Hewlett-Packard Singapore : A Case

Analysis

TWC Assignment 2
Brian Lee Shun Rong
G18

HPs Alex Project: Joint-country project to

develop low-cost inkjet printer in 18 months

Hewlett-Packard (HP) is a multi-national corporation selling electronic

products

More than 90000 employees in 70 divisions worldwide

Computer products contributed to 75% of total sales of > $13 billion

In 1970s, manufacturing operations began in Singapore

After gaining experience in manufacturing, Singapore able to perform good cost

engineering
Computer Products Singapore (CPS) built products of higher quality and lower cost than
USAs Vancouver Division (VCD) by early 1980s

Alex Project was 1988 joint project between VCD in USA and CPS in
Singapore

VCD to primarily work on product and programme, CPS to focus on cost reduction planning
CPS to manufacture printer, VCD to market it

New inkjet printer would be inexpensive yet produce high print quality

Follow-up to the newly launched DeskJet after its product life cycle expired

The Alex Project got cancelled after facing product

technical issues and management problems
OverlyAmbitious
target+ Tight
time-frame

As project
dragged,
there was
drop in
morale as
Singapore
team in
Vancouver
became
home-sick

Two teams in
far apart
countries,
difficult to
physically work
together

Assumption
s made
during
planning
Technical
problems with
the product
resulted in delays
Differences in
educational
systems

Project
management
problems
Cultural
differences

Change in
project manag
in VCD led to
further delay

Differences in
working styles

Alex Project had over-ambitious targets which were

difficult to achieve within such a tight time-frame

Manufacturing costs for the product would have to be really low

for selling price to be cheap

Yet high quality components had to be used to produce high print quality
Hence the difficulty of sourcing for vendors to supply such components at low
prices in a short time

Short time frame of 18 months had never been previously

achieved by HP

Very little buffer time given for possible project delays

Given the challenges of manufacturing the product and it being the first joint
project between two teams belonging to different regions and cultures, delays
were highly possible

Initial feasibility study assumed zero problems in

management of the two teams and ability to reduce
costs dramatically

HP underestimated the difficulty of reducing costs

Assumed that Vancouver and Singapore would be able to work

together effectively

Large-scale cost reduction required a considerable amount of time

However, management assumed CPS would be able to achieve this within a
short time-frame and therefore did not cater enough time for the project

Underestimated difficulty of coordinating product development between teams

not able to physically work together due to proximity and time zone differences
Did not take into account that it was a joint project between teams from two
culturally different countries
Failed to see that factors such as differences in working styles might impact the
synergy between the two teams and therefore the success of the project

These assumptions resulted in over-ambitious targets which made

the Alex Project difficult to succeed

Technical problems with the product

led to major delays in the project

As it turned out, it was more difficult than expected to source for low cost
components

For example, the encoder would have to be cut to less than 20% of its cost in the DeskJet
No vendor could provide it at that cost
Cheap replacements for components used in the DeskJet were available, but they were of
lower quality than desired

Redesigned keypad separately built and assembled into machine

Replacing belt that moved the print head with a wire would lower costs but wire produced lower print
density
Polymer paten would be cheaper than the DeskJets rubber paten, but would cause paper to skew easily

Therefore it was detachable, and failed HP drop test

Small gap between keypad and printer body made users prone to small electric shocks upon
contact

Difficulty of sourcing for vendors to build prototypes in Singapore

Asian vendors unwilling to interrupt long runs for high-volume products to build small amount
of prototypes
Time needed to send an engineering team from Vancouver to CPS to assist them in building
prototypes led to further delays

Management problems arising from societal

differences between the two teams hindered ability to
deal with technical problems

Management
problems
arising from
Differences in
Working
Styles

Vancouver

Singapore

Concentrated on
achieving best
functionality. Therefore
design changes
constantly made
assuming sourcing could
be done.

Wanted to ensure any

changes anticipated
could be accommodated
by vendors.

Cultural
Differences

Accustomed to making
individual decisions
within clear task
boundaries

Accustomed to
consensual decision
making and more
hierarchical system,
therefore prone to delay
when given individual
decisions

Different
Educational

Taught to persuade,
convince and question.

Trained to remember
knowledge in detail

The Capricorn Project, proposed to develop a printer

for the Japanese market entirely in Singapore, carries
more significant benefits than risks

Benefits of
undertaking the
project

Risks of undertaking
the project

If product succeeds in Japan, HP

will dominate their rivals Epson
and Canon globally

If product fails, HPs revenues will

be badly hurt

HP already possessed the

HP was unknown in Japan, where
technological capability, therefore customers purchases tend to be
no funds needed to be spent on
influenced by brand recognition
R&D, thus being able to match
competitors in price and features
Development time considerably
shortened because mechanical
design and chassis of DeskJet will
be recycled
Singapore can manufacture

Proposed design larger than

competitors and will take up
valuable office space, therefore
HP printer might not be attractive
to Japanese consumers

HP should enter Japan for essential growth as

existing capabilities give it a headstart and risks can
be mitigated with proper planning

HP should challenge its competitors by entering the Japanese

market to gain further worldwide market share

Possesses technological capability thus cost of manufacturing and time required

for development largely under control

Experience and expertise gained from development of the Alex Project, such as
prototype manufacturing capabilities and project management skills, can be
applied to Capricorn Project

Risks of undertaking project can be mitigated

The possibility of failure is always present, but HP needs to expand into markets
in which it currently has limited presence for further growth or risk being
overtaken by competitors
Entering the Japanese market would give HP practical experience on how to build up its
competitive advantages
Company has enough liquid assets to stay in business in the event of a market failure,
while buying more time for further efforts to succeed

Marketing campaign can be launched for the Japanese market to make HPs

Recommendation: HP should divide roles for the

Capricorn Project between Vancouver and Singapore,
and carefully plan time required

Make best use of the capabilities of individuals in various locations

Lessons learnt from failure of Alex Project would have given teams as well
as management a clear understanding of the differences in culture and
working styles of Vancouver and Singapore

Completely locate product development, marketing and design in VCD due to high
technology skills
Locate manufacturing in Singapore due to cost advantages of production, labour and
components
Fast improving technology makes it easier for the two teams to communicate and work
together

Good project planning would ensure that teams accommodate each others differences and
use them to complement one another, thus future problems can be dealt with by working
together effectively

More time needs to be allocated for the project

Initial planning should conduct an assessment of expected time needed based on time
spent on previous projects
Buffer time should be given taking into account possible delays in development of product