STRATEGIC ANALYSIS OF CASE STUDY (HP) HEWLETT PACKARD CORPORATION

Contents
1. Introduction & history Vision & mission SWOT 2. Formulation (stage #1) I. Input Stage i. ii. iii. EFE IFE CPM II. Matching Stage i. ii. iii. iv. v. SWOT IE MATRIX SPACE MATRIX BCG MATRIX GRAND MATRIX

III. Decision Stage i. QSPM

3. Implementation (stage # 2) 4. Evaluation stage (stage # 3)

Introduction Strategic management is all about Formulation Implementation & evaluation of strategies So our project will revolve on these critical parameters. Strategic Management Strategy Formulation Input /action stage Matching stage Decision stage

Strategy Implementation Strategy evaluation History Bill Hewlett & Dave Packard graduated in electrical engineering from STANFORD University in 1935. The company originated in garage in nearby Palo Alto,California,USA during a fellowship in 1939 with initial capital investment of us $538 Hewlett Packard company commonly referred as HP American multinational information technology corporation headquartered in Palo Alto , California , USA Nearly in each country hp product lines include : 01) Personal computing devices 02) Enterprise servers 03) Related storage devices 04) Diverse range of printers & imaging products

Hp markets its products to household, small to medium size consumers and enterprise directly as well as via online distribution In 2002 hp completes its merger with Compaq Computer Corporation .By the end of 2006 hp revenues was over $91.6 billion with 156000 Employees. Vision & Mission of HP Vision statement

To view change in market as an opportunity to grow, to use our profit and our ability to develop & produce innovative products, services and solutions that satisfy emerging customers need Mission Statement

To provide product, services and solution of highest quality and deliver more value to our customers that earn their respect and loyalty SWOT ANALYSIS Strengths Brand name Low debt

Wide range of innovative products Developing of own hardware and software Web technology used for product awareness & sale Weaknesses Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy Opportunities 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 Threats Competitors technology & pricing low compatibility with non- HP product

Availability of substitute Less global coverage than competitor Input Stage IFE (INTERNAL FACTOR EVALUATION MATRIX)

Key Internal factors Strengths Brand name Low debt Wide range of innovative products Developing of own hardware and software Web technology used for product awareness & sale Weaknesses Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy Total Interpretation

Weight 0.14 0.13 0.12 0.10 0.10

Rating 4 4 4 4 3

Weighted Score 0.56 0.52 0.48 0.40 0.30

0.10 0.08 0.11 0.10

1 2 2 2

0.10 0.16 0.22 0.20

1.00

2.94*

EFE (EXTERNAL FACTOR EVALUATION MATRIX) Key External factors Opportunity 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 Threat Competitors technology & pricing low compatibility with non- HP product Availability of substitute Less global coverage than competitor Total Interpretation 1.00 3.02* 0.12 0.13 0.10 0.11 4 3 4 2 0.48 0.39 0.40 0.22 0.11 0.18 0.09 0.12 3 3 2 4 0.33 0.54 0.18 0.48 Weight Rating Weighted Score

CPM (COMPETITIVE PROFILE MATRIX)

Critical success factor

weight Rating 0.11 0.08 0.12 0.10 0.09 0.10 0.11 0.11 0.09 0.10 0.08 1.00 2 3 4 4 3 3 2 4 4 2 2

HP Score 0.22 0.24 0.48 0.40 0.27 0.30 0.22 0.44 0.18 0.20 0.16 3.11 Rating 4 3 2 3 4 3 4 2 3 3 2

DELL Score 0.44 0.24 0.24 0.30 0.36 0.30 0.44 0.22 0.27 0.30 0.16 3.28 Rating 3 3 3 2 2 3 3 2 2 4 4

CANON Score 0.33 0.16 0.36 0.20 0.18 0.30 0.33 0.22 0.18 0.40 0.32 2.98

Innovation Management Technology Financial Position Market share Customer loyalty Brand name Pricing Product Quality Compatibility Promotion Total

Matching Stage SWOT MATRIX

SWOT MATRIX

Strengths - S 1. Brand name 2. Low debt 3. Wide range of innovative products 4. Developing of own hardware and software 5. Web technology used for product awareness & sale

