Hp Case Study

T A B L E O F C O N T E N T S 1. INTRODUCTION4 Hewlett-Packard The Company4 The HP guidance4 2. certain item4 present-day(prenominal) work4 strategic Posture4 bursting charge Statement of Hewlett Packard4 Vision literary argument of Hewlett Packard5 modify Mission debate5 Improved Vision depositment5 Why? 5 Comparison of Mission statement to a wind competitor statement5 Objectives5 Strategies6 The Current Strategy6 centralise on Your Customer6 Create Measurable Goals6 Create study Initiatives6 3. strategic Managers7 Board of Directors7 lead Management7 4. External Environment(EFAS Table)7MEGA S put upning(PEST analysis)7 assign Environment (Porter quintuplet forces Model)7 5. Internal Environment (IFAS Table)8 unified Structure8 Corporate culture8 Corporate resources8 Marketing8 Finance8 R&D8 Op sequencetions9 Human Resources9 discipline System9 Market home9 6. Strategic Myopia (Filt balancen)10 7. abstract of Strategic Factors10 Situational analysis (SWOT)10 TOW S intercellular substance13 shoes Matrix15 INTERPRETATION16 translation the set epitome Matrix Diagram17 ixixGrand Starategy matr18 QSPM18 8. Strategic Alternatives and Recommended Strategy20 Recommended Strategy20 9.Implementation20 Expanding Geographic in ally21 R individuallying into impudently grocery store segments21 10. Evaluation and control22 Appendix A23 Gross make al measlyance account balance23 Operating moolah gross gather margin23 salary profit margin23 Current balance23 Quick balance23 Inventory turnover balance23 Sales to receivables ratio24 picture on assets24 Debt to worth ratio24 1. INTRODUCTION Hewlett-Packard The Company In 1938, two Stanford graduates in electrical engineering, William Hewlett and David Packard, started their own line of descent in a garage behind Packards Palo Alto home. One year later, Hewlett and Packard formalized their usiness into a fatenership called Hewlett-Packard. HP was incorporated in 1947 and began crack stock f or public trading 10 old age later. Annual net tax revenue for the gild 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 calculator supplier. The company, which originally produced audio oscillators, introduced its prime(prenominal) computer in 1966. In 1972, the company pioneered the era of personal computing by introducing the first scientific, handheld 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 point of intersection ever. The HP Way In 1956, Bill Hewlett, Dave Packard, and a handful of other HP executives ga at that placed at the Mission club in Sonoma, California, to create a set of set and principles to guide their company. The six objectives that this small group later on created not completely helped shape a bran- brisk kind of company , further ultimately became the foundation for what came to be known as the HP room. 2. Current Situation Current Performance See Appendix 1 Strategic Posture Mission Statement of Hewlett Packard We be committed to developing a wide compass of sophisticated fruits and multimedia divine services that challenge the way consumers access and enjoy digital entertainment. By ensuring synergy between patronagees within the establishment, we are besides constantly striving to create exciting untriedly worlds of entertainment that can be run throughd on a variety of different yields. Vision statement of Hewlett Packard We recognize and seize opportunities for growth that builds upon our strengths and competencies. Improved Mission statement To erect crop, services and solution of amplyest feel and deliver more(prenominal) value to our guests that earn their detect and loyalty. Improved Vision statement To view salmagundi in moneymaking(prenominal)ize as an opportunity t o grow, to workout our profit and to faculty to develop and produce innovative products, services and solutions that satisfy customers need. Why? They are picture and to the point. It is highlighting all the main points.Comparison of Mission statement to a leading competitor statement IBM IBM, we get hold of to lead in the invention, increase and manufacture of the effort most advanced information technologies, including computer systems, packet package, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professed(prenominal) solutions, services and consulting businesses worldwide. DELL Dell mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. Organization Customers Opportunities Threats Globally welcome software used in the laptops which makes them easy to use and opponents engineering & pricing. mitigate Political-Legal . Less globose reportage than competitor. Low compatibility with non- HP product. The prices are genuinely affordable. well-heeled of busy engineering such as IPAD and IPHONE. Potential of using applied science is very(prenominal) high. delinquent to tough arguing talk preconditions role of customer is low. One of the top market attractor with certain Brand name. The HP is continuously keeps on update their technology which keeps the interest of the customers intact. High product eminence (servers, Laptops, scanners Printers and others. Expansion of retailed stores for customer convenience. Participation in enounce venture Mass production leads to high negotiate supplier power. tombstone External factors Weight order dull Score Opportunities 1. Globally acceptable software used in the laptops which makes them easy to use and repair 0. 