Hewlett-Packard (HP)

Business Strategy Report

Student number: 109382

Tutor: Kevin Masters

Date of submission: 11/12/2014

Course: Business Strategy Report (N1079)

Executive Summary
Introduction

The report deals with the strategic analysis of Hewlett-Packard (HP) to

underline the growth of the company over the years as well as the strategic

issues it is facing at present. HP is now at a critical moment that HP decided to

split itself into two new companies. For the split-off strategy, HP implemented

many strategies in different aspects for preparation. The paper has deeply

evaluated the strategy HP is using, specially the spilt-off strategy, based on the

performance and result of the strategies. The paper has also developed

feasible plans for the business based on internal and external environment

analysis to remain and increase competiveness in the market in the future.

Content

The report is divided into three parts, which are Strategic Analysis, Strategic

Development and Strategic Implementation. In strategic analysis, full internal

and external analysis has been done to look for market opportunities which

could be appropriated and profitable for HP. In strategic development, HP

existing strategy has been evaluated and summarized. New

strategy/Improvements have been developed and ranked to replace the poor

strategy. In strategic implementation, a complete strategy schedule has been

made for HP which included the risks and controls of the strategies.

HP should focus on restructure, brand and differentiation strategy. Rather than

take the risks of split-off, restructure itself with improving brand name and

product differentiation can help HP to maintain long-term competitive

advantage and market share.

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1.0 Strategic Analysis

1.1 HP Company Background

HP (Hewlett-Packard) Company is an international information technology

enterprise with its headquarters in Pal Alto, California. It specializes in the

manufacture of software, hardware, as well as a broad range of services to

individual clients, large enterprises, SMEs (small and medium sizes

enterprises), government, health, and education sector. (Gibson and Raymond

2005). The major product lines that company offers include industry and

enterprise standard servers, computing devices, software, networking

products, printers, and imaging products (Glassman, et al. 2005). The

company also provides consulting services and is the largest vendor of PCs in

the world in terms of unit sales.

1.2 Diversified Computer System Industry Profile

The computer industry entails software, hardware, services, as well as a broad

range of products. PCs, Tablets, and Desktops are the commonly being used

appliances to facilitate in this environment. The major companies that

dominate the industry include Dell, HP, Apple, Gateway, and Sony. Moreover,

various forces are driving competitiveness in this industry. These include new

technology, custom build PCs, reliability, and customer service. Technology is

advancing at a rapid pace forcing technology companies to introduce

strategies that will help them remain sustainable in the marketplace

(Chowdhury 2003). However, the global personal computer sales have been

falling from 90 million in 2009 to 76 million in 2013. The introduction of low-cost

tablets had hurt PC sales, the inexpensive tablets have become the priority
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choice of computing device for many people, especially in emerging

economies. (BBC, 2014)

1.3 HP’s Vision and Mission

1.3.1 HP VISION STATEMENT

“To view change in 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 customers need. ”

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1.3.2 HP MISSION STATEMENT

“To provide product, services and solutions of highest quality and delver more

value to our customers that earn their respect and loyalty.”

1.3.3 Vision and Mission Analysis

HP worked hard in the field of innovation in the past 80 years aiming to

develop innovative product/service to satisfy customer wants which own

variety of patents. In addition, HP provides the highest value of product and

good after-sell service (including CSR) to improve customer loyalty. In this

case, HP’s business is going on progress with correspondence to their Vision

and Mission statement.

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 1.4 External and Internal Environment

1.4.1 PESTEL Analysis

The following is the PESTEL Analysis for HP, a full PESTEL analysis is

available at Appendix 1.

• Government controls and rules HP's effort on en ironment and CSR

Political • Changing level of taxation or import duties (Operate in 170 countriess)
• Enjoly political suppot in developing countries

• Global sales of computing device may tough $750 billion in 2014

Economic • Operation performance affected by disposable income, inflation and
inflation rates of the place.

