LAHORE SCHOOL OF ECONOMICS (LSE) BBA-IV (2013

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HP – Hewlett Packard Corporation

Group Members: Furqan Mohyuddin M. Ali Aleem Zain-ul-Abideen

...................................................................................................................................................................................................................................................................... 18 2 LAHORE SCHOOL OF ECONOMICS ............................ 13 QSPM (QUANTITATIVE STRATEGIC PLANNING MATRIX) ............................................ 17 Inventory turnover ratio ....... 16 Net profit margin ................................................. 4 Improved Vision statement ....................................................................................................................................................................................................................................................................................................................................................................................................................................... 10 SPACE (STRATEGIC POSITION & ACTION EVALUATION MATRIX) .............................................................................................................. 17 Debt to worth ratio ................................................................................. 16 Quick ratio ....................................................................................................................................... 11 IE (INTERNAL-EXTERNAL MATRIX) ...................................................................................................................................................................................................................................................................................................................................................................................................................................... 9 CPM (COMPETITIVE PROFILE MATRIX) ......................................... 5 Threats .................................................................................................................................................................................................... 17 RECOMMENDATIONS ........................................................... 7 SWOT Matrix ................................................................................................................................................................................................................................................................................................................................................................................................................................. 6 IFE (INTERNAL FACTOR EVALUATION MATRIX) ........................................................................................................... 7 EFE (EXTERNAL FACTOR EVALUATION MATRIX) .............................................................................. 17 Sales to receivables ratio ......................................................................................................HP – Hewlett Packard Corporation 2012 Table of Contents Introduction .............................................................................................. 17 Working capital ....... 5 Strengths ................................................................................................................. 3 Mission Statement of Hewlett Packard ................................................................................................................... 5 Opportunities ........................................................................................................................................................................................... 3 Vision statement of Hewlett Packard .. 5 Weaknesses .................................................................... 4 Why? ....................................... 14 Financial Ratio Analysis ............................................................ 17 Return on assets ...................................................................................................................................................................................................................................................................................... 16 Current ratio .......................................... 4 SWOT ANALYSIS ........ 4 Improved Mission statement .................................................................................................................................................................... 16 Operating profit margin .... 16 Gross profit margin ratio.....................

and support offices spread across the U. manufacturing plants. and more than 120 countries. Mission Statement of Hewlett Packard “We are committed to developing a wide range of innovative products and multimedia services that challenge the way consumer’s access and enjoy digital entertainment. including customers in the government. technologies. By 1997. hand-held calculator. started their own business in a garage behind Packard’s Palo Alto home. William Hewlett and David Packard. The company. and Corporate Investments. the Imaging and Printing Group (IPG). Services. solutions and services to individual consumers. introduced its first computer in 1966. HP introduced the LaserJet printer.” 3 LAHORE SCHOOL OF ECONOMICS . offering products. Products and services Hp is a leading company. small and medium sized businesses and large organizations Hewlett-Packard Company (HP)is a leading company offering a wide range of products. the Personal Systems Group (PSG). health and education sectors. Hewlett and Packard formalized their business into a partnership called Hewlett-Packard. The worldwide operation with research facilities. One year later. and sales. solutions and services to consumers. the company pioneered the era of personal computing by introducing the first scientific. Hewlett-Packard's business is vast in scope and size. which originally produced audio oscillators. HP Software. The company manufactures more than24. Five years later. two Stanford graduates in electrical engineering. ESS and HP Software are reported collectively as a broader HP Enterprise Business.In 1972. Its operations are organized into seven segments: Services. computing. By ensuring synergy between businesses within the organization. Storage and Servers (ESS). which would become the company’s most successful product ever. software. Enterprise. Hewlett-Packard introduced its first personal computer in 1980. service. small. software. annual net revenue exceeded$42 billion and HP had become the world’s second largest computer supplier. 000 electronic products and systems for measurement. technologies.and medium-sized businesses (SMBs) and large enterprises.HP – Hewlett Packard Corporation 2012 Introduction In 1938.5 million in 1951 to$3 billion in 1980. HP was incorporated in 1947 and began offering stock for public trading 10 years later. and calculation. we are also constantly striving to create exciting new worlds of entertainment that can be experienced on a variety of different products.S. Annual net revenue for the company grew from$5. HP Financial Services (HPFS).

