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 Way4 2. true Situation4 Current Performance4 strategical Posture4 kick Statement of Hewlett Packard4 trance bidding of Hewlett Packard5 change Mission statement5 Improved Vision statement5 Why? 5 Comparison of Mission statement to a leash competitor statement5 Objectives5 Strategies6 The Current outline6 Focus on Your Customer6 ready Measurable Goals6 Create Major Initiatives6 3. Strategic Managers7 Board of Directors7 Top Management7 4. out-of-door Environment(EFAS Table)7MEGA Scanning(PEST compendium)7 Task Environment (Porter Five forces Model)7 5. Internal Environment (IFAS Table)8 embodied Structure8 Corporate culture8 Corporate resources8 grocery storeing8 Finance8 R&D8 Ope proportionalityns9 Human Resources9 Information System9 Market Position9 6. Strategic shortsightedness (Filt dimensionn)10 7. outline of Strategic Factors10 Situational compendium (SWOT)10 TOWS hyaloplasm13 SPA CE Matrix15 INTERPRETATION16 Interpreting the SPACE analysis Matrix plot17 ixixGrand Starategy matr18 QSPM18 8. Strategic Alternatives and Recommended Strategy20 Recommended Strategy20 9.Implementation20 Expanding Geographic for each one(prenominal)y21 Reaching into new grocery store segments21 10. Evaluation and control22 auxiliary A23 Gross get ahead margin proportion23 Operating advance margin23 sack up profit margin23 Current ratio23 Quick ratio23 arsenal turnover ratio23 Sales to receivables ratio24 Return on assets24 Debt to worth ratio24 1. INTRODUCTION Hewlett-Packard The Company In 1938, two Stanford graduates in galvanic engineering, William Hewlett and David Packard, started their own p bentage in a garage behind Packards Palo Alto home. iodin year later, Hewlett and Packard formalized their usiness into a areanership called Hewlett-Packard. HP was incorporated in 1947 and began offering stock for public trading 10 age later. Annual dough revenue for the c ompany grew from $5. 5 trillion 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 dividing lineally produced audio oscillators, introduced its initial 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 nearly successful carrefour ever. The HP Way In 1956, Bill Hewlett, Dave Packard, and a handful of other(a) HP executives gathered at the Mission Inn in Sonoma, California, to take a leak a set of prises and principles to guide their company. The six preys that this small separate subsequently executed not only helped shape a new spacious of company, entirely ultimately became the foundation for what came to be known as the HP wa y. 2. Current Situation Current Performance See Appendix 1 Strategic Posture Mission Statement of Hewlett Packard We are committed to phylogenesis a wide range of advance(a) crossings and mul perioddia go that dispute the way consumers access and enjoy digital entertainment. By ensuring synergism between businesses within the organization, we are also constantly striving to create exciting new worlds of entertainment that can be experienced on a variety of different increases. Vision statement of Hewlett Packard We recognize and snaffle opportunities for growth that builds upon our strengths and competencies. Improved Mission statement To provide reaping, services and antecedent of upliftedest quality and deliver more respect to our guests that earn their respect and loyalty. Improved Vision statement To view change in mart as an opportunity to grow, to utilise our profit and to world power to civilize and produce innovative products, services and solutions that s atisfy customers need. Why? They are brief and to the point. It is heightslighting all the main points.Comparison of Mission statement to a leading competitor statement IBM IBM, we strive to lead in the invention, development and manufacture of the industry most advanced information technologies, including computer systems, packet, storage systems and microelectronics. We translate these advanced technologies into determine for our customers through our professional 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 bankable software mappingd in the laptops which makes them easy to use andCompetitors engine room & pricing. repair Political-Legal. Less global coverage than competitor. piteous compatibility with non- HP product. The prices are very(prenominal) affordable. Booming of mobile engineering such as IPAD and IPHONE. electromotive force of using technology is very spunky. Due to tough contention negociate power of customer is low. One of the top market attracter with trusted Brand name. The HP is continuously keeps on update their technology which keeps the gratify of the customers intact. High product differentiation (servers, Laptops, scanners Printers and others. Expansion of retailed stores for customer convenience. affair in joint venture Mass toil leads to high negotiate supplier power. find External factors Weight Rating Weighted take a crap Opportunities 1. Globally congenial 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 updating 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. community 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 global 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 ambition bargaining power of customer is low. 0. 05 3 0. 5 follow Weighted come to 3. 11 Current strategy can catch opportunity and quash threats Key Internal factors Weight Rating Weighted Score Strengths nonionised into 7 business sections with strong patch in each 0. 4 0. 4 The company competes both at local and international aim. It has increase its competitiveness 0. 1 4 0. 4 through policies and strategies that supports free-market economies Strong monetary bearing 0. 1 4 0. Leading provider of personal computers and imaginativeness and printing 0. 05 4 0. 2 Good Operational Efficiency 0. 05 3 0. 15 Multi-vendor customer services, including infrastructure technology and business processoutsourcing,0. 05 3 0. 5 technology support and maintenance, application development and support servicesand consulting and integration services. Highly talented workforce 0. 05 4 0. 2 aptitude to provide end-to-end IT solution H/W, application development and support. 0. 15 4 0. 6 Hewlett-Packard is a global enterprise and especially afterwards itsmergerwith Compaq, the company 0. 5 3 0. 15 became worlds biggestcomputer hardwareand peripherals consort in the world and has ranked twentieth in the Fortune 500 list. Weaknesses Financial condition leans very hard on the state of miserliness not just in t he US but worldwide 0. 5 2 0. 1 assay to channel Value and Remain Profitable in Low-Cost High-Volume PC avocation 0. 01 1 0. 01 R&D department has significantly less investments compared to historical spending 0. 1 1 0. 1 Slow run to market or responsiveness The past acquisition of Peregrine do the HPsportfolioeven0. 5 2 0. 1 more respective(a) and complete but HP Open Views escape of mainframe focus capabilities created several(prenominal) jobs Lack of in-house management consulting division 0. 1 1 0. 01 Dependency on third-party suppliers, and our revenue and utter(a) margin could engender 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 hit a CMDBproductthat includes discovery and mapping. This cause many a(prenominal) customers to 0. 05 1 0. 