Introduction
In any business environment, the players, especially the companies, must strive to gain the competitive advantage in order to withstand competition. Technology companies are faced with another challenge of adjusting with the rapidly changing technology in order to remain relevant in their markets. Such companies must adjust appropriately, both internally and externally. This paper analyses and evaluates the position of HP Company. It analyses the internal and external environment of the company and gives the company’s strengths, weaknesses, opportunities and threats. In addition, it identifies one of the problems that the company is faced with and proposes a solution to the problem.
Analysis
Hewlett-Packard (HP) is the world’s leading technology company that offers personal computing, printing, imaging and software services and provides an IT infrastructure, cloud computing and connectivity. It operates in over 170 countries globally.
HP operates in a broad industry environment that encompasses personal computing, IT, networking, software, imaging and printing. The two opportunities in this industry are the growing demand for these products and services as the world adopts information technology; and the changes in technology that results into new inventions. The two main threats are stiff competition from similar companies within the industry and the higher costs in adjusting with technology and maintaining customer satisfaction in terms of price.
In the general environment, the company’s opportunities are higher market share, the use of imaging expertise, wireless printers, among others. The threats include the cartridge business which lowers the demand for the company’s cartridges; competition from companies that offer cheap products; and the global economic downfall.
Internal analysis
The company’s products have strong brand name and automated packaging. The company offers high quality services, especially in printing, imaging, and networking. In addition, HP is properly organized in terms of global distribution of its products of services. Currently, it operates in over 170 countries. The threats, however, include high costs of manufacturing, marketing and distribution.
The SWOT Analysis
Strengths
Strong brand name – The brand name and the image of HP is strong globally. The company always tries to adjust its image as dictated by the changing market forces. This has greatly improved the company’s relationship with its retailers and the consumers. As a result, the company better understands the various market needs of the consumers and tailors its products accordingly. Currently, various consumer products are modeled in a manner that they lack costly features. Such products perfectly satisfy the pocket needs of the consumers.
“One voice” is a branding initiative that was launched by the company so that it can better integrate the computer hardware products and the consumer electronics. The company’s strategic and unique packaging has also strengthened the HP brand name. The automation of package design creation is cost saving and has resulted into greater consistency in packaging. This has made the company’s brand to be one the most recognizable brands globally.
Strong market position especially the global printer market – The global printer market is dominated by Hewlett-Packard as evidenced by the company’s market share of 40%. The company also dominates the PC market as well as the global server market. In addition, the company’s IT services market position has been greatly improved due to the acquisition of EDS.
Strategic and successful acquisitions – The Company perfectly understands the importance of strategic acquisitions and continues to capitalize on it. Recent acquisitions and mergers include 3Com (2010), EDS (Electronic Data Systems Corporation) (2008), Mercury Interactive (2006), and Compaq Computer Corporation (2002).
The acquisition EDS has improved the company’s IT services. In addition, the acquisition of 3Com accelerates the company towards a leadership position in the networking industry, currently dominated by Cisco Systems.
The company’s growth and expansion gives it a competitive advantage and creates value for both the customers and the investors.
Weaknesses
Poor market segment integration - The Company lacks significant presence in various market segments such as software and consultancy services, as compared to its competitors. In addition, the company’s marketing strategies are weak.
Opportunities
Diverting into cloud computing – HP, together with Yahoo! and Intel Corporation, created a multi-data center for research in cloud computing in 2008. This was aimed at promoting collaboration and eliminating barriers among industry. The HP Cloud Assure helps consumers in adopting cloud-based services. As the demand for cloud computing increases, the demand for the company’s services are most likely to increase.
Expansion of the printing and imaging solutions – Printing and imaging opportunities are vast in the commercial market. The company has the greatest potential of capturing the markets such as graphic arts, industrial applications, and outdoor signage. The company’s photo printing services enables the consumers to personalize and publish customized photos. The introduction of new technologies in digital printing and the launch of full wireless Photosmart printer is an added advantage.
Threats
Competition – HP operates in an extremely competitive environment. The company gets stiff competition from such companies as Dell, Toshiba, Aver and Lenova Group. The competition is seen in terms of quality, price, reputation, brand, technology, products, as well as distribution. The company also faces competition from white box or generically-branded products in some regions. The company’s storage and enterprise servers face stiff competition from IBM and EMC Corporation. Dell and Sun Microsystems offer competition in industry standard servers and UNIX-based servers respectively. The printing and imaging business receives direct competition from Canon USA, Xerox Corporation, Lexmark International, Seiko Epson Corporation among others.
Forecasted decrease in IT market – The global demand for IT products is predicted to fall with the economic slowdown. This has affected various HP’s market segments negatively in US and globally. The fall in demand for printer business is a great threat to the company.
Evaluation
The major problem that the company is facing is stiff competition from its peers. The main causes include non competitive product prices, lack of proper marketing and advertisement, and high distribution costs.
The company can be competitively advantaged and minimize the effects of competition if it ensures that the prices of its products and services are competitive. This can be achieved through minimizing both the production and distribution costs. The company should decentralize its manufacturing by opening up production sites in all the regions where it operates in order to lower the distribution costs. Through innovation and automation of manufacturing, the company stands a better chance of enjoying the opportunities of scale such as reductions in costs. The company should also emphasize more on its marketing and advertising.
Conclusion
It is beyond doubt that HP is a leading technology company considering its area of operation in terms of the industry and the geographical coverage. The company’s growth and expansion through acquisitions and mergers gives it a competitive advantage and at the same time creates value for both the investors and consumers.
Works Cited
Hewlett Packard. Hp-information, 2012. Retrieved 7 Mar. 2012 from http://www8.hp.com/us/en/hp-information/about-hp/index.html
Marketing Teacher.com. Hewlett Packard, 2011. Retrieved 7 Mar. 2012 from http://marketingteacher.com/swot/hewlett-packard-swot.html
Stricker, B., and Mangalindan, M. HP Completes Acquisition of 3Com Corporation, Accelerates Converged Infrastructure Strategy. HP News release, 2010. Retrieved 7 Mar. 2012 from http://www.hp.com/hpinfo/newsroom/press/2010/100412xa.html
Weissberger, A. HP acquires 3COM to battle Cisco for data center supremacy. 2009. Retrieved 7 Mar. 2012 from http://viodi.com/2009/11/12/hp-acquires-3com-to-battle-cisco-for-data-center-supremacy/