Why? They are brief and to the point. services and solutions that satisfy customers need. services and solution of highest quality and deliver more value to our customers that earn their respect and loyalty. 4. 7. 5. Components Customers Products/ Services Market Technology Survival. # 1. Growth. 9. 8. Profits Philosophy Self Concept Public Image Employees  Vision statement of Hewlett Packard “We recognize and seize opportunities for growth that builds upon our strengths and competencies. to use our profit and to ability to develop and produce innovative products. 6. Improved Vision statement To view change in market as an opportunity to grow. It is highlighting all the main points 4 LAHORE SCHOOL OF ECONOMICS .” Improved Mission statement To provide product. 3. 2.HP – Hewlett Packard Corporation 2012 Sr.

3. 5. 2. Lack of in-house management consulting division 7. 7. Developing of own hardware and software 5. 3. R&D department has significantly less investments compared to historical spending 8. 2. Highly talented workforce. Pay cuts has brought low morale to employees 9. Global presence 9. 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 Globally acceptable software used in the laptops which makes them easy to use and repair. Weaknesses 1. Wide range of innovative products 4. Strong financial condition. 7. The company is spread through the world and has a very effective management that constantly keeps a check on their products functioning. 4. 4. 8. Slow speed to market or responsiveness Opportunities 1.HP – Hewlett Packard Corporation 2012 SWOT ANALYSIS Strengths 1. The prices are very affordable. 10. Brand name 2. 5 LAHORE SCHOOL OF ECONOMICS . 5. Struggling to Add Value and Remain Profitable in Low-Cost High-Volume PC Business. Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy Financial condition leans very heavily on the state of our economy not just in the US but worldwide 6. application development and support 10. 6. Low debt 3. Web technology used for product awareness & sale 6. World and has ranked 20th in the Fortune 500 list. Ability to provide end-t0-end IT solution H/W.

I would also point to EMC as their strongest overall threat in the storage market. 6. and professional services . especially since the beginning of 2003. 2. The innovative behavior of Apple Inc can be a serious factor in the falling of sales of HP.would be IBM. Biggest threat to the HP is Apple Inc's MAC. 9. The HP is not paying attention to the designing of their Laptops or customization like DELL and VIVO does. 8.HP product Availability of substitute Less global coverage than competitor. HP has marketed itself as a brand for the ordinary people who are very well appreciated but their ads need to have celebrities to endorse their products. The popularity of the Mac can seriously harm the market for the HP laptops. The HP is continuously keeps on updating their technology which keeps the interest of the customers intact.HP – Hewlett Packard Corporation 2012 8. 10. 10. 5. HP's biggest threats on a system level . The cartridges are easily available for the printers. HP association with the spying scandal. Threats 1.looking at companies with a broad breadth of storage. 3. servers. Competitor’s technology & pricing Low compatibility with non. 6 LAHORE SCHOOL OF ECONOMICS . 9. 7. Their line of Laptops COMPAQ has a very strong hold of the middle class people which includes students also. 4.

HP – Hewlett Packard Corporation 2012 IFE (INTERNAL FACTOR EVALUATION MATRIX) INTERPRETATION: The main strengths of electronic products and systems retail market in which HP operates is the strong brand names and recognition of management also corporate culture and post sales services are of relative importance. EFE (EXTERNAL FACTOR EVALUATION MATRIX) 7 LAHORE SCHOOL OF ECONOMICS . As in case of HP due to high product diversification and venturing into new product markets costs have been high and though net sales have increased since 2006.5) shows a strong internal position but there are still issues to be sorted out.72 (which is greater than 2. The weighted score of 2. too.