05 switch the brand Total Weighted Score 3. 6 HP has strong internal position TOWS Matrix IFE Strengths Weakne sses Organized into 7 business sections with strong Financial 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 change magnitude its competitiveness through Struggling to Add Value and Remain Profitable in policies and strategies that supports free-market Low-Cost 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 several(a) and complete but Multi-vendor customer services, including HP Open Views lack of mainframe management infrastructure 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. king 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 customers especially after itsmergerwith Compaq, the companyto switch the brand. became worlds biggestcomputer hardwareand peripherals consort in the world and has ranked twentieth 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). h arbour the human capital. Political-Legal. S2, S3, S5, O9 (backward integration Integrative 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 triteizing with W1,W8, T1 to develop new products (Intensive Less global coverage than competitor. lowest price for broad range 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 Position External Strategic position Competitive Position (CP) Industry Position (IP) Market consider -2 Growth Potential 5 overlap Quality -1 Profit Potential 5 Customer Loyalty -2 Financial Stability 5 expert know-how -2 Labor cost 2 Control over suppliers and -4 Technological know-how 5 distributors Total -11 Total 22 total -2. 2 Average 3. 7 Financial Position (FP) Stability Position(SP) Return on Investment 5 Technological changes -4 leverage 6 Rate of Inflation -2 running(a) metropolis 5 Price range of Competing products -3 Liquidity 5 Competitive military press -4 Price earnings ratio 4 Barriers to entry into market -2 demand 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 Scores from each one factor in the Strategic Position and Action Evaluation intercellular substance can be quickly judged but there are benefits for exploring each in detail.There are a large number of factors that can be considered and each industry will have its own key features which should be included in the detailed SPACE evaluation. A few 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 Flow Gearing Working Capital Intensity SPACE Analysis Factors For Competitive Advantage Market Share Quality Customer Loyalty Cost Levels Product rove SPACE Analysis Factors For Industry Attractiveness Growth Potential deportment Cycle Stage Entry Barriers Customer Power Sub stitutes SPACE Analysis Factors For Environmental Stability Political Uncertainty Interest Rates technology Cyclical Environmental Issues Interpreting the SPACE Analysis Matrix Diagram The arrow indicating the strategic thrust can be drawn from the origin by calculating the net result on each axis of rotation and plotting this net position. The Aggressive posture in the SPACE Analysis Matrix occurs when all the dimensions are positive. The implicit strategy is to aggressively grow the business raising the stakes for all competitors. The main danger is complacency. ? According to the distance matrix score HP declines in the AGGRESSIVE quadrant . Their strategies should be one of the following Vertical and horizontal integration1 Market penetration2Market development3 Product development4 Diversification5 ixixGrand Starategy matr pic Horizontal diversification Concentric diversification Conglomerate diversification Divestiture QSPM Key Factor Weight Horizontal Mar ket Product Horizontal desegregation breeding Development Diversification Low Product Cost This druthers is focused on maturation the lowest cost or highest value product. This is true of companies with commodity type products, products reaching a mature material body in their life cycle, or where there is consolidation or a shrinking market. This predilection typically will require spare time and development cost to optimize product cost and the manufacturing process. Low Development Cost This orientation focuses on minimizing development cost or developing products within a constrained budget. While this orientation is not as common as the other orientations, it occurs when companies are developing products under thin for other parties, where a company has horrendously constrained financial resources, or where a stealth development effort is macrocosm underinterpreted on a shoestring. 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 except commodity products. Pursuit of this strategy involves higher(prenominal) risk of infections with newer technologies and accepts a trade-off of time and cost to pursue these objectives. Quality, Reliability, Robustness This orientation focuses on assuring high levels of product quality, 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 processing industries), the need for high levels of reliability (e. g. , aerospace prod ucts), or where there are significant safety issues (e. g. , medical checkup 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 whole step 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 reasonably objective and consistent manner. The focus should be on the most significant elements in a process the ones that ac count for the highest proportion of exposure or the superior no. of problems. 2. Establish cadences 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 tolerance range, which defines any acceptable parenthesiss. Standards can be set not only for final output, but also for intermediate stages of production output. 3. Measure actual performance.Measurements must be made at predetermined times. 4. Compare actual performance with the standard if the actual performance results are within the desired tolerance range, the measuring process stops here. 5. Take corrective action If the actual results fall outside the desired tolerance range, action must be taken to correct the deviation. The action must not only correct the deviation but also prevent its recurrence. The following issues must be headstrong Is the deviation only a chance fluctua tion? Are the processes being carried out in correctly? Are 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 exceedingly difficult, if not impossible, to reverse. Strategy evaluation is bouncy to an organizations well-being timely evaluations can alert management to problems or potential problems before a situation becomes critical. Appendix A Gross profit margin ratio The gross profit has increased from 23. 61% to 24. 53%. This promoter that profitability at the basic level has increased from previous year. This is a sign of in effect(p) 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 pay has increased from the previous year. This also is a sign of good r atio. 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 rock-bottom 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 speedy 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 inventory 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 receivables 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 r atio has decreased to 6. 52% from 9. 12%. This means that debt financing has decreased and hence 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