above 2.5, which are 2.64. Hence, it can be said that HP owned a strong internal position.