American International University-Bangladesh

(AIUB)

GROUP REPORT ON
“Strategy Analysis of HP”
A Group Report Presented to the Faculty of Business
Administration in Partial Fulfillment of the Requirements for the
Degree of
Bachelor of Business Administration

Submitted To:
Nusrat Huq
Lecturer, Faculty of Business Administration

Course:
Strategic Management

Section:
C

Submitted By:

Name of the Student ID

 Monir Farhana 10-15550-1

 Rahman Turin 09-14665-3
 Nur Faisal Mohammed 09-14928-3

Date of Submission: 24/07/2013

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 Group Report On

Strategy Analysis of HP

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Date: 24/07/ 2013
Nusrat Huq
Lecturer, Faculty of Business Administration
Department of Human Resource Management
American International University- Bangladesh

Subject: Submission of Report on “Strategy Analysis of HP”.

Dear Madam,

We are pleased to attach here with a copy of the report on “Strategy Analysis of HP”.
This report is a summary of our findings from the tasks we have been given to complete. We
completed the report on schedule and tried to meet our entire proposed objective within the
allotted schedule.

Finally, we are truly grateful to you for giving us this nice opportunity to work on this report,
which we have considered as a great chance for us to develop our strategy making and analysis
skill.

Thank you.

Yours Sincerely,

Monir Farhana ID: 10-15550-1 Sd……………………

Rahman Turin ID: 09-14665-3 Sd…………………….

Nur Faisal Mohammed ID: 09-14928-3 Sd…………………….

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 Acknowledgement

By the cordial mercy of Allah, now we are able to submit our report to our honorable course
teacher Miss. Nusrat Huq. We would like thanks Miss. Nusrat Huq to inspiring us to do our
job properly. We strongly believe that it would not be possible preparing such a report without
Almighty’s grace.

Now I would like to thank our honorable Madam Miss. Nusrat Huq for his keen efforts and
invaluable guidance.

Again, I like to thank our honorable teacher for giving us such a chance in completion of the
report.

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 Profile of Table of Contents

Name Page No.

Cover Page…………………………………………………………………………….. 1

Title Page…………………………………………………………………………….. 2

Submission Letter…………………………………………………………………….. 3

Acknowledgement……………………………………………………………………… 4

1.0 History of the Organization……………………………………………………….. 6

2.0 Profile of the Organization………………………………………………………... 8

4.0 Mission and Vision Statement…………………………………………………..... 9

5.0 External Analysis and Internal Analysis ……………………………………….… 10

6.0 Strategy of Organization………………………..………………………………………..... 13

7.0 Objectives of the Organization……………………………………………….……. 14

8.0 Recommendations for Future………………….. ………………………………. 16

9.0 Conclusion…………………………………………………………..………………… 18

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1.0 History of the Organization

BILL HEWLETT AND DAVE PACKARD

The HEWLETT PACKARD COMPANY or HP is an American multinational information
technology corporation headquartered in Palo Alto, California, United States. It provides
products, technologies, software, solutions and services to consumers, small- and medium-
sized businesses (SMBs) and large enterprises, including customers in the government, health
and education sectors.

The company was founded in a one-car garage in Palo Alto by William "Bill" Redington
Hewlett and Dave Packard. HP is the world's leading PC manufacturer and has been since
2007, fending off a challenge by Chinese manufacturer Lenovo, according to Gartner. It
specializes in developing and manufacturing computing, data storage, and networking
hardware, designing software and delivering services. Major product lines include personal
computing devices, enterprise and industry standard servers, related storage devices,
networking products, software and a diverse range of printers and other imaging products. HP
markets its products to households, small- to medium-sized businesses and enterprises directly
as well as via online distribution, consumer-electronics and office-supply retailers, software
partners and major technology vendors. HP also has strong services and consulting business
around its products and partner products. In 2012 it was the world's largest PC vendor by unit
sales.
Following are some of the highlights in the history of HP:

1938: Stanford University graduates Bill Hewlett and Dave Packard collaborate on the
company's first product, an audio oscillator, in a Palo Alto garage.

