Hp Strategic Management and Leadership

Comparison and evaluation Reference Appendices Appendix A Dell financial data Appendix B HP financial data 20 21 16 16 17 18 2 Task A Hewlett-Packard is currently a successful company operating within the computer and printer industry. In addition to its huge market coverage, HP has also been earning billions of dollars through quality products and ingenious development of new technologies. Question 1: Using appropriate analytical tools (such as PESTLE and five forces), analyses the external business environment in relation to the analyses cases. . 1. External environment of HP The PESTLE analysis is a strategic framework used to assess market growth and potential, the business position and direction or a strategy (Kettle, 1998). Besides, Porter (AAA) supported that this analytical tools also help to analyze the five forces that are the state of competition within the industry of computing manufacturers. Political and legal This includes the government”s set of laws and lawful issues shaping the conditions under which companies have to operate.

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The computer HP has to face certain restraints and problems that can arise in countries where political stability is not guaranteed, no matter whether where the warehouses operate production facilities or if HP does business with a particular country through exports. In other countries that HP does business with; still have respective, restrictive and qualified policies which are maintained to protect domestic manufacturers and production. Some rules often hold back and delay foreign companies such as HP from entering into these markets. 3 Economical The UK retail sector contributes approximately 19. % to the GAP and plays and important role in shaping the economy. With total sales of US$ 515. B in 2008, retail sector is the largest private sector employer in the I-J, and generates employment for approximately 3 mil people. The UK electrical and electronics retail industry grew at a CARR of 1. 44% for the period 2004-2008. The electrical & electronics sector accounted 26. 7% of total retail sales and was the seventh largest retail channel market. Computer hardware retailing category with 22. 7% share was the second largest retail category sold through electrical & electronics specialist retail channel.

The global computer hardware market reached IIS$411 billion in 2008, recording a growth of 7. 6% over last year. The European computer hardware market accounts for 39. 2% of the global market value. In the year 2008, the computer hardware retailing market n UK was US$11. 0 billion and has been growing ATA CARR of 3. 16% for the period 2004-2008. In the past five years, the usage of PC at home has increased dramatically. However the UK PC markets us beginning to feel the stress of the economic downturn and the sector is moving towards saturation.

The focus for the industry has shifted from capturing ћnew to market” prospects to driving the demand for replacement and secondary devices. ( Reporting,2009) Socio- cultural Hewlett Packard using its unique direct business model to make technology more affordable and accessible to people and institutions around he world so that they can take advantage of the tremendous economic and social benefits of more pervasive technology. To do this, HP is: Reaching out to customers around the world, using its customer direct model to bring affordable technology to new and emerging markets.

Growing its global employment to tap diverse ideas and skills, increase its understanding of global customer needs, and bring desirable technology jobs to developing economies, and developing a global supplier network to improve the performance and lower the cost of its systems. 4 The national demand especially in the UK is high for computers as it is pendent on the educational level existing in a specific country. The higher the educational standard, the higher is the demand for computers it is. Also, PC”s are getting more interfered in everyone”s daily life especially in the UK.

These days, young children are already getting used of using computers as they start using them at a very young age. Thus means that the next generation will hardly live and work without a computer in the future as this means that there are more surprises to come for HP and its competitors in terms of technology and more people getting habituated of using a computer. Technological Being one of the countries who were able to use the computer and the internet for the first time, the UK society is very mush adapted to technology.

In fact, statistics suggested that the employment sector is continuously using computers and related gadgets in their work activities; this greatly contributed to the growth of the computer industry. In addition, job openings for computer professionals are also said to double from 1996 until 2010. People had also grown accustomed to using the internet for work, paying bills, reserving airline tickets as well as shopping. Environment Analysis From the details of the company’s macro environment, several strengths can be identified. One of which is the relative stability of the United States in both political and economic terms.

HP has the liberty to design strategies that suits its needs and available resources. Aside from these, the outcome of the production and strategies of HP will be concentrated on the company considering that only a small part of the economic outcome goes to the government. This will help HP in achieving fast returns of investment as well as sufficient funds to develop other strategies. The data from the company”s macro environment also indicate that future growth and success are very likely. With a significant number of 5 undergraduates, pools for competent employees for HP can be reduced.

Production and development of strategies can also be affected due to limited workforce. In order to avoid major company losses due to labor problems, HP should choose strategies that are cost effective. This will help it buffer the effects of future economic crisis. Hap’s Micro Environment: Porter’s Five Forces Rivalry Rivalry is considered to be the strongest and most important force in Porter model. It represents the residence and number of firms competing for each other’s economic profits. The level of rivalry within HP”s environment can be described as high.