• Smartphones and tablets will soon overcome PC market

• Brand is the first consider factor in people purchasing technology product
Social • Customer loyalty is more powerful than in the past
• Less need of outsourcing due to increasing number of Technical institution

• Technology industry is fast moving with the pace increasing

Technology • Cloud-computing in the future
• Large patent pool, aided by Palm and WebOS acqusition

• More pressure to adopt corporate social responsibility

Environment • Different Enviornment Law to follow in different countries
• Higher cost structure to prevent environmental damaging

• Laws against formation of Monopolies decided whether companies can

Legal perform a merger and acquisition
• Constant targt of patent law suits lead to reduced economic benefit.

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 1.4.2 SWOT Analysis

Strength Weakness

1. Strong Market Position 1. Involved in several litigations

2. 3,50,000 employee over the
worldwide
3. Good after sales service
4. R&D advantage
5. Good distribution network across the
world
6. Diversified Business
2. Slow market share growth
3. 29% of income comes from personal
systems division
4. Poor presence in tablet market
5. Disable to provide customize solutions
to the customers
6. Poor competency in acquisitions
7. Lagging in digital entertainment market

Opportunity Threats

1. Expand services and enterprise 1. Projected decreases in the IT markets

solutions divisions 2. Slowing growth rate of the PC market
2. Expanding presence in cloud 3. People are becoming more cost
computing market conscious
3. Expanding portfolio of imaging and 4. Hyper-competitive environment
printing solutions 5. Rapid technological change
4. Acquisition of more technology related 6. Weak Market Segment Integration
patents

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 1.4.3 VRIN analysis

Resource or Valuable Rare Costly Non- Competitive Performanc

Capability to substitutable Consequence e
Imitate s Implications
Brand Image Yes No Yes No/Yes Competitive Average to
Parity – Above
Temporary Returns
Advantage
Distribution Yes No Yes No Competitive Average
(logistics) Parity Returns

Production Yes Yes Yes No Temporary Above

(Skills/Capacit Competitive Average
y) Advantage Returns
Innovation Yes Yes Yes No Same Above
Reputation Competitive Average
Advantage Returns
Knowledge Yes Yes Yes Yes Substantial Above
and Abilities Sustainable Average
Competitive Returns
Advantage
Marketing Yes No Yes No Competitive Average
Parity Returns

1.4.4 Competitive environment

Porters Five Forces

The following is an illustration of the Porter’s five forces governing the

operations of HP in the marketplace.

Threat of Entry

There are low threats in the technology industry because of the diverse

obstacles facing new market entrants. The companies in this industry have

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well established brand names, posing challenges for firms that try to penetrate

the marketplace. Any firm wishing to emerge successful in the market should

overcome successful brands such as IBM, Dell, HP, and Sony. Moreover, the

firm would be required to invest significant amount of capital, which is hard for

most start firms to acquire (Hill and Jones 2012).

Threat of Substitutes

In the technology industry, a number of threats are evident particularly

in the laptop, desktop, and tablet market. The major substitute products for HP

include those made by Dell, IBM, Sony, and Apple. Moreover, a number of

smartphone makers such as Samsung, and Apple also pose significant threat

in the tablet market. In this case, HP has to remain innovative in its operations

for it to sustain its competitiveness in the marketplace (House and Price 2009).

Power of Buyers

The buyers have a significant impact in the technology industry. In the

case of computers, tablets and desktops in the case of HP, buyers have

significant power because of the prevailing switching costs. It is possible for

consumers to switch from one product supplier to the other based on the

prevailing competitors in the marketplace. Therefore, HP faces the threat of

buyer’s power because consumers can easily switch to other competing

brands offered by other companies in the industry (Grieves 2010).

Power of Suppliers

In the computer industry, the power of suppliers is high. This is because

few suppliers of technology products dominate the market. Most companies in

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the computer industry rely on specific suppliers for their products. For instance,

Intel is the main supplier of processors for tablets, notebooks, and desktops. It

provides to a broad range of companies, including Dell, IBM, HP, and Sony

among other firms. These companies encounter a broad range of challenges

when trying to design these technical products. As such, HP and its rivals

develop heavy reliance on these companies to supply them with these kinds of

products, increasing the power of suppliers in the market (Glassman, et al.

2005).

