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LAHORE SCHOOL OF ECONOMICS
Introduction
In 1938, two Stanford graduates in electrical engineering, William Hewlett and David Packard, started their own business in a garage behind Packards Palo Alto home. One year later, Hewlett and Packard formalized their business into a partnership called Hewlett-Packard. HP was incorporated in 1947 and began offering stock for public trading 10 years later. Annual net revenue for the company grew from$5.5 million in 1951 to$3 billion in 1980. By 1997, annual net revenue exceeded$42 billion and HP had become the worlds second largest computer supplier. The company, which originally produced audio oscillators, introduced its first computer in 1966.In 1972, the company pioneered the era of personal computing by introducing the first scientific, hand-held calculator. Hewlett-Packard introduced its first personal computer in 1980. Five years later, HP introduced the LaserJet printer, which would become the companys most successful product ever. Products and services Hp is a leading company, offering products, technologies, software, solutions and services to consumers, small and medium sized businesses and large organizations Hewlett-Packard Company (HP)is a leading company offering a wide range of 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. Its operations are organized into seven segments: Services, Enterprise, Storage and Servers (ESS), HP Software, the Personal Systems Group (PSG), the Imaging and Printing Group (IPG), HP Financial Services (HPFS), and Corporate Investments. Services, ESS and HP Software are reported collectively as a broader HP Enterprise Business. Hewlett-Packard's business is vast in scope and size. The company manufactures more than24, 000 electronic products and systems for measurement, computing, and calculation. The worldwide operation with research facilities; manufacturing plants; and sales, service, and support offices spread across the U.S. and more than 120 countries.
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LAHORE SCHOOL OF ECONOMICS
Sr. # 1. 2. 3. 4. 5. 6. 7. 8. 9.
Components Customers Products/ Services Market Technology Survival, Growth, Profits Philosophy Self Concept Public Image Employees
Why?
They are brief and to the point. It is highlighting all the main points
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LAHORE SCHOOL OF ECONOMICS
Weaknesses
1. 2. 3. 4. 5. Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy Financial condition leans very heavily on the state of our economy not just in the US but worldwide 6. Lack of in-house management consulting division 7. R&D department has significantly less investments compared to historical spending 8. Pay cuts has brought low morale to employees 9. Struggling to Add Value and Remain Profitable in Low-Cost High-Volume PC Business. 10. Slow speed to market or responsiveness
Opportunities
1. 2. 3. 4. 5. Expansion of retailed stores for customer convenience Participation in joint venture Make easy to use product for upcoming retirees Computer and cell phone software & hardware Globally acceptable software used in the laptops which makes them easy to use and repair. 6. The company is spread through the world and has a very effective management that constantly keeps a check on their products functioning. 7. The prices are very affordable.
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LAHORE SCHOOL OF ECONOMICS
Threats
1. 2. 3. 4. 5. Competitors technology & pricing Low compatibility with non- HP product Availability of substitute Less global coverage than competitor. Biggest threat to the HP is Apple Inc's MAC. The popularity of the Mac can seriously harm the market for the HP laptops. 6. The HP is not paying attention to the designing of their Laptops or customization like DELL and VIVO does. 7. The innovative behavior of Apple Inc can be a serious factor in the falling of sales of HP. 8. HP has marketed itself as a brand for the ordinary people who are very well appreciated but their ads need to have celebrities to endorse their products. 9. HP association with the spying scandal. 10. HP's biggest threats on a system level - looking at companies with a broad breadth of storage, servers, and professional services - would be IBM. I would also point to EMC as their strongest overall threat in the storage market, especially since the beginning of 2003.
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LAHORE SCHOOL OF ECONOMICS
INTERPRETATION: The main strengths of electronic products and systems retail market in which HP operates is the strong brand names and recognition of management also corporate culture and post sales services are of relative importance, too. The weighted score of 2.72 (which is greater than 2.5) shows a strong internal position but there are still issues to be sorted out. As in case of HP due to high product diversification and venturing into new product markets costs have been high and though net sales have increased since 2006.
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LAHORE SCHOOL OF ECONOMICS
INTERPRETATION
A weighted score of 2.62 (above average and midpoint 2.5) shows that the HP has been able to manipulate the opportunities and have been able to counter threats and is doing rather well but its business isnt still great. HP can still manipulate the opportunities and counter the threats that it has failed to do i.e. HP has not been able to work well with the foreign exchange market and it has not been able to expand its business activities in Asia
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LAHORE SCHOOL OF ECONOMICS
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LAHORE SCHOOL OF ECONOMICS
INTERPRETATION: According to the space matrix score HP falls in the AGGRESSIVE quadrant . Their strategies should be one of the following: Vertical and horizontal integration Market penetration Market development Product development Diversification
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LAHORE SCHOOL OF ECONOMICS
INTERPRETATION: HP falls in first region of IE matrix and there main focus will be on GROW AND BUILD and they will mainly focus on strategies which are: Market development Horizontal integration
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LAHORE SCHOOL OF ECONOMICS
INTERPRETATION: According to the total attractive score of QSPM HP should go for HORIZONTAL INTEGRATION
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LAHORE SCHOOL OF ECONOMICS
Current ratio
Current ratio has decreased from 1.38 to 1.35. This means that working capital to meet short term obligations has decreased, which shows a poor use of working capital. This is a sign of bad ratio.
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LAHORE SCHOOL OF ECONOMICS
Return on assets
This ratio has increased from 6.9% to 13.0% .This is the sign of good ratio.
Working capital
Working capital has increased from $11,874 to $12,414. This shows that the ability of a company to endure difficult financial periods has increased.
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LAHORE SCHOOL OF ECONOMICS
According to the total attractive score of QSPM HP should go for HORIZONTAL INTEGRATION
According to the space matrix score HP falls in the AGGRESSIVE quadrant. Their strategies should be one of the following: Vertical and horizontal integration Market penetration Market development Product development Diversification
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LAHORE SCHOOL OF ECONOMICS