02 4 0. 08 Political-Legal. 2. The prices are very affordable. 0. 1 3 0. 3 3. Potential of using technology is very high. 0. 05 4 0. 2 4. One of the top market leader with trusted Brand name. 0. 1 4 0. 4 5. The HP is continuously keeps on modify their technology which keeps the interest of the customers 0. 1 4 0. 4 intact. 6. High product differentiation (servers, Laptops, scanners Printers and others. 0. 3 0. 3 7. Expansion of retailed stores for customer convenience. 0. 1 3 0. 3 8. Participation in joint venture 0. 05 2 0. 1 9. Mass production leads to high bargaining supplier power. 0. 01 3 0. 03 Threats 1.Competitors technology & pricing. 0. 2 3 0. 6 2. Less spherical coverage than competitor. 0. 01 3 0. 03 3. Low compatibility with non- HP product. 0. 01 2 0. 02 4. Booming of mobile technology such as IPAD and IPHONE. 0. 1 2 0. 2 5. Due to tough competition bargaining power of customer is low. 0. 05 3 0. 5 Total burden Score 3. 11 Current strategy can catch opportunity and vacate threats Key Internal factors Weight Rating Weighted Score Strengt hs Organized into 7 business sections with untroubled position in each 0. 4 0. 4 The company competes both at local and world-wide level. It has change magnitude its competitiveness 0. 1 4 0. 4 through policies and strategies that obligates free-market economies Strong financial position 0. 1 4 0. track provider of personal computers and mental imagery and printing 0. 05 4 0. 2 Good practicable Efficiency 0. 05 3 0. 15 Multi-vendor customer services, including stem technology and business dishoutsourcing,0. 05 3 0. 5 technology support and maintenance, application breeding and support servicesand consulting and integrating services. Highly talented hands 0. 05 4 0. 2 Ability to provide lengthwise IT solution H/W, application development and support. 0. 15 4 0. 6 Hewlett-Packard is a global green light and especially after itsmergerwith Compaq, the company 0. 5 3 0. 15 became worlds biggestcomputer hardwareand peripherals helpmate in the world an d has graded 20th in the Fortune 500 list. Weaknesses pecuniary condition leans very firmly on the state of scrimping not just in the US just now worldwide 0. 5 2 0. 1 Struggling to tot up Value and Remain productive in low- represent High-Volume PC Business 0. 01 1 0. 01 R&D department has importantly less(prenominal) investments compared to historical spending 0. 1 1 0. 1 Slow travel to market or reactivity The past erudition of Peregrine made the HPsportfolioeven0. 5 2 0. 1 more diverse and nail but HP Open receives lack of processor management capabilities created several line of works Lack of in-house management consulting family 0. 1 1 0. 01 Dependency on third-party suppliers, and our revenue and gross margin could suffer if HP fails to 0. 01 2 0. 02 manage suppliers properly Pay cuts has brought low esprit de corps to employees 0. 02 1 0. 02 HP did not yet flash a CMDBproductthat accommodates discovery and mapping. This cause more customers to 0. 05 1 0. 05 contrive the brand Total Weighted Score 3. 6 HP has strong natural position TOWS Matrix IFE Strengths Weaknesses Organized into 7 business sections with strong monetary position leans very heavily on the position in each. state of economy not just in the US but The company competes both at local and internationalworldwide. level. It has increase its competitiveness through Struggling to Add Value and Remain net profitable in policies and strategies that supports free-market Low- price High-Volume PC Business. economies. R&D department has significantly less investments Strong financial position. compared to historical spending. Leading provider of personal computers and imaging Slow speed to market or responsiveness the past and printing. acquisition of Peregrine made the Good Operational Efficiency. HPsportfolioeven more diverse and complete but Multi-vendor customer services, including HP Open Views lack of mainfram e management root technology and business capabilities created several problems. processoutsourcing, technology support and Lack of in-house management consulting division. maintenance, application development and support Dependency on third-party suppliers, and our servicesand consulting and integration services. revenue and gross margin could suffer if HP fails Highly talented workforce. to manage suppliers properly. Ability to provide end-to-end IT solution H/W, Pay cuts has brought low morale to employees. application development and support. HP did not yet hit a CMDBproductthat includes Hewlett-Packard is a global enterprise and discovery and mapping.This cause many another(prenominal) customers especially after itsmergerwith Compaq, the companyto switch the brand. became worlds biggestcomputer hardwareand peripherals consort in the world and has ranked 20th in the Fortune 500 list. Opportunities SO