HEWLETT-PACKARD

Strategic analysis of Hewlett-Packard (HP)

Introduction

HP is the largest consumer IT company, the world's largest small and mid-sized business IT Company and a leading enterprise IT Company (Barney, 1991). It provides infrastructure and business offerings that span from handheld devices to some of the world's most powerful supercomputer installations. It also offer consumers a wide range of products and services that make digital photography, digital entertainment and home printing and computing simple without compromising performance and productivity. (Arensman & Russ, 2002)

This paper will focus on HP working in the mobile industry and analyze the internal as well as the external environment of HP after the Palm takeover.

Question 1-External Analysis

PESTEL analysis

A PESTLE analysis of the industry was undertaken to examine the local, national and global influences of political, economic, social and technological factors to understand opportunities and threats well.

POLITICAL - Moreover, both home and private businesses are granted the authority for decentralized decision-making. The free system in the American business sector is made evident by the amount of the production and output of private businesses.

ECONOMIC - Since the events of September 11th the world economies have suffered heavily, stocks plummeted and prices are at all time lows and it has obviously affected the American economy as well.

SOCIAL - changes in consumer taste and lifestyle represent both opportunities and threats for the industry. Opportunities in terms of new market and consumers are available.

TECHNICAL - A paperless operation, the management and administration of the company are undertaken on IT systems, which are accessed through secure servers; provide flexibility in the running of the business.

LEGAL - There has been no legal restrictions on conducting businesses in America.

ENVIRONMENTAL - The renewable source of resources used in production, are environmentally friendly. The threats are in terms of legal consequences for stocks. (Camp, 1989)

Porters Five Forces Analysis

Competitive rivalry:

There are several competitors that include LG, Motorola, Samsung and Sony Ericsson etc.

Threat of new entrants:

High fixed costs mean that the volume is important for the company. Capital requirements are high due to activities such as R & D and advertising require capital commitments.

Power of buyers:

Power of buyers is high because there are many products for customers to choose from the market of mobile telephones. The speed of technological innovation is fast, the competitors have more power to compete with HP. In addition, the price of HP is high, so that customers are price sensitive. (Barney, 2001)

The power of suppliers:

If suppliers change prices, it has a direct impact on the prices of HPs products as well. If there are multiple suppliers, they can easily switch from one to another.

Threat of substitutes:

Threat of Substitutes available in the market is also present. New technologies have also emerged in recent years. (Chandler, 1962)

Opportunities of the company

After a comparative analysis of Apple and its nearest competitors, HPs industry key success factors are innovation, brand awareness and recognition, financial stability, price and advertising effectiveness, we found that Apple is upscale for HP, when it comes to brand recognition and awareness and advertising effectiveness (Arensman & Russ, ...