This is mainly due to the presence of several competing companies of similar sizes. Aside from this, these companies are also targeting similar market segments, making the level of rivalry even higher. Entrants For HP, the entrant factor can be considered as low due to a number of reasons. One of which is the fact that operating such business demands a considerable capital. A great deal of capital will not only be necessary for putting up the business itself but also in acquiring he best professionals and technology for product development as well as marketing.

Moreover, time is necessary for the company in order for it to flourish; HP started in 1939 and spent years of operation before it became a multi-billion dollar company. Aside from capital and time, entering the same business and competing with HP can be difficult due to customer loyalty and strong brand preference factors. Buyers 6 In the case of HP, the buyer power is fair. This assessment is based on the nature of buyer power sources surrounding the company. For instance, the buyer power for HP can be low since product demand is high and buyer incineration is low.

These factors suggest that the company has the power to control the amount of production as well as the prices its gives to the market. These buyer sources however, are off set by the presence of several substitutes. In addition, due to several competitors, products and services offered to consumers are undifferentiated. These make buyer power neither high nor low for HP consumers. Suppliers Similar to buyer power, the power of the suppliers with the company is fair. This is because supplier concentration for electronic parts and components is low. HP can deal with other suppliers for its production.

Considering that HP is a major company, other suppliers will be very willing to supply goods to a large company. However, HP should also note that healthy relation with suppliers is as important as those with its customers. So as not to affect the quality of its products, it is imperative that the company refrain from changing one supplier to the next. Substitutes As mentioned, the computer and printer industry is very competitive; HP is operating in a business environment where several major companies are producing and offering similar products or services. In addition, the target markets of these companies are similar as well.

The consumers then have several product options to choose from, making the level of substitutes high for HP. 7 1. 2. Opportunities and Threats Opportunities The company can use other means of distribution like internet retailing, which can possibly augment its sales and market access. The continuous use of computers and printers by office workers and home owners alike suggests that these gadgets will be in demand for several more years. The ability of the company to acquire pertinent consumer data allows it to develop products that are based on current consumer needs and preferences.

This enables HP to develop new products as well as establish customer satisfaction and loyalty. Threats The computer and printer sectors are both highly competitive industries. In the computer industry major companies Compact, Dell and IBM are some of the major companies producing similar products. On the other hand, Epsom and Canon are some of the strongest rivals of HP in the printer industry. Various marketing risks are also considered as threats for the company. Though HP can apply any marketing strategy, its effect on the market can vary. These effects must be analyzed thoroughly as it could irately affect the business outcome. Question 2: Using relevant frameworks, conduct an internal analysis of HP. Conclude the main strengths and weaknesses of HP derived from the above analysis 2. 1. Internal analysis of HP In fiscal 2010, as HP navigated a fragile economic recovery, all of these advantages were clearly evident. HP rebounded powerfully from the recessionary conditions of the prior year and reported growth in each reported business segment and in each of our three geographic regions. For the year 2010, HP delivered: Net revenue of $126 billion, up 10 percent year-over- ear GAP operating profit of $11. Billion, up 13 percent year-over-year GAP diluted earnings per share of $3. 69, up 18 percent year-over-year Non-GAP operating profit of $14. 4 billion, up 14 percent year-over-year Non-GAP diluted earnings per share of $4. 58, up 19 percent year-over-year While, their main competitor Dell only gained $53 million, there are decreases in 3 consecutive years. This is big advantage for HP as they could gain more investors as showing a really good sale condition. In addition, the earnings per share of HP is much higher than this figure in Dell ( $4. 8 compare to $0. 0) 2. 2. Strengths and Weakness Strengths Hewlett-Packard is a strong and well- established brand name within the computer and printer industry. This strength is particularly useful in market positioning, gaining new buyers as well as increasing profit margins. The company holds the majority of the computer and printer market as compared to other competitors. By means of this large market coverage, the company can continuously gain profit as well as acquire the capital to support its project plans and business strategies. HP has an access to major distribution channels which allows it to market its reduces in the most effective way. The company has been operating for years; years of successful business operation strengthens its capability to overcome past and even new challenges with tried and tested strategies. This capability also allowed the company to introduce its new products and implement strategies at the right time and place. Weaknesses The company has the ability to acquire useful customer data; however, due to volume, the company is unable to analyze all of the valuable information.

