Strategy Formulation
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Strategy Formulation
Global competitiveness is very important as it enables the company to sustain its operations in the current business environment. From a global point of view, the operations of Hewlett-Packard (HP) Company are effective as they have enabled it to assume an elevated niche in the current market. Market surveys show that the client base is satisfied with the quality of the products that the company provides on the market. By making innovation a mainstream factor and pursuing diversification at the same time, the company has experienced a rise in revenue and earnings (Burruss & Kuettner 2002). Company analyses show that there is as strong demand of its products on a global scale. The current trend can be attributed to its comprehensive portfolio that enables it to match the right, services, solutions and products to their clients’ unique and specific needs. Generally, the performance of the company is impressive and implies an unprecedented growth in the near future. This assumption is based on its current stable status, sustainable approaches and environmental sensitivity.
SWOT ANALYSIS
Strengths Weaknesses
Sales compensation
Technology
Brand.
Knowledge
Printer Business Distribution
Marketing
Culture
As a well known computer distributer, HP Company has had more strengths than weaknesses. This is due to their reliability in quality and durable products. HP is also responsible for the sale of the inkjet printers. They have a wide inflow of clients and there are very many outlets globally that distribute their products. Some of the factors that have contributed to the doing well of the company include sales compensation, technology, brand and knowledge.
After the sale of a HP product, one is offered a warranty where incase there is a default the client is to be compensated or is entitled to free repair of the product. This makes them to be at a higher competitive advantage as it is a way of attracting more customers. The innovation of technology is also a contributing factor. Most people have diverted to the digital technology which requires use of computers. HP has been able to meet the needs of the customers by manufacturing advanced computers which are durable (Cargille & Fry 2006).
Distribution and marketing of the HP products have been some of the weaknesses facing HP Company. These problems may have been brought about by lack of unique skills to market their products. HP Company has been experiencing major threats from other competitors which have affected its trend of business. This is due to the competition that the company experiences from IBM and DELL. These two companies have been working very hard to outdo HP and IBM has been doing very well especially in the software industry.
Competitive Advantage
HP has been better positioned than in the past. It has been highly ranked in its ability to maintain a high cost-cut. While IBM is leading in its consulting services and its ability to assist top brass install corporate strategy, HP is focused on assisting companies on how to handle the soaring costs of maintaining and powering their tech gear(Zhang 2010). Their goal is to use software devices and other automation technologies to reduce the number of tech workers. They want to set their devices in a way they will require very little human involvement. Hp has also set prices that are affordable to the customers. This puts HP at a higher competitive advantage as it has set strategies that are different from those its competitors have set.
Company’s Value Chain
Value chains include the activities that work together effectively and efficiently for the organization to gain a high competitive advantage. Marketing and sales is one o the activities whereby HP has ideally done well. IBM and DELL are the main competitors where DELL deals with PC and server hardware while IBM focuses on IT service provider (Zhang 2010). HP has taken up both tasks but still maintains a large cash business especially with the printer business. HP also has a firm infrastructure where it has taken up the cost reduction measures. It has six business divisions which are Personal system, Imaging and Printing, HP services, Software and HP Financial services and Enterprise Storage and Servers. HP also uses advanced technology to improve its relationship with the supply base.
Strategic Alternatives
It is clear that the higher percentage in HP’s cash inflow comes from the printing business. The business generates half of the income for HP which means that the company should relocate its investment to Imaging and Printing. HP should also incorporate the Focus and Execute strategy where they mainly concentrate on the activities that will generate more income as compared to the previous periods. HP should also focus on profitability and not scale.
References:
Burruss, J. & Kuettner, D. (2002). Forecasting for Short Lived Products: Hewlett Packard’s Journey. The Journal of Business Forecasting, 21, 9-14.
Cargille, B. & Fry, C. (2006). Design for Supply Chain: Spreading the Word Across HP. Supply Chain Management Review, 34-41.
Olavson, T. & Fry, C. (2007). Value Driven Variety Management. Sloan Management Review, 48 (1), 63-69.
Zhang, H. (2010). Research Hewlett Packard through its Value Chain. International Journal of Business and Management, 5 (8), 179-189.