1938: One of HP's first customers, Walt Disney, orders eight oscillators to test recording
equipment and speaker systems in 12 specially-equipped theaters that will be used to show
Disney's film, "Fantasia," to be released in 1940.

1939: Hewlett and Packard formalize their partnership on Jan. 1, 1939, deciding the company's
name with a coin toss.

1940: HP moves from the garage behind Hewlett and Packard's house to rented buildings in
Palo Alto. The start of World War II brings increased U.S. government orders for electronic
instruments. Revenues at year-end total $34,396.

1942: Construction begins on the first HP-owned building in Palo Alto. Revenues hit $522,803.

1947: HP is incorporated. Packard is named president and Hewlett is vice president.

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1948: Revenues total $2.2 million and employees number 128.

1957: HP goes public on Nov. 6 for $16 per share.

1962: For the first time, HP makes Fortune Magazine's top 500 U.S. companies, ranking 460.

1964: Packard is elected CEO and chairman of the board. Hewlett is named president.

1966: HP develops its first computer, the HP 2116A, making its entry into that business.

1972: HP introduces the HP-35, the first scientific handheld calculator.

1977: Hewlett retires as president but remains CEO. Packard remains chairman. HP engineer
John Young is named president.

1978: Hewlett retires as CEO and the company names Young to succeed him. Young serves
until 1992.

1980: HP introduces its first personal computer, the HP-85 and a steady stream of PCs follow.

1984: The HP LaserJet Pinter line debuts and becomes the company's most successful single
product ever.

1992: John Young retires, Lew Platt, an engineer, is elected president and CEO and a member
of the board.

1993: Packard retires as chairman, succeeded by Platt. HP ships its 10 millionth HP LaserJet
printer.

1996: Packard dies on March 26.

1999: HP spins off Agilent Technologies, consisting of HP's former measurement and medical
business. Agilent's IPO takes place on Nov, 18, 1999, with HP retaining an 84-percent stake.

1999: Platt retires; HP names Carly Fiorina as president and CEO. Fiorina has nearly 20 years
of experience at AT&T and Lucent Technologies.

2000: Fiorina is named chairman.

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2001: Bill Hewlett dies on Jan 12. On Sept 4, HP and Compaq announce a controversial merger
agreement to create an $87 billion company, facing fierce opposition from Walter Hewlett, son of
HP founder William Hewlett and an HP director.

2002: HP completes the merger with Compaq on May 3 following a vitriolic eight-month proxy
fight that spilled over into the courts. After absorbing Compaq, HP begins laying off thousands of
workers to cut costs.

2005: HP board of directors, unhappy with the uneven performance of the company and the
failure of the merger to deliver the results Fiorina promised, considers management
reorganization. Fiorina steps down on Feb. 9. HP names chief financial officer Robert Wayman
as interim CEO.

2.0 Profile of Organization

Organization Name Hewlett-Packard

Establishment Year January 1, 1939

Head Quarter Palo Alto, California, United States

Organizational Structure Public Limited Company.

Number of Subsidiaries 103 subsidiaries

Market Share: 15.9%

Number of Total Employees: 331,800 (2012)

Profit in 2012 $ -12.650 billion (2012)

Core Management: Ralph Whitworth (Interim Chairman)

Meg Whitman(President and CEO)

3.0 Mission and Vision Statement

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 Hewlett-Packard Mission Statement:

"To provide products, services and solutions of the highest quality and deliver more
value to our customers that earns their respect and loyalty."

Hewlett-Packard Vision Statement:

"To view change in the market as an opportunity to grow; to use our profits and our
ability to develop and produce innovative products, services and solutions that satisfy
emerging customer needs."

