Hewlett-Packard (HP) is the first time ever the world’s largest technology

vendor in terms of sales. Besides that, HP also had been acknowledged as the largest
company in worldwide personal computer (PC). HP is the company that introducing
numerous innovative products and also provides technology solutions to consumers,
businesses and institutions globally. Hence, HP considered as the largest information
technology firms in the world.

The table below is the SWOT analysis of HP:

Strengths
 Leading provider of personal
computers and imaging and
printing
 Multi-vendor customer services,
including infrastructure
technology and business process
 outsourcing, technology support
and maintenance, application
development and support services
 and consulting and integration
services
 Ability to provide end-to-end IT
solution H/W, application
development and support
 Highly talented workforce
Opportunities
 Expanding presence in cloud
computing market
 Expanding portfolio of
imaging and printing solutions
 Restructuring of internal IT
structure
 Emerging markets, particularly
BRIC countries 
Weaknesses
 R&D department has
significantly less investments
compared to historical
spending
 Lack of in-house management
consulting division
 Financial condition leans very
heavily on the state of our
economy not just in the US but
worldwide
 Pay cuts has brought low
morale to employees
Threats
 Increasing competition on
imaging and printing
 Maintain technical talent
 Major competition in PC
branch from other companies
 Foreign currency exchange rate
changes

Due to the HP income statement, the company had continuous growth in sales,
net earnings, and earnings per share. Hence, the total liabilities and stockholder’s
equity was increase continuous three years.
There is financial ration listed below:

Company
P/E (TTM) 10.20
Price to Revenue (TTM) 0.68
Price to Cash Flow (TTM) 6.19
Price to Book (MRQ) 2.12
Revenue/Share (TTM) 54.55
EPS Fully Diluted (TTM) 3.94
Dividend/Share (TTM) 0.32
Book Value/Share (MRQ) 18.95
Cash Flow/Share (MRQ) 6.03
Cash (MRQ) 4.57
Operating Margin (TTM) (%) 9.33
Net Profit Margin (TTM) (%) 7.17
Gross Margin (TTM) (%) 24.18
5 Years Annual Growth (%) 12.26
5 years Annual Revenue Growth Rate 7.77
(%)
5 Years Annual Dividend Growth Rate -
(%)
5 Years EPS Growth (%) 34.98
Quick Ratio (MRQ) 1.02
Current Ratio (MRQ) 1.18
LT Debt to Equity (MRQ) (%) 41.31
Total Debt to Equity (MRQ) (%) 49.51
Return on Equity (TTM) (%) 22.01
Return on Assets (TTM) (%) 7.81
Return on Investment (TTM) (%) 12.28
Asset Turnover (TTM) 1.09
Inventory Turnover (TTM) 14.40

MCQ= Most Recent Quarter

TTM= Trailing Twelve Months

Furthermore, HP ‘s goal has been selling and marketing its products and
services through programs designed to improve profit margins and HP promotes its
products directly to consumers, businesses, and through a variety of business partners.
In 2007, the company started a new branding effort with its channel partners by
borrowing from Dell’s direct-sales marketing. HP also offers a variety of choices to
manage aging and unwanted computers in order to minimize the impact of
environment. Some of the choices are trade-in, return for cash, recycle unwanted
computer hardware, and donate the used computer equipment with partnership with
the National Cristina Foundation (NCF).

Moreover, Apple computers (Macs) are one of the fastest growing computer
manufactures in United States. Apple using stronger portable sales and increase in
unites moved through retail channels to match the market. Lenovo, Acer, Apple, HP,
and dell are aggressively seeking the business customer where price about 10% higher
than the industry average. Panasonic Corp also aimed at business users where they
make laptop high priced, ultra-rugged computers for military and law enforcement.
HP competes on substitute products such as “remanufactured” or “refilled” ink
catridges with Eastman Kodak, Canan, and others. They reducing the cost of printers
but making up the loss by selling the ink cartridges at higher price. In china, one of
the world’s fastest-growing computer markets, Dell Inc. aggressively improving their
global strategy by introducing a new computer with price staring at about $335 which
will be available first in China and then other countries such as India and Brazil.
Lenovo teamed up with Microsoft Corporation by offering “pay as you go” computer
model that puts a PC in a consumer’s hands for an upfront price if about $150.

As indicated in the case, Personal Systems Group (PSG) and Imaging and
Printing Group (IPG) are the most profitable business segment. Also, more than 60%
of the overall net revenue was generated from outside of the United States. This may
suggest that HP should concentrate on its global strategy to continue record revenue
growth by selling more consumer computers and printers in the international market.
In this case, intensive and integration are the strategies recommended for HP to
generate more revenue from the emerging markets particularly in China and India.