Competitive Rivalry

Competitive rivalry is existent in the case of companies that provide

similar products. In the case of HP and its rivals, most of the products they

offer are similar. The major firms that compete against HP include Nokia,

Google, Sony, Apple, Dell, and IBM. All these companies have well established

brands in the marketplace. As such, the competitive environment is stiff posing,

making it challenging for HP to boost its sales as it would. In this case, it is

forced to keep reinventing its products and services in order to compete

effectively with the other established brands in the technology industry (Gibson

and Raymond 2005).

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1.5 Basis of Competition

The computer industry is highly competitive nowadays and it is derived by

aggressive pricing practices, customer increasing price sensitivity, frequent

introduction of new product, fast technology movement, short product life cycle

and large number of competitors. (Apple Inc., 2007

Brands are competing in different aspect to attract customer;

 Brand name
 Price
 Functions
 New Technology
 After Sales Service
 Customer Relationship Management

(Tech-Tamer.com, 2013)

1.6 Key Success Factors

There are several key success factors in computing industry. The three main

KSFs are the reliability of technology, after sale service and new innovative

features. The other KSFs are low cost, best quality, good product features,

resource available and competitive capabilities.

In addition, Customer Relationship Management is very important as well in

computing industry. Many People choose PC depends on the brand name, a

preference brand PC can give customer an extra value. Therefore,

creating/improving customer loyalty can help brands to increase sales and

market shares.
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2.0 Strategic Development

2.1 Existing strategies

2.1.1 Business Stream Level

HP is a leading global provider of product, technology, software, solution and

service to individual consumer, small and medium business (SMBs), and large

enterprise, including customers in government, health and education sectors.

HP main product/service spans the following:

 Personal computing and other access devices

(Including personal computers and tablets)

 Imaging and Printing-related product and service

 Enterprise and Services divisions

2.1.1.1 Personal computing and other access devices

HP tries hard to reduce cost for the personal computing and printing business

as they want to reallocate the resource to some profitable business. In the

Porter's generic strategies matrix, HP wants its Personal computing business

to be he cost leadership. HP 2013 annual report mentioned that “We face

aggressive price competition for our product and, as a result, we may have to

continue lowering our prices on many products to stay competitive.” HP plans

to reduce resource invest in personal computing business to proportionately

decrease their cost structure, like consolidating supply chain functions and

changing from six sales teams to three, while reducing functional support

organizations from 12 to seven. (Packard, 2012)

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For the product and pricing strategy, HP has been focused on developing more

customer-oriented PC to maintain the market share/sales in a declining PC

market (cause by the growth of table market). Using a low price strategy to

compete with those growing brands like SamSung, Apple and Lenovo.

2.1.1.2 Imaging and Printing-related product and service

HP wants its printing business to be diversification with less resource. With

focused on developing new business model like Ink Advantage, the Ink Office

initiative, and a program targeting price sensitive customer in emerging market,

which has expanded to 82 countries. Besides, rather than diversified the

personal/business printer, HP was developing and improving the printing

service in the public service aspects including the photo printing service in

Boots (UK enterprise), and combining multifunction printers with Autonomy

management solutions. (Packard, 2012)

2.1.1.3 Enterprise and Services divisions

HP plans to differentiate its Enterprise and Services Business, Whiteman,

Hewlett-Packard CEO, mentioned that “The growth range from cloud

computing, security, and big data to the company's Moonshot server system,

which has the opportunity to revolutionize servers.” (CNBC, 2013) HP

relocated large amount of the resources on the Enterprise and Services

Business as for innovating and developing it. HP decided to split Silicon Valley

icon HP into two different companies with one focus on the Enterprise and

Services Business (Detailed see part 2.1.2). “Aiming to grow over the long

term both revenue and market share in the key areas of networking, storage
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and cloud, while increasing revenue from HP’s industry-leading x86 server

business”, said Dave Donatelli, the executive vice president and general

manager of HP. Today, HP’s Software is the No. 1 and No. 2 leadership

positions in key segments within the enterprise software market with serveing

almost the entire Fortune 100, which is expected to grow to a $54 billion

market in 2015. (Packard, 2012)

2.1.2 Corporate Level

HP Split Off

HP decided to split into two firms, one selling personal computers and printer

and another selling servers and other business equipment and services. The

cloud-focused company is named Hewlett-Packard Enterprise, will be led by

current CEO Meg Whitman. The computer and printer focused business will be

named HP Inc and led by Dion Weisler, the currently executive vice president

of HP’s printing and personal systems business. HP aims to focus on servers,

software and cloud technology as it believes these markets have great

potential to growth. HP wants to drive faster sales growth with more-focused

operations. (The Economist, 2014) On the other hand, “The PC business is still

headed down and the market is still contracting” said Whiteman. HP wants to

separate the Printing and Personal System Group (PPS) and the Enterprise

and Services Business which can help HP to restructure and reallocate the

resources in a better way.