4.0 External Analysis and Internal Analysis

SWOT

HP SWOT analysis

Strengths Weaknesses

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 1. Strong presence in China 1. Poor competency in
acquisitions
2. Brand reputation
2. 29% of income comes from
3. Diversified product portfolio personal systems division

3. Poor presence in tablet market

Opportunities Threats

1. Expand services and 1. Retaliation by incumbent firms

enterprise solutions divisions in software services

2. Increasing demand of cloud 2. Slowing growth rate of the PC

based services market

3. Acquisition of more technology 3. Rapid technological change

related patents

Strengths
1. Strong presence in China

The economy of China has been growing at a steady more than 8% rate every year. The
growing economy accelerates corporate spending and HP is well positioned to benefit from
it. The company has increased its investments in the market and expanded product and
service offerings, especially its enterprise business and services divisions. These divisions
offer the most profitable HP’s products, including cloud computing services and enterprise
solutions. Strategic expansion into Chinese market may result in a strong competitive
advantage for the business in the near future.

2. Brand reputation

HP is the world’s leading PC vendor with more than 15% market share. It is also one of the
major providers of service network products. The company has a significant market reach all
over the world in nearly all of the markets it operates. This has resulted in a strong brand
reputation. According to Inter brand, HP’s brand was value at $26 billion in 2012 and was
among top 15 most valuable brands in the world.

3. Diversified product portfolio

Although slowly, HP has been diversifying its product portfolio and moving from its main
Personal Systems business to more profitable and lucrative enterprise solutions and services

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business. The company now offers thousands of different products and services. In addition, its
product portfolio is more diversified than competitors’ portfolios, which make HP less susceptible
to changes in the different industries and markets.

Weaknesses
1. Poor competency in acquisitions

Over the last 10 years, HP has acquired at least 50 technology companies. Some of the
acquisitions added new skills, products and increased business’ revenues but the rest
acquisitions were either of no value or even detrimental to the company. Most notable that
Autonomy Corporation which was acquired for $11 billion and was a complete failure. HP
bought a highly overvalued company and had to write down $8.8 billion value of its books.
This acquisition has revealed how incompetent HP was when acquiring the company. No
other HP competitor has experienced such an acquisition failure in the decade.

2. 29% of income comes from personal systems division

HP still heavily depends on sales from PC, especially laptops. The market for PC has
matured and is expected to grow very slowly or even decline after a few years. Combining
this with ever decreasing margins on computer hardware products, HP’s largest Personal
Systems division becomes a weakness for the company.

3. Poor presence in the tablet market

The tablet market has been growing and is expected to grow in double digits over the next
few years. Most of other technology businesses have successfully introduced their products
in the tablet market and have enjoyed huge income and profit growth. Although HP had its
Touchpad tablet model and later introduced its Slate series tablets into the market, the
company has failed to offer an attractive product for consumers. As a result, the business
experiences losses and is unable to compete successfully in this lucrative market with
companies like Samsung and Apple.

Opportunities
1. Expand services and enterprise solutions divisions.

HP provides various services (cloud, security and infrastructure) and enterprise solutions
(servers, networking and storage), which are the most profitable HP’s businesses at the
moment. The company should focus on growing these divisions as they promise better
growth opportunities and higher profit margins.

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2. Increasing demand of cloud based services.

The cloud computing market is expected to grow by an average of 22% each year from 2011
to 2020. By 2020, the market is expected to reach $240 billion value. Currently, HP is offering
many services related with cloud computing and is well positioned to benefit from the
growing market.

3. Acquisition of more technology related patents

R&D is expensive to engage in and the best alternative to that is to acquire patents from
other companies in the market. HP has a lot of free cash that could be used to acquire
companies holding the necessary technology patents. With strengthened patent portfolio, HP
would be able to compete with the rival firms in the table market.

Threats
1. Retaliation by incumbent firms in software services

Profit margins are high in the market of enterprise software solutions and HP might face
stronger than expected competition from incumbent firms such as Oracle or IBM.

2. Slowing growth rate of the laptop market

Growth rate of the computer market is slowing down and in the near future the markets will
become saturated. The company faces intense competition from rivals like Acers, Apple, Dell,
Lenovo or Samsung in terms of price, quality, brand, technology, distribution channels and
range of products. Besides, customer needs are changing and now customers are keener to
buy tablets or smartphones than new laptops. Therefore, it will prove hard for HP to compete in
personal computers market and continue to grow its market share.

