THE EXTERNAL ENVIRONMENT

OF HEWLETT PACKARD
Submitted by: Zubair Ahmed Memon

Submitted to:
Sir Adnan Kehar
The External Environment of Hewlett Packard

The firm’s external environment is challenging and complex. Because of the external environment’s
effect on performance, the firm must develop the skills required to identify opportunities and threats
existing in that environment.

The external environment analysis enables company to identify different factors in the environment that
directly affect its operations, growth, sustainability and profitability and that analysis helps company to
use its resources and capabilities in a way that it can help to have competitive advantage in order to face
environmental challenges and maintain its market share.

The article that I have chosen discusses the environment analysis of Hewlett Packard (HP). HP is one
of the leading providers of technology products, software and services in almost 170 countries. The
company supplies a range of products including Notebooks, Tablet Computers, Workstations, Servers,
Storage, Printers, Software and services and more.

Due to increased competition and customer rapid change in market company faces some challenge that
it has responded through product design and innovation. There are some forces in the market that affect
the business of HP.

Political:
The political environment across nations and globally has major effect on computer brands like HP. For
companies that operate globally, the political environment in different nations and political stability
matters. Highly stable political environment means it is better for companies to operate. Due to the
international nature of HP’s business any policies adopted by different nations that favor the domestic
brands over the foreign brands can be harmful for HP’s business health.

Economic:
Economic uncertainty and fluctuations are prevailing in some markets. HP’s exposure to such
fluctuations give rise to potential risk factors. Strengthening of the dollar against any foreign currency
gives rise to risk that results decline in revenue.

Social:
The social trends also have the ability to impact the sales of particular products. Mobile computing has
caught on and more and more people are now using mobile devices like tablets and large screen smart
phones which has led to a decline in the sales of the PC and laptops. People are buying only the products
that are great in quality and offer portability plus efficiency, design is also important. Brands have to
localize their marketing campaigns to sell in various cultures.

Technology:
HP is a technology company and technological innovation is most important factor. In Highly
competitive market only innovative companies can survive. HP invests more in R&D. HP has focused
on providing high quality computing devices and printers.

Environment:
Sustainability has become an important focus area for businesses. HP is also trying to eliminate waste
and to manage the environmental impact of its supply chains.
E.g. HP collected and recycled more than 720 tons at end of service of product that its manufacturing
partner in Brazil generated.

Legal:
HP’s business is subject to several federal state, local and foreign laws. Becoming liable under these
laws in any market can impose huge penalties that can cause huge financial losses for HP. Many
countries through legislation require strict compliance of labor laws and environmental laws nowadays.