For getting ready to this split off action, HP has implemented a five-year

turnaround plan. The significant points of the plan are labors lay-off and great

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management level changing arrangement. HP launched “Voluntary Early

Retirement Programs” and “Non-voluntary Workforce Reductions” to cut labor

in the worldwide. HP targets to lay off 55000 employees in total in this

turnaround plan. (Takahashi, 2014) For the management changing, as HP has

to split into two companies in the future, the management force has to be

reallocated to both of the new firms. For example, Dion Weisler is going to lead

HP. Inc and will be separated from Hewlett-Packard Enterprise. Whitman said

the turnaround plan can help to create greater efficiency in supply chain,

logistics, and corporate enterprise business.

Whitman suggested that acquisitions will become be part of HP future, and

those acquisitions will be “very judicious, very deliberate, make sure they are

very strategic, and that we don't pay too much for these acquisitions.” HP

estimate to spend about 1.5 billion in acquisition activities in order to do it to

further the strategic position in the marketplace for HP. (CNBC, 2013)

2.1.3 Operation Level

2.1.3.1 Sales and Partnership

 Variety of distribution method

HP use many distribution method to sell its product and service, including

third-party resellers and distributors, and both direct and indirect sales to

enterprise account and customers. (Packard, 2013)

 Manage distributors

HP is using a well-designed distributor management framework to manage its

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distributors, the system can support consolidated, consistent, two-way

collaboration and transaction.

 Enter Emerging Market

HP would be many rely on distributors or wholesalers to expend into emerging

market, which can helps HP to reduce risk and gain market experience.

2.1.3.2 Marketing

HP is the biggest user of Siebel CRM and marketing resource management

(MRM) tools. There were 86 different marketing departments, each with own

budget and resources. The large amount of spending on marketing can be

imaginable, and it shows how HP treats marketing seriously in variety business

functions. (Khurana, 2010)

 Partner Engagement

PartnerOne program, a system that rewards reseller and channel partners

based on their levels of participation in the company’s chain of marketing

activities.

 Social Media Platforms

HP has integrated into several social media channel. Lara O’Reilly, a writer on

Marketing Week, mentioned that HP has a social strategy that seeks to

engage customers through the creation of relevant content.

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2.1.3.3 Research and Development

HP is an international information technology enterprise which is based on

providing innovative and high-quality product, it would invest a large amount of

capital/resource on R&D. To maintain the capability on R&D investment, HP

reduced the cost-structure in many aspects like cut another 5000 jobs and

pledged to invest the money saved from the lower headcount into research

and development. (McGrath, 2014)

 PC and Printer Business

HP believes that PC/Printer industry is contracting, thus it is reducing the

investment on those business, as for capturing the cost leadership in the

industries.

 Enterprise and Services divisions

HP concluded that the growth of server, software and cloud technology can be

profitable for HP in the future. It reallocated much resource on Enterprise and

Services Business, especially on R&D section.

2.1.3.4 Inventory and Logistic

HP’s logistic strategy is to make logistic activities simplify, standardize and

optimize. HP does not have own warehouses or warehouse management

systems or transportation management systems. To minimize the cost, keep

business relationship with those third-parties allow HP to get a very

economical price. (Jean V. 2004)

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 Choosing logistic companies which treat security seriously, is capable to

protect their product under their care and control

 Looking for companies that are financially sound to reduce risk

2.1.3.5 Value Chain

It is mention that HP is implementing a five-year turnaround plan which is aim

to prepare itself for breaking-up its business. One part of the plan is to cut cost

in every aspect as to develop a better financial statement. HP is restructuring

the value chain to minimize cost in different function. HP is also simplifying the

value chain to increase the effective and efficiency. (Zhang, 2010)

2.2 Generation of strategic option

2.2.1 Business stream level

2.2.1.1 Personal computing

HP is always an innovative technology company, implementing Cost

leadership strategy is not the best strategy for HP as reducing cost means

reduction in R&D expenses. In computing industry, brands must be continually

launching new technology to keep market share and awareness, with adding

new attributes into its product to gain customer interest.