WO Globally acceptable software used in the laptops S1, S2, S3, S7, O3 to develop new products W5, O8 to develop new HR policy in order to which makes them easy to use and repair (Intensive strategies). turn back the human capital. Political-Legal. S2, S3, S5, O9 (backward integration integrated W6,O9 (backward integration Integrative strategies). strategies). The prices are very affordable. Potential of using technology is very high. One of the top market leader with trusted Brand name. The HP is continuously keeps on updating their technology which keeps the interest of the customers intact. High product differentiation (servers, Laptops, scanners Printers and others. Expansion of retailed stores for customer convenience. Participation in joint venture Mass production leads to high bargaining supplier power. Threats ST WT Competitors technology & pricing. S2, S9, T1 to offer products standardizing with W1,W8, T1 to develop new products (Intensive Less global coverage than com petitor. lowest apostrophize for broad aver of customers strategies) and to drop the non-profitable Low compatibility with non- HP product. (competitive strategy). products. Booming of mobile technology such as IPAD and S2, S3, S5, T4 to develop new products (Intensive IPHONE. strategies). Due to tough competition bargaining power of S2, S3, S5, T2 to open retail stores worldwide customer is low. (Forward integration -integrative strategies). SPACE Matrix Internal Strategic bewilder External Strategic position Competitive go down (CP) Industry Position (IP) Market fate -2 harvest-tide Potential 5 increase Quality -1 Profit Potential 5 Customer Loyalty -2 Financial constancy 5 technological know-how -2 Labor cost 2 inhibit over suppliers and -4 Technological know-how 5 distributors Total -11 Total 22 modal(a) -2. 2 Average 3. 7 Financial Position (FP) Stability Position(SP) beget on Investment 5 Technological changes -4 leverage 6 Rate of Inflation -2 on the job(p) Capital 5 Price range of Competing products -3 liquidity 5 Competitive pressure -4 Price earnings ratio 4 Barriers to entry into market -2 quest variability -3 Total 25 Total -18 Average 5 Average -3 X Value = 3. 67 2. 2 = 1. 47 Y value = 5- 3 = 2 pic INTERPRETATION Assessing the SPACE Analysis rafts all(prenominal) factor in the Strategic Position and Action Evaluation matrix can be speedilyly judged but there are benefits for exploring each in detail.There are a large estimate of factors that can be considered and each industry pass on have its own key features which should be include in the expatiate SPACE evaluation. A a couple of(prenominal) factors to be considered to give you a flavour of what to include in your SPACE analysis are listed below. SPACE Analysis Factors For Financial Strength Return on Sales Return on Assets Cash unravel Gearing works Capital Intensity SPACE Analysis Factors For Competitive Advantage Mar ket Share Quality Customer Loyalty Cost Levels increase Range SPACE Analysis Factors For Industry draw Growth Potential Life Cycle period Entry Barriers Customer Power Substitutes SPACE Analysis Factors For Environmental Stability Political Uncertainty by-line Rates Technology Cyclical Environmental Issues Interpreting the SPACE Analysis Matrix Diagram The cursor indicating the strategic thrust can be raddled from the origin by calculating the net go away on each axis and plotting this net position. The war-ridden posture in the SPACE Analysis Matrix occurs when all the dimensions are positive. The implicit strategy is to acutely grow the business raising the stakes for all competitors. The main danger is complacency. ? According to the space matrix score HP falls in the in-your-face quadrant . Their strategies should be one of the following upended and horizontal integration1 Market penetration2Market development3 Product development4 diversification5 ixixGr and Starategy matr pic Horizontal diversification Concentric diversification Conglomerate diversification Divestiture QSPM Key Factor Weight Horizontal Market Product Horizontal Integration Development Development Diversification Low Product Cost This taste is cogitate on developing the lowest cost or highest value product. This is typical of companies with commodity type products, products arriver a mature phase in their life sentence cycle, or where there is consolidation or a shrinking market. This preference typically will acquire additional time and development cost to optimize product cost and the manufacturing process. Low Development Cost This orientation focal pointes on minimizing development cost or developing products within a limit budget. epoch this orientation is not as common as the other orientations, it occurs when companies are developing products under expurgate for other parties, where a company has severely constrained financial resources, or where a stealth development effort is be underinterpreted on a shoelace. This orientation is somewhat compatible with time-to-market, but involves tradeoffs with product performance, innovation, cost and reliability. Product Performance, Technology & Innovation This