Tuesday, June 26, 2012

Essay on Hewlett-Packard

Essay on Hewlett-Packard

At present, Hewlett-Packard is the world’s biggest IT-company with operations in 170 countries and 304,000 employees. With a long history of 70 years, the company is one of the leading global developers of hardware and software. HP competes in consumer and business segments in three main customer categories: computers and computing devices, printing machines and supplies, and equipment for IT-needs in business (Hewlett-Packard Development Company, L.P., 2010).

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In order to analyze the current position of the company in the market, let us turn to the SWOT analysis and examine the environment. The strengths of the company are characterized with its stable position in the market and trust of many corporate and individual users. At first, Hewlett-Packard is the biggest player in the IT-market operating with $114.6 billion of revenue, $13.4 billion profit and $60 billion supply chain by the end of 2009. This made it fifth best performer on the Dow Jones Industrial Average and ninth in US rating of Fortune (Hewlett-Packard Development Company, L.P., 2010; Connie, 2009). It impresses with its sizes and scale of operations, which extends to all six continents. Global presence of HP is a significant competitive advantage because it doesn’t depend on any specific segment. The company’s product catalogue numbers approximately 160 pages being one of the biggest in the whole industry (“Hewlett-Packard Company”, 2008). At second, according to the corporate brochure HP in Brief (2010), the company in recent years is better positioned than ever. It allows for better targeting the customer groups, which supposes the increase in profit. At third, the company is a well-earned award winner. It was recognized by Newsweek as the “Greenest Big Company in America” and its contemporary data center is considered to be world’s most innovative.

Environmental protection nowadays is the concern of many people and organizations in the world, that’s why recognition in ecological protection is another unquestionable advantage. At fourth, the manufacturer outlines its improved security for the data and increased productivity of the devices it produces. Finally, HP’s strategy is aimed at sensitive issues and emphasizes on people’s relationships. The company suggests that it develops easier communication between people with the help of technologies provided.

Let us now observe the weaknesses. At first, HP keeps a lot of inventory (Connie, 2009) and is not able to sell it for that it is no more up-to-date. According to Forbes (“How Dell Took Advantage”, 2004), back in 2004, Dell, one of the strongest rivals of HP in the segment of consumer notebooks, benefited from this gap in HP’s corporate policy and was about to increase fiscal revenue throughout 2005-2006 significantly. At second, although Hewlett-Packard did not experience financial losses in 2009, it improved its revenue only by one per cent to $28.8 billion and non-GAAP earnings only by eigh per cent. One of the biggest acquisitions, the purchase of EDS, didn’t bring expected results for that its profit reported in 2009 was less than the year before (Bylund, 2009).

Being one of the most innovative enterprises in the world, Hewlett-Packard enjoys lots of opportunities. At first, a big number of projects in cooperation with huge governmental and non-governmental organizations in different countries of the world are currently started. They will keep HP involved and ensure permanent earnings for at least a decade. At second, the company invests in research and development. Such issues are of global scale and involve governments with their financial and other types of support. One of the latest global projects of HP is the Central Nervous System for the Earth – a network of sensors to monitor natural disasters and catastrophes (HP in Brief, 2010). At third, the IT-giant is known for pioneering new markets and it is supposed to continue expansion. Finally, new technologies produced by the company are of high demand. One can mention the newly created interactive displays with ambient light, which is considered to be a new world standard.

When mentioning threats, I would definitely name the high speed of changes in the market: some product lines become old-fashioned and have to be closed. 2009 was a difficult year for the printing segment of the company (Connie, 2009). Being one of the most profitable business segments, it reported a constant declining of sales for more than a year period. Now the unit of printing machines is exposed to merging with the PC unit for that they lose in sales in the recent years. Besides, Apple gains popularity exponentially in several segments, which it shares with HP, and with the introduction of new product lines, more and more customers switch from Windows platform to the one operated by Macintosh. According to the review of Olenick (2009), some new lines of HP notebooks, for example, cede those of Apple in functionality but are in the same pricing range. According to Connie (2009), HP does not plan to cut prices which can lead to even bigger losses in market shares of different segments in future.
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