How can a company that generates $111 billion in annual sales be considered a laggard in its
Question:
How can a company that generates $111 billion in annual sales be considered a laggard in its industry? Well, if that company is Hewlett-Packard (HP for short), the answer is when that company loses roughly half its market value since 2010, when that $111 billion sales figure represents a 7.4 percent decline from the previous year, and when many of that company’s main products are considered old and unappealing by a vast majority of customers. Needless to say, HP has many strategic challenges ahead as it strives to regain customers, market share, and profits. Actually, HP has proud history of being one of the top technology firms in the world. The company literally was founded in a California garage in 1939 on $538 of investment capital by Bill Hewlett and Dave Packard. Over the years, HP has introduced some of the most innovative products in several different industries. The company’s very first product was purchased by Walt Disney studios to produce the film Fantasia. Other product innovations by HP include a cesium-beam standard clock in 1964 that helped maintained international time standards, the first desktop calculator in 1972, the first desktop mainframe computer in 1982, and the amazingly successful line of HP laser jet printers. Despite this prior product innovation history, the company found itself in deep trouble in the late 2000s. A situation analysis at that time would have revealed an economy that was not very conducive to new investments in technology. The recession that began in 2008 was one of the steepest in U.S. history, with fallout effects for years with sluggish economic growth and relatively high unemployment. The sociocultural environment was one in which consumers began heavy use of smartphones and tablets as the primary access to social media and other electronic resources. Furthermore, today’s consumers were becoming more interested in maintaining and sustaining the natural environment. Finally, the technology and competitive situation had changed as companies like Google, Apple, IBM, and Microsoft shifted to software and cloud computing. For a company like HP that earns much of its revenue from hardware like computers and printers, those trends collectively were not a welcome development. Their competitive responses over the past several years seem confusing, for example, their flip-flops on whether to be in or out of the PC solution. Clearly, HP has much work ahead of itself to right the ship. In an effort to change its fortunes, a few years ago the company hired former eBay CEO Meg Whitman. Determining how the company will reach it growth targets in the future is of paramount importance for Ms. Whitman and her leadership team. Regardless of the strategy they ultimately implement, how HP is able to adjust its strengths and weaknesses to take advantage of opportunities and minimize threats in the external environment will heavily impact the trajectory of their success in returning the venerable firm to its former position as a technology leader with innovative products and services that are preferred by customers.
1 (a)As HP continues to make changes to its overall strategy, what other aspects of the situation analysis beyond those element mentioned above should Meg Whitman and other leaders pay special attention to?
(b) What strengths does HP have that they can use to take advantage of various opportunities or minimize threats in the external environment?
(c) what product-market strategies can be recommended to the company and adopt to improve its performance and return on investment?
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