However, HP is advised to focus on market penetration and product

development since the information technology industry is develops rapidly. In terms
of product development, HP can consider to improve its present PCs to catch up with
the touch screen trend. It can be seen that there are many PCs as well as cell phone
today were characterized by this function. Besides, HP should invest more on its
marketing efforts through direct sales marketing. We highly recommend the company
to build up direct sales force to market its product in China and India. While internet
selling may not competitive enough when compared to Dell, however, HP can offer
the facility of product customization through the internet as to attract more internet
buyers. Additionally, the outlook for IT industry is expected to continue to grow, thus
HP may pursue forward integration by establishing its own stores. Establishing own
stores will also set up the connection with the manufacturer as to produce more
efficient through the concept of build-to-order. As a result, these can ensure HP to be
more competitive and to better serve customers.

Some of the HP Corporation strategies analyses are stated as below:

Competitive Profile Matrix (CPM)

HP DELL IBM
Critical Success Weight Rating Score Ratin Score Ratin Score
Factor g g
Financial Position 0.13 4.00 0.52 4.00 0.52 3.00 0.39
(Sales)
Marketing/ 0.12 4.00 0.48 3.00 0.36 3.00 0.36
Advertising (Direct
Sales companies)
Research & 0.17 4.00 0.68 3.00 0.51 2.00 0.34
Development
(TRL,s) (TSG)
Customer Loyalty 0.05 2.00 0.10 2.00 0.10 4.00 0.20
(repeat purchase)
Quality of Products 0.10 3.00 0.30 3.00 0.30 4.00 0.40
(performance &
efficiency)
Price Competition 0.10 3.00 0.30 2.00 0.20 2.00 0.20
(Ink Cartridges)
Management 0.05 2.00 0.10 3.00 0.15 2.00 0.10
Global Expension 0.10 3.00 0.30 4.00 0.40 4.00 0.40
(Bricks)
Market share (sales) 0.08 2.00 0.16 3.00 0.24 3.00 0.24
Vrarity of Prodcuts 0.10 3.00 0.30 4.00 0.40 3.00 0.30
(Software, Web
Securities)
Total 1.00 - 3.24 - 3.18 - 2.93

External Factor Evaluation (EFE)

Opportunities Weight Rating Weight Score

Globalization in (PCs) 0.08 3.00 0.24
Acquisitions 0.07 3.00 0.21
Customized (Solution Provide) 0.05 3.00 0.15
Covering Major Market Sectors 0.04 2.00 0.08
 (public, edu, business)
Up-selling 0.05 2.00 0.10
Cross selling 0.05 2.00 0.10
Product Development 0.06 3.00 0.18
Innovation (more towards 0.05 2.00 0.10
mobile device)
Related Diversification 0.07 2.00 0.14
(software, web securities,
printing)
Strong/ Active Distributers 0.06 4.00 0.24
B2B selling (to Dell) 0.06 3.00 0.18
Product Differenciation 0.04 1.00 0.04
Threats Weight Rating Weight Score
Intense competition from other 0.06 2.00 0.12
PC manufacturers
Short Product Life Cycle 0.09 3.00 0.27
High Switching Cost 0.06 2.00 0.12

Frequent changing customer 0.08 3.00 0.24

Demand and Behaviours
Price War (Ink Catridges) 0.03 2.00 0.06
New variable Competitors 0.05 3.00 0.15
Increasing competition on 0.05 3.00 0.15
imaging and printing
Total 1.00 - 2.87

Internal Factor Evaluation (IFE)

Strength Weight Rating (3 or 4) Weight Score

Technology advancement 0.14 3.00 0.42
Branding obvious and easily 0.05 4.00 0.20
recognized
Technology Research Labs 0.09 3.00 0.27
Customer Loyalty 0.05 3.00 0.15
International Trade 0.06 3.00 0.18
World’s leading brand 0.05 3.00 0.15
Product life Extension 0.07 4.00 0.28
Larget IT Firms (Application 0.10 3.00 0.30
Industry)
Engineering Design 0.05 3.00 0.15
Weakness Weight Rating (1 or 2) Weight Score
Unit Vendor Shipment 0.08 2.00 0.16
Lack of in-house management 0.07 2.00 0.14
consulting division
Decreasing in R&D budget 0.10 1.00 0.10
Not using online selling 0.09 2.00 0.18
Total 1.00 - 2.68