 Product differentiation strategy

HP can differentiate its PC product with combining HP’s server and software.

Make it more efficient and user-friendly for HP PC product to link with HP’s

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server and software. Act like Apple Inc, Apple store and IOS can only be used

by Apple product.

 Product focus strategy

HP can also use the Focus Strategy (Porter’s Generic Strategies). Mainly

targeting public sectors and education customer with improving the linking

system and management system on its PC product. Developing specific

features can be helpful for HP target those customers.

2.2.1.2 Printing-related Business

 3D/ 4D printing product development strategy

HP can diversify its printing business by product development. Work hard on

developing 3D/ 4D printing technology and introduce into the market. As HP

has lots experience on printing business, it would be helpful for HP to innovate

3D/ 4D printer. There is a great market on 4D printer that HP is possible to be

the market leader.

2.2.1.3 Enterprise and Services divisions

Analyst in HP concluded that servers, software and cloud technology

businesses have a great potential market in the future. At present, HP is one of

the market leaders in these industries. It is necessary to maintain the

comparative advantage and market share.

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 Specialist-leaded R&D strategy

Hire well-known specialist to lead the project can bring a better success. With

lots of resources investing in, innovating new technology frequently can help

HP to achieve the target above.

 Acquisition Strategy

Acquisition is another ways for HP to achieve the objective, acquiring some

company with special skills/technology could have HP to walk forward.

2.2.2 Corporative level

Many economy analysts evaluated the split off of HP is a bad business strategy.

The breakup strategy would reduce the Economies of Scale of HP, which

result in increasing operation cost in both companies and the cost of

purchasing component. The brand name may also be affected and reduce the

consistency in a great level. (BBC, 2014)

 Restructure and reorganization strategy

Restructure and reorganization the company structure to make it simplify and

efficient. Cutting down the useless and valueless department/employee as to

increase HP productivity and working efficiency. This strategy can replace the

splitting strategy because it can help HP to focus on two businesses

separately.

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 Acquisition strategy

Split HP with highly degree of acquisition to maintain the brand name in both

new companies, as for keeping the Economic of scale and the market shares

in different business.

 Sell off business strategy

Selling one of the HP businesses outwards after split-off, and focusing the

remain business, with lots of capital and resource support, the remaining

business be strong enough in short period with high investment on R&D and

essential acquisition.

2.2.3 Operation level

2.2.3.1 Sale and Partnership

HP sells its computing and printing products thought third-party resellers and

distributors, which increase the cost for selling and reduce the profit earned

from each single product. HP is capable to earn more by using multiple

distribution channels.

 Branch store strategy

HP can open its own brand store in high sales region based on the worldwide

sales report. Act like Apple store, selling own brand products with less cost and

higher revenue.

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 Single reseller strategy (Emerging market)

When HP entre emerging market, HP can try to use single reseller strategy to

create feels of scarcity.

2.2.3.2 Marketing

HP presently depends on sales marketing to attract customer. It is workable for

boosting short-term sales, but it is valueless for HP to build brand awareness.

Although HP’s brand name is still strong, many brands are still promoting

themselves when they have a strong brand name, like Apple, Samsung and

Lenovo.

 Worldwide marketing campaign strategy

Hold a large and worldwide campaign for promoting HP brand. Reminding

people that HP is a successful – worldwide information technology enterprise.

Develop a long-term marketing strategy afterward to maintain the goodwill of

HP.

2.2.3.3 Research and Development

HP is applying cost-reduction strategy for the whole company, although it tried

to cut employee and transfer the capital into investment, it is shown from the

report that HP R&D spending is still decreasing. For a company based on

innovation, it is not a good long-term strategy.