Weakness W 1. Lack of in-house management consulting division 2. Intellect ual capital is underestimated 3. No aggressive investment in R & D 4. No good people retention policy WO strategies (W1,W5,O2) (develop new HR policy in order to retain human capital by taking advantage or other firm management )

Opportunities O 1. Expansio n of retailed stores for customer convenience 2. Participa tion in joint venture 3. Make easy to use product for upcoming retirees 4. Compute r and cell phone software & hardware Threats - T 1. Competit ors technology & pricing 2. low compatibility with non- HP product 3. Availabili ty of substitute 4. Less global coverage than competitor

SO - strategies (S1, S3,O1,) (must open new retail stores throughout the world to take advantage of financial strength) (S4, O3) (develop easy pc and cell phone for old generation)

WT strategies ST strategies (W1,T1) (S4, T1) (give attention to management (developed low price and consulting division to innovative pc & cell phone than have more focus on competitors ) technology (S5,T2) improvements) (developed such hardware and software for computer & cell phone which are compatible with other companies software and accessories)

Interpretation Managerial Decision: Market development and Horizontal Integration.

SPACE (STRATEGIC POSITION & ACTION EVALUATION MATRIX) Internal Strategic Position Financial Strengths (FS) Return on Investment leverage Working Capital Liquidity Price earning ratio Total Average +5 +3 +4 +5 +4 +21 +4.2 External Strategic position Environmental Stability (ES) Technological changes Rate of Inflation Price range of Competing products Competitive pressure Barriers to entry into market Demand variability Total Average Industry Strength (IS) -2 -3 -2 -2 -4 -13 -2.6 Growth Potential Profit Potential Financial Stability Labor cost Technological know-how Total Average +5 +5 +4 +3 +4 +21 +4.2 -3 -2 -3 -5 -4 -2 -19 -3.17

Competitive Advantage (CA) Market Share Product Quality Customer Loyalty Technological know-how Control over suppliers and distributors Total Average

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

BCG (BOSTON CONSULTANTING GROUP MATRIX) Table for BCG Matrix HP division

ID A B C D E F

SEGMENTS ESS HPS SOFTWARE IPG PSG HPHS

REVENUE % 19 17 1.4 29.2 32 2.2 2

PROFIT % 11 8 14 8

GROWTH RATE %

MARKET SHRE % 0.8 0.1 0.6 0.8 0.7 0.2

20 5 30 42 2

-10 -14

IE (INTERNAL-EXTERNAL MATRIX)

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

Key Internal Factors Strengths Brand name Low debt Wide range of innovative products Developing of own hardware and software Web technology used for product awareness and sale Weaknesses Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R &D No good people retention policy Total weight DECISION STAGE 0.10 0.08 0.11 0.10 1.00 Weight 0.14 0.13 0.13 0.11 0.10

HORIZONTAL INTEGRATION AS 3 3 4 4 2 TAS 0.42 0.39 0.52 0.44 0.20

MARKET DEVELOPEMNT AS 4 2 3 3 3 TAS 0.56 0.26 0.39 0.33 0.30

2 -3 3

0.20 -0.33 0.30

3 -2 2

0.30 -0.22 0.20

QSPM (QUANTITATIVE STRATEGIC PLANNING MATRIX)

Key External Factors

HORIZONTAL INTEGRATION (Strategy - 1) weight 0.11 0.20 0.09 0.12 AS 3 4 3 3 TAS 0.33 0.80 0.27 0.36

MARKET DEVELOMENT (Strategy - 2) AS 4 2 2 2 TAS 0.44 0.40 0.18 0.24

Opportunities Expansion of retailed store for customer convenience Participation in joint venture Make easy to use product for upcoming retirees Computer and cell phone software and hardware Threats Competitors technology and pricing Low compatibility with non-HP product Availability of substitutes Less global coverage than competitors Total weight Total Attractive Score

0.14 0.13 0.10 0.11 1.00

4 3 4 3

0.56 0.39 0.40 0.33

3 2 3 2

0.42 0.26 0.30 0.22

6.24

5.02

INTERPRETATION According to the total attractive score of QSPM HP should go for

HORIZONTAL INTEGRATION

Note: Jis matrix ke interpretation nae he wo please lekh dena. Shahbaz