HP has not been able to work well with the foreign exchange market and it has not been able to expand its business activities in Asia 8 LAHORE SCHOOL OF ECONOMICS .5) shows that the HP has been able to manipulate the opportunities and have been able to counter threats and is doing rather well but its business isn’t still great. HP can still manipulate the opportunities and counter the threats that it has failed to do i.e.62 (above average and midpoint 2.HP – Hewlett Packard Corporation 2012 INTERPRETATION A weighted score of 2.

HP – Hewlett Packard Corporation 2012 SWOT Matrix 9 LAHORE SCHOOL OF ECONOMICS .

HP – Hewlett Packard Corporation 2012 CPM (COMPETITIVE PROFILE MATRIX) 10 LAHORE SCHOOL OF ECONOMICS .

HP – Hewlett Packard Corporation 2012 SPACE (STRATEGIC POSITION & ACTION EVALUATION MATRIX) 11 LAHORE SCHOOL OF ECONOMICS .

Their strategies should be one of the following: Vertical and horizontal integration Market penetration Market development Product development Diversification 12 LAHORE SCHOOL OF ECONOMICS .HP – Hewlett Packard Corporation 2012 INTERPRETATION: According to the space matrix score HP falls in the “ AGGRESSIVE quadrant” .

HP – Hewlett Packard Corporation 2012 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 13 LAHORE SCHOOL OF ECONOMICS .

HP – Hewlett Packard Corporation 2012 QSPM (QUANTITATIVE STRATEGIC PLANNING MATRIX) 14 LAHORE SCHOOL OF ECONOMICS .

HP – Hewlett Packard Corporation 2012 INTERPRETATION: According to the total attractive score of QSPM HP should go for “ HORIZONTAL INTEGRATION” 15 LAHORE SCHOOL OF ECONOMICS .

61% to 24. This means that profitability at the basic level has increased from previous year. 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. Operating profit margin Profitability before interest and tax has increased from 4. This means that overall profitability has also increased.15%. which shows a poor use of working capital.38 to 1.76%.7% to 6.00% to 7. This is a sign of good ratio. This means that working capital to meet short term obligations has decreased. 16 LAHORE SCHOOL OF ECONOMICS .HP – Hewlett Packard Corporation 2012 Financial Ratio Analysis Gross profit margin ratio The gross profit has increased from 23.53%. This is a sign of good ratio. This is a sign of bad ratio. Current ratio Current ratio has decreased from 1. Net profit margin This also has increased from 2.35.

93.63 to 8. This shows that the ability of a company to endure difficult financial periods has increased.52% from 9. Inventory turnover ratio The ratio has decreased from 9.This is the sign of good ratio. This means that debt financing has decreased and hence the risk also has decreased.16 to 1. Return on assets This ratio has increased from 6. which means that more capital is tied up in inventory which is not a good sign.874 to $12.0% . This quick ratio is acceptable but has decreased. Working capital Working capital has increased from $11. This means that the efficiency in collecting accounts receivables has deceased. Debt to worth ratio This ratio has decreased to 6.414.HP – Hewlett Packard Corporation 2012 Quick ratio This ratio has also decreased from 1.12%.43.75 to 8. Sales to receivables ratio It also has decreased from 8.9% to 13. So this shows that the ability to pay immediate financial obligations has also decreased.13. 17 LAHORE SCHOOL OF ECONOMICS .

 According to the total attractive score of QSPM HP should go for “ HORIZONTAL INTEGRATION”  According to the space matrix score HP falls in the “AGGRESSIVE quadrant”.HP – Hewlett Packard Corporation 2012 RECOMMENDATIONS  HP falls in first region of IE matrix and their main focus will be on “GROW AND BUILD” and they will mainly focus on strategies which are: Market development Horizontal integration. Their strategies should be one of the following: Vertical and horizontal integration Market penetration Market development Product development Diversification 18 LAHORE SCHOOL OF ECONOMICS .

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