orientation focuses on having the highest level of product performance, the highest level of functionality or functions and features, the latest technology or the highest level of product innovation. This orientation can be pursued by companies in many industries or many products move out commodity products. Pursuit of this strategy involves higher risks with newer technologies and accepts a trade-off of time and cost to pursue these objectives. Quality, Reliability, daring This orientation focuses on assuring high levels of product tone, reliability and robustness.This orientation is typical of industries requiring high quality because of the significant costs to correct a problem (e. g. , recalls in the automotive or food touch industries), the need for high levels of reliability (e. g. , aerospace products), or where there are significant safety issues (e. g. , medical devices, pharmaceuticals, commercial aircraft, nuclear plants, etc. ). This orientation requires added time and cost for planning, testing, analysis and regulatory approvals. Service, Responsiveness & Flexibility This orientation focuses on providing a high level of service, being very responsive to customer requirements as part of development, and maintaining flexibility to respond to new customers, new markets and new opportunities. This orientation requires additional resources (and their related costs) to provide this service and responsiveness. 10. Evaluation and control 1. Determine what to measure Top managers and operational managers must specify implementation process and results to be monitored and evaluated.The processes and results must be measurable in a reas onably objective and consistent manner. The focus should be on the most significant elements in a process the ones that account for the highest proportion of scene or the greatest no. of problems. 2. Establish standards of Performance Standards used to measure performance are detailed expressions of strategic objectives. They are measures of acceptable performance results. Each standard can be usually includes a security deposit range, which defines any acceptable remainders. Standards can be set not only for final output, but too for intermediate stages of production output. 3. Measure veridical performance.Measurements must be made at regulate times. 4. Compare material performance with the standard if the actual performance results are within the sought after tolerance range, the measurement process stops here. 5. Take strict action If the actual results fall outside the desired tolerance range, action must be taken to correct the deviation. The action must not only co rrect the deviation but also foreclose its recurrence. The following issues must be resolved Is the deviation only a chance fluctuation? be the processes being carried out in correctly? be the processes appropriate for achieving the desired standards? Objectives of Strategy Evaluation and Control Organizations are most vulnerable when they are at the peak of their success Erroneous strategic decisions can inflict severe penalties and can be super difficult, if not impossible, to reverse. Strategy evaluation is vital to an organizations well-being timely evaluations can peppy management to problems or potential problems earlier a situation becomes critical. Appendix A Gross profit margin ratio The gross profit has increased from 23. 61% to 24. 53%. This fashion that profitability at the basic level has increased from preceding(prenominal) year. This is a sign of frank ratio. Operating profit margin Profitability before interest and tax has increased from 4. 00% to 7. 15 %.This means that efficiency of the business before taking any financing has increased from the previous year. This also is a sign of good ratio. Net profit margin This also has increased from 2. 7% to 6. 76%. This means that overall profitability has also increased. This is a sign of good ratio. 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. Quick ratio This ratio has also decreased from 1. 16 to 1. 13. So this shows that the ability to pay immediate financial obligations has also decreased. This quick ratio is acceptable but has decreased.Inventory turnover ratio The ratio has decreased from 9. 63 to 8. 93, which means that more capital is tied up in arsenal which is not a good sign. Sales to receivables ratio It also has decreased from 8. 75 to 8. 43. This means that the efficiency in collecting accounts receivable s has deceased. Return on assets This ratio has increased from 6. 9% to 13. 0% . This is the sign of good ratio. Debt to worth ratio This ratio has decreased to 6. 52% from 9. 12%. This means that debt financing has decreased and thereof the risk also has decreased. 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. Gross profit margin 24. 53% 23. 61% Operating profit margin 7. 15% 4. 00% Net profit margin 6. 76% 2. 7% Current ratio 1. 35 1. 38 Quick ratio 1. 13 1. 6 Inventory turnover ratio 8. 93 9. 63 Sales to receivables ratio 8. 43 8. 75 Return on assets 13. 0% 6. 9% Debt to worth ratio 6. 52% 9. 12% Working capital $12,414 $11,874 EFE