3. Rapid technological change

The serious threat that HP and the other tech companies are facing is a rapid technological
change. Companies are under the pressure to release the new products faster and faster.
The one that cannot keep up with the competition soon fails. This is especially threatening for
HP as the company is already behind its rivals in terms of quality, price and technological
advancement of some of the products.

5.0 Strategies of the Organization

1. The Current Strategy

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According to Barney Beal's 2004 article, HP's new approach was developed to deal with the
86 marketing departments in use at the time of the merger. When the merger occurred, it
created a series of internal problems. HP had to deal with multiple platforms, legacy systems
and a lack of continuity among its marketing departments. Each department had separate
budgets and resources, leaving the company with no idea of the marketing focus or the total
amount spent on marketing. The new strategy allowed the company to focus on a results-
based, data-driven model. The aim of this strategy was to give the new company a single
language that enabled parts of the marketing campaign to be integrated. In order to create
this singular approach, HP began using Seibel CRM and Marketing Resource Management
tools. The tools provided HP's top executives and department managers with the ability to
speak the same language using numbers to measure marketing success, the accuracy of
forecasted expenses and program effectiveness. With the chief financial officer and
department heads effectively communicating, the company could focus on speaking to the
customer.

2. Focus on Customer

HP has customers in every arena of the business world. To get the most out of its
customers, the company began using the consumer as a guide to its small business and
corporate initiatives. Their customers have shown a marked enthusiasm for this approach,
which in turn has given HP more qualified leads and business partners. This strategy allows
the company to be led by the customer.

3. Create Measurable Goals

HP's reliance on a Customer Relationship Management program is no accident. By creating

goals that can be measured, HP has managed to cut spending by 10 percent. These goals
allow the company to funnel the marketing dollars to the strategies that show tangible
results, creating a more efficient and effective marketing strategy.

4. Create Major Initiatives

HP has created two major initiatives within the company that have motivated the staff and
increased the efficiency of the company. The campaigns are called Achieve More with Less
and Operation One Voice. Achieve More with Less challenged the company to consolidate
systems and reduce redundancy. Operation One Voice was used to take all of the marketing
initiatives to the customer, raising the profile of the brand's image. HP used this initiative to
reach out, employing the methods that customers used to contact the company. By using
customer-driven communication lines, HP was able to convey its message directly to the
customer. The use of the customer-driven approach has led to a successful launch of the
company's marketing strategy.

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6.0 Objectives of the Organization
“It is necessary that people work together in unison toward common objectives and avoid
working at cross purposes at all levels if the ultimate in efficiency and achievement is to be
obtained.”

– Dave Packard
HP's Corporate Objectives have guided the company in the conduct of its business since 1957,
when first written by co-founders Bill Hewlett and Dave Packard.

1. Customer Loyalty
To provide products, services and solutions of the highest quality and deliver more value to our
customers that earns their respect and loyalty.
Underlying beliefs supporting this objective:
 Our continued success is dependent on increasing the loyalty of our customers.
 Listening attentively to customers to truly understand their needs, then delivering
solutions that translate into customer success is essential to earn customer loyalty.

 Competitive total cost of ownership, quality, inventiveness, and the way we do business
drives customer

2. Profit
To achieve sufficient profit to finance our company growth, create value for our shareholders
and provide the resources we need to achieve our other corporate objectives.
Underlying beliefs supporting this objective:
 Profit is the responsibility of all.
 Balance of long-term and short-term objectives is key to profitability.

 Profit allows us to reinvest in new and emerging business opportunities.

 Profit is highly correlated to generating cash, which brings more flexibility to the business
at a lower cost.

3. Market Leadership

Underlying beliefs supporting this objective:

 There are more places we can contribute than we will be capable of contributing: We
must focus.
 To be average in the marketplace is not good enough, we play to win.

4. Growth

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To view change in the market as an opportunity to grow; to use our profits and our ability to
develop and produce innovative products, services and solutions that satisfy emerging customer
needs.

