Hewlett Packard Company was founded in 1939 by Bill Hewlett and Dave Packard. The company was incorporated in 1947 and became a public company in 1957. HP is based in the United States and has its headquarters located in Palo Alto, California. The company has specialized in the development and manufacture of personal computers, computer peripherals, software and hardware. The main products are personal computer hardware, data storage appliances and other related devices. HP markets its products to individual customers as well as corporate customers.
The company has adopted both direct and online marketing strategies for its products in the global markets. Since its establishment, the company has encountered stiff competition from other companies in the global markets. In the last one decade, the company has adopted several strategies to improve performance and create sustainable market position in the global scene. The merger with Compaq was established with an aim of improving the global position of the company as well as adopting better technologies (Hewlett-Packard Development Company, L. P. 2010). HP has adopted various strategies to improve its market share in the global scene.
Adoption of modern technology has been a major success factor in the efforts to come up with differentiated products. There has been stiff competition in the market leading to decline in the market share for the company. The management has made tremendous change to ensure its brands are acceptable in many markets all over the world (Harris, 2007). External Environment Technology in the personal computing industry has been very innovative and this has been adopted by HP to manufacture competitive products. A team of researchers has been hired to carry out innovative products.
The company has a good system which integrates cultural diversity by working with different personnel and customers. The culture of the company is compatible with different national cultures as well as diversified social systems. HP employs people from different cultures to work in regions where they understand the cultural practices. Few cultural conflicts have been experienced at the company. The political climate has been very good in the regions where the company has its operations. Global economic crisis of the 2007/2008 affected the performance of the company since the sales volume reduced by a great margin.
The company is recovering from the shock of the economic crisis and profits have been recorded in the recent past (Malone, 2007). Industry Analysis (Porter’s Framework) Bargaining power of buyers There is no single influential buyer in the industry. There are many buyers in the market this does not provide any single buyer a strong bargaining power. Since the company markets its products to both corporate and individual customers, there are a diversified number of customers and in case one customer fails, there are others to support the company (Banna, 2008). Bargaining power of suppliers
Suppliers to the company are many and there is no single supplier with monopoly of providing materials to the company. This provides the company with enough control over its suppliers since prices for products are reduced. There is no dominant supplier in the market and the company has adequate control over the pricing strategies adopted by the suppliers (Banna, 2008). Rivalry among competitors Stiff competition in the industry has resulted to rivalry among competing firms. Each company has differentiated its products to attract as many customers as possible.
Use of modern technologies to develop market oriented products has been a common practice at the company and this has enabled the management to come up with better products. Rivalry among competitors in the market has resulted into price wars where companies are introducing different pricing strategies for their products (Banna, 2008). Threat of potential entry of new companies There is no regulation on entry of new companies in the industry and this has resulted into many companies entering the market. This has resulted into stiff competition for the available opportunities in the market.
There are no barriers of entry to the industry and this has provided better opportunities for new investors to establish themselves in the market. The technology used in the industry is not restrictive and new companies can access ideas and knowledge about production of similar products. High profits made by existing companies in the industry have attracted more potential companies to invest in the industry. In addition, there are no barriers for excess capacity to exit the industry. The potential profits in the industry have made the large number of competitors fail to exit the market and this has resulted into price wars (Banna, 2008).
Threat of substitute products Threat for substitute products has been great since there are different products which can be substituted for the HP product range. There are no barriers to introducing substitute products and companies are free to come up with better alternative products in the industry. There are many substitute products in the industry and this has intensified the level of competition (Banna, 2008). Critical Success Factors (CSFs) HP has a strong brand image in the global market. The computing industry has recognized that HP has developed better strategies of promoting its brand image.
Brand management has been successfully been done by creating innovative technologies which provide better market position to the company. The quality of the products manufactured by the company is high and this has provided better opportunities to compete successfully in the global market. As the company maintains a high quality profile for its products, it has also managed to increase the volume of output from its production systems. The company has adopted mass production and this provides economies of scale. As the volume of production increases; the cost of production decreases.
The company has established strong systems of governance to manage its resources effectively. Project management strategies have been adopted to maintain high technology levels in the company. IT systems of the company have been developed to compete successfully with substitute products in the market. A strong team of research has been established to carry out market surveys for developing products which will provide a large market share in the current market situation and in the future (Hewlett-Packard Development Company, L. P. 2010).