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Matrix
Matrix
SWOT Matrix
Helpful Harmful
Internal Strengths Weaknesses
origin Strong market position High leverage
Prominent brand name Flaw in product design
Strategic acquisition Weak market segment
In house development of integration
software and hardware Weak financial position which
Green technology by is evidenced by massive pay
managing aging and cut
unwanted computers
External Opportunities Threats
origin Expanding presence in cloud Projected decreases in the IT
computing market market.
Expanding portfolio of Hyper-competitive
imaging and printing environment.
solutions Less control of global market
(London Roah North End Portsmouth, -)
Strengths-
Hewlett Packard knew the importance of branding towards the success of HP. In the late nineties, it
began to shift its image to encompass more than just the business to business segment making
adjustments to increase its presence in the consumer market as well. (London Roah North End
Portsmouth, -)A branding launching called “one voice” is initiated to integrate the line of consumer
electronic and computer hardware products.
Weakness
Opportunities
Threats
2. Hyper-Competitive environment.
Although Hewlett-Packard recently overtook Dell in sales,, the latter remains a inspiring
competitor, as are other companies such as Toshiba, lenovaGroup and Aver. It competes in
terms of price, quality, brand, technology, reputation, distribution and range of products. The
company’s competitors in enterprise servers and storage include IBM an in storage there is the
EMC Corporation, Dell in industry standard servers and Sun Microsystems in UNIX-based servers.
The strategic Position and Action Evaluation or the SPACE Matrix is a four-quadrant framework which
indicates whether aggressive, conservative, defensive or competitive strategies are most appropriate for
a given enterprise or company. The axes of the SPACE matrix represent the two internal dimension of a
company which are competitive advantage (CA) and financial stability (FS) and two external dimensions
which are environmental stability (ES) and industry strength (IS). (Caroline, 2008)
Financial Srength In the Space Matrix- Y
HP Dell Apple
(+1 worst, +6 best) Million Ranking Million Ranking Million Ranking
http://en.wikipedia.org/wiki/Market_share_of_leading_PC_vendors#cite_note-6
Product Malfunction rate 25.60% -5 18.30% -4 17.40% -2
http://www.engadget.com/2009/11/17/laptop-reliability-survey-asus-and-toshiba-win-hp-fails/
Customer Loyalty/
SATISFACTION 7.80% -6 7.80% -6 9.20% -1
file:///C:/Users/LEE/Desktop/0,2817,2400794,00.asp.htm
Average-CA -4.3 -4.33 -1.33
Internal Strategic Position External Strategic Position
Competitive Advantage (CA) Industry Strength (IS)
Product Quality -5 Growth Potential 5
Customer Loyalty -6 Profit Potential 5
Market Share -1 Labour Cost 4
Average -4.00 Average 4.70
Total X-axis Score = 0.75
Financial Strength (FS) Environmental Stability (ES)
Liquidity 4 Pressure from Substitutes -5
Cash Flow 4 Barriers to Entry -4
Return On Investment 6 Rate of Inflation -2
Average 5.00 Average -3.70
Total Y-axis Score= 1.30
(Simister, 2011)
Figure 1
According to SPACE matrix above, HP is located in the aggressive quadrant. SPACE Analysis recommends
that business in such a strong position take the following actions:
(a) Grow within the market through acquisition (Simister, 2011). This can be observed when HP
successfully acquire computer companies like Compaq, it can eliminate its competitors by
merging with other mega computer company thus improve the survivability of HP.
(b) Continue to invest in innovation to sustain and build the competitive advantage (Simister,
2011).HP can increase its research and development efforts as the technology of HP is less
innovative compared to Apple which is excellent in innovation. Thus, HP needs to develop
unique technology for its product series.
(c) Raise the stakes for other competitors to play the game. This may be through reducing prices to
levels that competitors find difficult to match. Record-setting earnings for the December quarter
put Apple ahead of HP as the world's number one PC vendor, with the company's combined
sales of 15.4 million iPads and 5.2 million Macs. Apple's top performance was followed by HP,
Lenovo, Dell and Acer, respectively. (Apple Insider, 2012). Since HP used to be the world’s
largest technology vendor in term of sales, it should be economies of scale strategy to produce
products in large quantity at the lowest cost.
(d) Get feedback from customers. Since HP is a multinational company, cultural and management
may differ across countries. Therefore, HP can incorporate customer feedback in its product
development to better understand the needs of the customers.
(e) Restructure their financial management. To improve their financial structure, HP can issue IPO
to finance its expansion so that its capital is not dominated by debt. The high leverage ratio
increase the solvency risk and interest cost to HP.
Bibliography
Apple Insider. (2012).
Caroline. (2008, Jun 6). The Space Matrix Explained. Retrieved March 26, 2012, from Pressbox.co.uk:
http://www.pressbox.co.uk/detailed/Education/The_SPACE_MATRIX_Explained_201490.html
London Roah North End Portsmouth. (-, - -). SWOT AnalysisnHewlett Packard. Retrieved March 22, 2012,
from http://www.marketingteacher.com/swot/hewlett-packard-swot.html#
Simister, P. (2011, September 1). SPACE Analysis- Strategic Position and Ac. Retrieved March 26, 2012,
from http://www.differentiateyourbusiness.co.uk/space-analysis-strategic-position-and-action-
evaluation-matrix