Underlying beliefs supporting this objective:

 Growth comes from taking smart risks, based on the state of the industry—that requires
both a conviction in studying the trends, but also in inducing change in our industry.

5. Employee Commitment

To help HP employees share in the company's success that they make possible; to provide
people with employment opportunities based on performance; to create with them a safe,
exciting and inclusive work environment that values their diversity and recognizes individual
contributions; and to help them gain a sense of satisfaction and accomplishment from their
work.

Underlying beliefs supporting this objective:

 HP's performance starts with motivated employees; their loyalty is key.
 We trust our employees to do the right thing and to make a difference.

 Everyone has something to contribute: It's not about title, level or tenure.

 An exciting, stimulating work environment is critical to invention.

 A diverse workforce gives us a competitive advantage.

 Employees are responsible for lifelong learning.

6. Global citizenship

Good citizenship is good business. We live up to our responsibility to society by being an

economic, intellectual and social asset to each country and community in which we do business.

Underlying beliefs supporting this objective:

 The highest standards of honesty and integrity are critical to developing customer and
stakeholder loyalty.
 The betterment of our society is not a job to be left to a few; it is the responsibility to be
shared by all.

 This objective is essential to delivering on the brand promise.

7.0 Recommendation for Future

 Determines customer needs and wants through market research

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 Market research is the vehicle for gathering the information that serves as the foundation for
the marketing plan.

 It involves systematically collecting, analyzing and interpreting data about company’s

market, customers and competitors.
 The objective of marketing research is to learn how to improve the level of satisfaction
for existing customers and to find ways to attract new customers

 Analyzes a firm's competitive advantages and builds a marketing strategy around

them

 Strive to be unique

To create an image of uniqueness. That means when the company produce the product it
should be very unique type and defend so the customer really interested to buy the product.

 Connect with customers on an emotional level-

 Customer receives an emotional boost every time they buy the product.
 Focus on the customer
 Listen to customers, Define “superior service. Set standards and measure performance.
 Examine your company’s service cycle.
 Hire the right employees.
 Train employees to deliver superior service.
 Empower employees to offer superior service.
 Use technology to provide improved service.
 Reward superior service.
 Get top managers’ support.
 View customer service as an investment, not an expense
 Emphasis on speed-when the firm has a creative idea just quickly launched it because
the other competitor also has created better idea in their mind.

 HP should aware about acquisition strategy.

 Company income more from Laptop rather than PC. So company put more afford
improve sales of PC.

 To compete with Apple & Samsung company should make tablet PC with unique ideas.

8.0 Conclusion

Hewlett-Packard Company and its subsidiaries provide products, technologies, software,

solutions, and services to individual consumers, small-and medium-sized businesses (SMBs),
and large enterprises, including customers in the government, health, and education sectors
worldwide. Its Personal Systems segment offers commercial notebooks and desktops;
consumer notebooks, desktops, and mini notebooks; and workstations, calculators and other
related accessories, and software and services for the commercial and consumer markets. The
companies Services segment provides consulting, outsourcing, and technology services to

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infrastructure, applications, and business process domains. Its Printing segment offers
consumer and commercial printer hardware, supplies, media, and scanning devices, such as
inkjet and Web solutions, laser jet and enterprise solutions, managed enterprise solutions, and
graphics solutions. The company’s Enterprise Servers, Storage, and Networking segment
provides industry standard servers; business critical systems; storage platforms; and networking
products comprising switches, routers, and wireless LANs. Its Software segment offers
enterprise information management solutions for structured and unstructured data, IT
management software, and security intelligence/risk management solutions as software
licenses, software-as-a-service, and hybrid or appliance deployment models. The company’s
HP Financial Services segment provides leasing, financing, utility programs, and asset recovery
services; and financial asset management services to enterprise customers, as well as
specialized financial services to SMBs, and educational and governmental entities. Its
Corporate Investments segment provides business intelligence solutions that enable businesses
to standardize on data management schemes, connect and share data across the enterprise,
and apply analytics. The company was founded in 1939 and is headquartered in Palo Alto,
California.

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