Hewlett-Packard Under Carly Fiorina, and After Her

1) How do you judge the quality of a product, whether a computer or something else? Is it mostly by price? Discuss your perception of price and quality as well as any ramifications. The quality of a product depends how well it was made and how well the product works to meet expectations. Price can be a determinate of quality, but this is not always true. A product may be cheaper and still be of good quality if the company has figured out a way to reduce overhead cost which helps determine price.

I normally base my buying decisions off of quality and price. Many companies cut cost to make their products cheaper so their sales will increase, but lowering cost is not always a good plan. The companies that cut prices normally fall behind because the companies that have better quality products get ahead in the long run.

2) “Tradition has no place in corporate thinking today.” Discuss this statement. Many companies stay active by practicing tradition (ex.

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Starbucks employee treatment). Though tradition is an important aspect of many companies, tradition can hinder companies’ growth over time and the need for innovation can be faulted. I think tradition can be kept within a company and the company still be successful, but traditions gradually change to keep the company’s original objective alive. Depending on the company and the company’s objective determines whether tradition can be incorporated or not.

3) Giant organizations are often plagued with cumbersome bureaucracies. Discuss how this tendency could be prevented as an organization grows to large size over many years.

Bureaucracy can limit the growth and innovation of a company. The leaders/management of a company need to be able to promote change and motivate others throughout the organization. Bureaucracy starts to form between different levels of an organization and can cause decision making processes to become slower, such as the case with Carly. A company may try decentralizing and delegating jobs to different parts of the organization. Though decentralization and delegations can be problematic for companies, it can also speed up processes and be less costly to the organization. Having strong leadership within each department can deter any fraudulent or selfish acts and allow for a more successful business with less bureaucracy.

4) Playing a devil’s advocate, present the case against the Compaq merger. Some risks were present in the potential merger of HP and Compaq. How would the merger take place? Would the merger affect the overall structure and business plan of HP? Was PC growth the future of HP and would this venture help HP become and stay profitable? How long would the merger take? Would this merger be cost effective or would it be more costly to overtake Compaq? Would loyal customers to each brand stay around throughout the merger or would the customers switch their brand loyalty? All of these questions are potential arguments and reasons why HP should not complete the merger with Compaq. In the end the merger was a good decision for HP even though it took a while for the company to get where forecasters projected.

5) “HP is gouging the consumer in charging such high prices for its ink refill cartridges. Sure, it’s a high profit item, but such profits cross the line and are obscene.” Discuss. HP’s printer and ink business had high profits to help keep its other products stay in production. Though ink refills was HP’s sweet spot in the market, HP would probably not hold out in the long run and would eventually need to venture into other types of markets with a strong presence to stay afloat. Just because HP was successful in the ink cartridge market in the beginning did not mean the company would remain that way, especially with the other competition in the technology market.

6) Do you think the 17,000 jobs lost in the merger was laudatory, or should it be condemned? What would swing your opinion? Cost cutting is to be expected when mergers or reorganization occurs in a company. Even though 17,000 is a large number of job losses it might have been warranted. When merging the company there were many duplicate jobs and departments. With so many duplicate positions it can be hard to manage a successful company. These duplications can cause excessive amount of costs that aren’t warranted. The job cutting in the case of HP seemed to be necessary but have been a bit excessive in some instances.

7) Why do you think Hurd’s efforts were so successful and so quickly accomplished? Support your conclusions as persuasively as you can. Hurd’s success came after the merger was already completed. He took advantage of what was already completed and made the other necessary changes to finish making the company successful. His strategic marketing and application of more costs cutting techniques helped the company reach Carly’s projected goals. Both Hurd and Carly should receive credit for making HP the company it is today since the merger.

8) Why do you think Dell lagged so far behind HP in tapping into retail markets? Dell was succeeding in the business market and staying very profitable. They probably focused all of their attention on this market instead of targeting both markets (business and retail). Since Dell used a low price strategy, the company remained one of the top companies in the market and did not need to worry about expanding and incurring more costs. None of the companies expected the overseas companies to start producing and marketing in the United States thus increasing competition in the technology market. Because Dell focused on low prices and the business market, the invasive competition made them start expanding to the retail market which increased costs and prices of their products. This increase and change took time and affected the company’s profits. I think this is why it took so long for Dell to enter the retail market.