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 Product/Service differentiation strategy

Using differentiation strategy for the whole company aiming develops some

new, unique technology that can maintain HP comparative advantage.

 Investment/Partner searching strategy

Find investment/Partner to support HP R&D activities, HP can also cooperate

with other brands to share the huge R&D investment, and the outcome can be

shared by two or more companies.

2.2.3.4 Inventory and Logistic

HP does not own any warehouses and logistical management, using

third-party distributors would raise the logistic cost and logistic risk for HP.

 Logistic team and warehouse development strategy

Develop own logistic team and warehouse in the worldwide to reduce the

needless logistic cost. It can also reduce risk in the logistic process.

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 2.3 Evaluation and ranking of options

2.3.1 Business stream level

Each strategic option in business stream level is evaluated and ranked with

four evaluation elements, Advantage, Disadvantage, Cost and Time.

Rank Strategy Advantage Disadvantage Cost Time

1 Computing Product Increase and Required huge R&D Medium Medium
Product differentiation maintain HP’s PC investment, result is
strategy competitive not predictable.
advantage.
2 Enterprise and Maintain the Threat of Small Medium
Services Business competitive competitors’ new
Specialist-leaded advantage and technology
R&D strategy market share in introduction
those business
3 Printing Product Being the market High risk for failure, Medium Long
3D/ 4D printing leader in 3D/ 4D uncertainty market
product development printing industry if volume
strategy successfully
innovate new
technology
4 Computing product Increase sales of HP Market has been Small Short
Product focus PC without large shared, difficult to
strategy R&D investment capture new
customer
5 Enterprise and Improve HP related Require huge Large Short
Services Business business with high amount of capital
Acquisition Strategy degree in short and a
period comprehensive
research

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 2.3.2 Corporative level

Each strategic option in corporative level is evaluated and ranked in following

table.

Rank Strategy Advantage Disadvantage Cost Time

1 Restructure and Make HP structure May take long time to Medium Long
reorganization simplify and implement, may miss
strategy efficient, helpful for the best period to
HP to focus on develop new
different separately technology
2 Acquisition strategy Maintain both new Required huge Large Short
business strong amount of capital and
after split-off a comprehensive
research
3 Sell off business Helpful for HP to Lose Economic of Gain Medium
strategy focus remaining Scale, cost-structure Money
business, lots of enlarged, brand name
capital for affected
development

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 2.3.3 Operative Level

Each strategic option in operative level is evaluated and ranked in following

table.

Rank Strategy Advantage Disadvantage Cost Time

1 R&D Improve and Required large Medium/ Medium
Product/Service maintain amount of capital Large
differentiation competitive and resource, result
strategy advantage on HP is unpredictable
product
2 Marketing Build brand Brand awareness Medium Unknown
Worldwide marketing awareness, building can be a
campaign strategy associated long-time process
technology product
to HP
3 Sales and Reduce High cost, risk can Large Medium/
Partnership commission cost, be high, require a Large
Branch store strategy increase revenue comprehensive
on each product, research
enlarge brand
name
4 R&D Capital invested in Outcome developed Small/ Large
Investment/Partner R&D can be have to be shared to Medium
searching strategy shared or invested investors/partner,
require a long time
to make agreement
of cooperation
5 Inventory and Reduce logistic High one-time Large Medium
Logistic cost and logistic investment,
Logistic team and risk in a long-term unknown result on
warehouse business model manage non-core
development strategy business
6 Sales and Create feeling of May reduce overall No cost/ Short
Partnership scarcity, build a sales in those Small
Single reseller buzz (Marketing) emerging markets
strategy
(Emerging market)

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2.4 Chosen Strategic

2.4.1 Business stream level

 Computing product differentiation strategy

It is believed that PC market is still the major market for technology industry.

Although there is a trend of switching needs from PC to tablet, keeping and

improving computing business is profitable. Overall computing market is

contracting in recent year, however, tablet market is growing if we look at it

independently. To gain market shares in computing industry, HP has to

differentiate both its PC and tablets, bring in new technology and re-attract

customer.

