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Transcript of Hewlett-Packard
just outside Palo Alto, California. Became a corporation in 1947 Publicly traded company in 1957 Stanford graduates $538 Strategy Type: Analyzer Efficiency & Innovation Vertical Integration Generic Strategy Best-Cost Provider Broad Market and Low-Cost VALUE CHAIN Financials 7 Revenue Reporting Segments Corporate investments includes business intelligence solutions, HP Labs, webOS software and certain business incubation projects. Personal System Group (PSG) Commercial/ Consumer PC’s, Workstations Imaging and Printing Group (IPG) Inkjet/Web Solutions, LaserJet Enterprise Solutions, Managed Enterprise Solutions, Graphics Solutions, Printer Supplies. Services Infrastructure Technology Outsourcing, Tech Services, Application Services, Business Process Outsourcing Enterprise Service, Storage and Networking (ESSN) Industry Standard Servers, Business Critical Systems, Storage, Networking HP Software IT Management Solutions, Information Management Solutions, Security Intelligence/Risk Management Solutions supports and enhances HP's global product and service solutions, providing a broad range of value-added financial life cycle management services.
HP Financial Services (HPFS) Liquidity Financial Leverage Profitability Stock Valuation Hewlett-Packard Corporation Current Look November 29, 2012
Previous Close: $12.73
Five Year Look 08-12
High: $53.90 – Week of April 19th 2010
Low: $12.44 – Week of November 19th 2012 Summary Increased Research and Development Expenditures Could lead to new technology developed by HP like a smartphone to compete more with Apple who has run away with the market. Summary Losing grasp of market share and stock suffers
Ratio indicators prove HP to be badly performing
Poor Business Decisions Financial Issues Moody’s downgrade
$8.8 Billion dollar write off
Stock Performance in research and development in net earnings SWOT Analysis Strengths Weaknesses Opportunities Threats Leader in PC market share worldwide since 2007, 15.9% in Q3 2012 (IDC) Strong, recognizable brand name; 15th most valuable brand worldwide at over $26 billion (Interbrand) Synergy between seven business units; PSG, Services, IPG, HP Software, ESSN, HPFS, Corporate Investments Strengths Lack of innovation as the PC leader compared to industry innovator Apple Weaknesses SWOT/TOWS ANALYSIS Rapid adoption of cloud computing in business markets; 62% of SMB utilize cloud services (Spiceworks) Recent additions to mobile device and tablet market have increased competition within the segment, good timing for HP to innovate in mobile market IT budgets on the rise for 2013 (Spiceworks) Opportunities Supply chain dependency; Intel for processors and Microsoft for operating system software Mac market share continues to rise against the PC overall, 13.6% of US shipments in Q3 2012 (Gartner) Rapid advancement of mobile device market is cutting into PC usage e.g. iPad vs. laptop Social media and photo album networks reducing need for photo printers Threats Poor acquisitions of late, e.g. Autonomy, Palm Several failed attempts into the mobile device market – HP PDAs, HP TouchPad (palmOS) Limited cloud services division Issues Recent Autonomy fraud revelation is a MAJOR setback for HP amidst uncertainty in the PC market Reliance on Microsoft for operating system innovation enables Apple to continue gaining traction, especially with Windows 8 Failed TouchPad and smartphone experiments have made consumers wary of HP’s ability to compete in mobile market Alternatives and Tradeoffs If HP decides not to enter the mobile device market, they could re-focus their efforts on PSG (personal systems group) Company may have to reduce R&D expenditures to “steady the ship” after recent turmoil Recommendations Focus on becoming the #1 supplier of SMB technologies as IT budgets continue to increase year after year Commit to expanding the HP Cloud to compete with Amazon and Rackspace Strive to innovate on “the next big thing” in personal computing Mobile photo storage and printing Core Competencies HP Software benefits from top-level talent after acquisition of EDS Leadership changes positioning HP for strong comeback in near future Deep experience in multi-vendor environments Distinctive Competencies IPG (printers) is vastly above the competition, well known as a world