Hewlett-Packard, Inc Essay
Hewlett-Packard, Inc. has been one of the leading IT Company competing with DELL. Throughout the company history, Hewlett-Packard’s top management team has always sought to ensure that the company stays ahead of its competitors. Though this has been the case, strategic decisions made by the company’s past and present CEOs, especially, Carleton S. Fiorina and Mark V. Hurd may differ as much as they may be similar in some ways. During Carleton S. Fiorina’s tenure, the main focus was on the future and all strategic decisions and investments were made for future growth and stability.
This kind of investment was at the expense of any decisions that would ensure growth at the time. Fiorina was the HP CEO from 1999 to 2005 and during her tenure the main causes of loss of revenue and market share were due to the fact that she not only focuses on the future rather than current growth but she made investments that seemed costly to the company at the time but which she believed could bring greater revenue growth in the future. Great opposition from managers and some board members, coupled with the scandal on leaked company information saw the company image delve into the negative causing financial damage to the company.
According to Evans-Correia (2005), “Broderick said HP still faces numerous problems. It continues to lose market share to Dell Inc. and its corporate-computing unit, which includes storage, software and server computers, has remained weak and unable to fend off competition from IBM and EMC Corp. “The company has good technologies, but their to-market strategy has not been effective. ”” Though the merger with Compaq brought increased revenue growth in the future, at the moment the merger was given a go ahead and completed, HP encountered its share of losses that were a little higher than it may have predicted initially and announced publicly.
The then CEO, Fiorina, was questioned about these losses and the apparent in-disclosure of these information to the public and board of directors. In his article, Intense Grilling Flusters Fiorina, one of the writers, Burt (2002) reported that “Just as he had done yesterday, Hewlett attorney Stephen Neal repeatedly grilled the chief executive about internal financial reports that predicted larger revenue losses for 2003 than HP projected in publicly issued statements. ” Increasing counterfeit products could also be seen as one of the setbacks that cost HP its revenue, image as well as market share.
While the merger with Compaq brought H-P an added competitive edge in the computer hardware manufacture, the acquisition of EDS, an HP Company will now see H-P attain a competitive edge in the IT Services sector. This means that both ventures are almost equally important to H-P in maintaining leadership in the IT industry. The Compaq merger/acquisition was aimed at gaining HP footing in the computer hardware industry while the acquisition of EDS was strategically targeted at giving the company the competitive edge in IT services and customer care.
While HP was mainly focused on the sale of printers, expansion to the computer hardware would prove strategic at the time the merger with Compaq was initiated. The moment EDS came on board, expansion and enhancement of the HP outsourcing service delivery was realized. During ex-CEO Fiorina’s tenure, the main strategic choices that were made were aimed at cost cutting and investment in the future with new ventures.
While Fiorina focused on new ventures and expansion of the business part of the company, Hurd focused on expansion, growth and retention of employees and enhancement of customer service and support. Fiorina was more focused on sales, high profits and numbers at all costs while Hurd focused on the company tradition of focusing on the employees as well as growth and expansion. While Fiorina went to on to cut jobs so as to cut on costs, Hurd took on a new stand by focusing mainly on all that could be done to maintain the best workers and staff retention as well as customer satisfaction.
As stated by Hurd and Lesjak in the HP Annual Report (2008), “The addition of EDS further expands HP’s comprehensive, strategically assembled portfolio that provides unparalleled capabilities for delivering end-to-end solutions. More importantly, EDS adds a world-class, globally scaled services capability to HP’s established leadership in hardware and management software. ” Since inception, the company has proven to be a greater competitor and leading in innovation and customer satisfaction.