 Specialist-leaded Enterprise and Services Business’s R&D strategy

As mentioned that HP’s servers, software and cloud technology businesses is

one of the market leader at present in the industry. To maintain its competitive

advantage, a specialist-leaded R&D strategy can be helpful. HP has to hire

professional in different aspects to accelerate the R&D process.

2.4.2 Corporative level

 Corporate restructure and reorganization strategy

HP split-off strategy brings many disadvantages to HP, like Diseconomies of

scale and increased cost-structure. HP should reduce the risk and use other

way to achieve its goals. Corporate restructure and reorganization can help HP

to simplify the structure, which can help to increase capability for HP to focus

on two different businesses.

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2.4.3 Operative level

 Product/Service differentiation R&D strategy

(Defined above at 2.4.1)

 Worldwide marketing campaign strategy

It is essential for HP to rebuild the brand name in technology product market.

Todays, brand is the first factor for most people to buy a computing product.

Apple/ Sumsang’s product is popular because they focus on their brand

strategy. To build up market awareness toward HP computing product, a large

and impressed campaign has to be launched

 Branch store strategy

Developing branch store is also workable for building market awareness. As

HP has diversified product/service catalog, using branch store strategy would

be valuable for HP. Direct selling product to customer can also increase HP

revenue and market share.

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3.0 Implementation

3.1 Implementation issue

3.1.1 R&D on Computing product and Enterprise and Services Business

It is recommended that HP change it business strategy from cost-leadership

strategy to differentiation strategy as to maintain its comparative advantage in

long-term business. To differentiate both its computing product and cloud

technology etc, HP needs to invest huge amount of capital and resource in

R&D. For the capital source, HP can allocate from business internal or the

bank, if it is hard for HP to meet the budget objective, HP can cooperate with

other brands to develop R&D (Detail see 2.2.3.3). Employ profession to lead

the R&D can speed-up the process. The specialist can be employed through

headhunter companies with a comprehensive employment interview.

3.1.2 Corporate restructure and reorganization

For raising simplicity and efficiency of the organization structure, restructure

HP is very important. Before implementing restructure action, it is better that

conduct a detailed research to figure out the productivities of each department.

HP can find some profession research company to conduct the research for it,

the research company would analysis the performance of HP department and

concluded a list of department should be cut down.

3.1.3 Worldwide campaign

As HP does not have lots of worldwide marketing experience, HP can find

some global marketing companies to develop the campaign. The campaign

should include several aspects like TV ad., events, social media marketing and
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so on. The large campaign can be more effective for HP to rebuild its brand

name.

3.1.4 Branch store

Before developing branch store, HP need to conduct a full research based on

their sales report, choose the best places to implement the strategy. HP must

have a long-term plan for branch store development. As an example, choose

5-10 places for testing market, after achieving some objectives, choose 10

more places for implementation.

3.2 Timetable

Time (5 Years) Strategy

2015 - 2016 Corporate restructure and reorganization strategy
2015 - 2017 Worldwide marketing campaign strategy
2016 - 2020 Specialist-leaded Enterprise and Services Business’s
R&D strategy
2016 - 2020 Computing product differentiation strategy
2018 - 2020 Branch store strategy

2015 2016 2017 2018 2019

Corporate restructure and
reorganization strategy
Worldwide marketing campaign
strategy
Specialist-leaded Enterprise and
Services Business’s R&D strategy
Computing product differentiation
strategy
Branch store strategy

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 3.3 Addressing and Controlling Risk

Strategy Risks Controls

Corporate restructure and Result in failure, time wasting, Research result - oriented, develop
reorganization strategy missed best R&D timing restructure plan , step by step
implementation
Worldwide marketing Useless for build brand Avoid culture violations, develop
campaign strategy awareness, wasted resource marketing plan, evaluate market
response
Specialist-leaded Unsuitable specialist, lose Detailed interview applicants,
Enterprise and Services market leader place provide objective and guideline,
Business’s R&D strategy monitoring and evaluation
Computing product Result in failure, lose market Provide objective and guideline,
differentiation strategy shares, crisis on business monitoring and evaluation, develop
alternative business strategy
Branch store strategy Bad performance, wasted Develop full expanding plan,
resource evaluate performance by sales
report, step by step implementation

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