leader in printing technology PSG (desktops and laptops) enjoys a competitive advantage in PC market Offers quality PCs at a relatively low price SO Strategies Increase presence in SMB markets (workstations, servers, networking) Leverage valuable brand to re-enter mobile device market with strong mobile offering (new TouchPad) ST Strategies Distinguish from PC competitors in consumer segment Cloud photo storage to integrate with home photo printers WO Strategies Continue innovating in business products and solutions as IT budgets increase Acquisition freeze to protect valuable brand Expand cloud services offerings to compete with Amazon and Rackspace WT Strategies Focus on lightweight and ultra portable laptops to fight off onslaught of tablets At HP, we believe diversity is a key driver of our success. Putting all our differences to work across the world is a continuous journey fueled by personal leadership from everyone in our company. Our aspiration is that the behaviors and actions that support diversity and inclusion will come from the conviction of every HP employee - making diversity and inclusion a conscious part of how we run our business throughout the world. Hierarchy of Strategy Operating Strategy online sales, sales through various mediums Functional Strategy diversity and inclusion Business Strategy converged infrastructure, application transformation, enterprise security, information optimization, hybrid delivery Corporate Strategy PSG, Services, IPG, HP Software, ESSN, HPFS, Corporate Investments Together, Hewlett-Packard is aiming to provide customers worldwide with products that will allow them to complete any task or solve any problem that they are asked to. (1, 3) Our innovative computer technology and business solutions will allow users to stay on the cutting edge while being able to trust our sturdy and reliable brand name and products. (2, 4) We earn sufficient profits to support financial stability as well as growth. (5, 7) We treat our customers and employees in a similar fashion: with respect, loyalty and open-mindedness. (6, 9) Our aim is to not only help our customers but to be a social and economic asset to the communities in which they live. (8) HP is and will continue to be synonymous with quality and dependability. (6, 7)
1) customers 2) products/services 3) market 4) technology 5) concern for survival, growth & profitability 6) philosophy 7) self-concept 8) concern for public image 9) concern for employees References HP - United States. Hewlett-Packard
Developement Company, n.d. Web. 24 Nov. 2012. <http://www8.hp.com/us/en/home.html>. 2011 Annual Report. Rept. Hewlett-Packard Development Company, 2012. PDF file. Balanced Scorecard Internal Business Process Financial Customer Learning and Growth Founded in 1935 Bill Hewlett and David Packard electrical engineering
Stanford University Palo Alto, California $538 Became a corporation in 1947 Then a publicly traded company in 1957 Hewlett-Packard's CEO
Meg Whitman Austin Ingraham
Patrick Crowe Threat of Substitute products Competitive nature of industry Threat of new competitor entry Bargaining power of buyers Bargaining power of suppliers Other factors / Stakeholders Porter's Industrial Forces Presenting - Innovation
- Economically, intellectually,
and socially responsible
- Value employees - Reliable brand
products - Affordable products
- Produce growth - Adaptable to enter new
markets and remain in
- Innovation Bill Hewlett David Packard “A balanced scorecard is a widely used method for combining the use of both strategic and financial objectives, tracking their achievement, and giving management a more complete and balance view of how well an organization is performing” (Gamble, Thompson, Peteraf 24). "Yahoo Finance." Yahoo. N.p.. Web. 4 Dec 2012. <http://finance.yahoo.com/echarts?s=HPQ Interactive"Hewlett Packard Co." Morning Star. N.p.. Web. 4 Dec 2012. <http://quicktake.morningstar.com/stocknet/secdocuments.aspx?symbol=hpq>."Apple Inc." Morning Star. N.p.. Web. 4 Dec 2012. <http://quicktake.morningstar.com/stocknet/secdocuments.aspx?symbol=aapl>.
"Lenovo Group LTD." Morning Star. N.p.. Web. 4 Dec 2012. <http://quicktake.morningstar.com/stocknet/secdocuments.aspx?symbol=lnvgy>.
"Dell Inc." Morning Star. N.p.. Web. 4 Dec 2012. <http://quicktake.morningstar.com/stocknet/secdocuments.aspx?symbol=dell>. Net Profit Margin 7% 5%