It must have the team or instrument that will sort market details and construct them into usable concepts or strategies. The company had gone through times when it is unable to sustain constant growth. Question 3: Based on the internal and external analysis, and synthesis of the SOOT summary derived from it, identify two key strategic issues that HP faced before acquiring Palm and explain thoroughly why you define them as the key issues Buying Palm, HP wants to get a foothold on the new market.

However, after the phone was released, Palm’s fortunes just fell further through the floor. People were”t buying Palm”s offerings because they were just poorly built hardware running a somewhat unfinished platform without much in the way of APS, all for essentially the same price as the phone and a variety of other options. Being owned by HP doses”t immediately solve that problem at all. Secondly, Palm”s recent first quarter guidance indicated that the company would burn through roughly $200 million in the first half of 2010.

That suggests HP will need to throw down another half a billion dollars just to keep its new Palm unit 10 operating at status quo through next summer. In order to do anything dramatic, HP will have to throw even more cash on the fire. Question 4: Using relevant frameworks (e. G. Insofar) identify which development tragedy HP used in the action of acquiring Palm and evaluate it using the SFA tool (10 marks) Suggest another alternative option you think that HP can possibly adopt to deal with its key strategic issues and again use SFA to evaluate it (10 marks) 4.

Development strategies (Insofar) In the case of acquiring Palm, applying the Insofar matrix framework (Insofar, 1 986), it can be unidentified that HP used the product development strategy with the ambition to further enhance its position in PC’s, mobile PC’s markets as well as smart phones market in which HP still at very lower as compare with other competitors. The acquisition with Palm brought HP the ability to develop the new HP Slates tablet PC and the new smart phone line with the Palm”s invention of Web’s mobile operating (IDS, 2010).

Products Existing News Existing Product development Reaction to key issues and Markets Market penetration/ develop the new tablet PC’s with the modern mobile Consolidation operating system to enhance position in the market. ј Palm acquisition New Market development Diversification Insofar Matrix 1 In order to analyze whether the applied strategy fits to HP the holistic SEA tool will be applied to assess. Suitability The strategy took the strengths of financial potential of the company and this acquisition strategy provided to the HP possibility to deal with the change in social-cultural due to increasing of using mobile devices.

In addition, in term of capability exploit R&D, this strategy help HP solve the issue of mobile operating system by method of acquisition Palm and its huge number of inventions. This is about the web’s and app development kits and the app space that Palm is building up. It gives HP a chance to really grow in a market that, standalone, is more than $120 billion and has grown 20% annually (Washington Post, 2010). It is also suitable develop strategy that make the different for HP in comparison with other competitors” strategies. Feasibility HP had made a number of acquisitions in the company”s history.

In the past, HP has acquired Compact brand to the business value of up to 25 billion USED, is regarded as a record of 2001 (CIT News, 2010). Despite 1. 2 billion USED is not small numbers, but not the big numbers in the information technology industry. The companies” reputation in this industry worth tens of billions of U. S. Dollars, and these firms do not even have a history of fame like Palm (IDS, 2011). Therefore, not mention about Palm benefit, it can be assess that this is reasonable price and it is possibility for HP to afford this deal.

Acceptability Finally, HP will have to convince key stakeholders in order to meet the ћacceptability” criterion (Quant, 2010). The investors might accept the strategy because of the opportunity of increasing gross margin and leads to the higher dividends. Besides, spreading the product portfolio can make the market risks 12 can be reduced. However, opportunity often goes with threat, the HP investors might not accept this strategy because of the worry of risk. 1 . Alternative suggestion Alternative strategy to the Palm acquisition, HP can use the market penetration strategy through organic development.

Products Existing Market penetration Existing Increase the market share of current products Markets C] Make more aggressive promotion campaign Product development News not only in US, but also E and Asia Insofar Matrix 2 Market penetration strategy aims to increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion. Restructure a mature market of US by driving out competitors and more penetrate EX. and Asia market with ore aggressive promotion campaigns and improving the existing product. . 1 Suitability By applying aggressive promotion campaigns, this strategy is expected to gain market share to overcome the issues from other competitors. This strategy is suitability with the capable of exploit superior resources and competences of HP. The company can build existing product improvement on its own capabilities. Furthermore, the penetration market strategy also sticks to existing market such as US, EX., Asia, both of them are which the organization knows well (HP, 2010). 13 2. 2 Feasibility Compared to paying 1. Lion USED, gaining market share by market penetration strategy is completely under HP”s financial capability because the company would have to change neither resources nor technology (Insofar, 2007). The amount of money, HP has to invest for this strategy including promotion campaign in US and overseas is only one pieces of that 1. 2 billion USED figure. Therefore, it can be considered the feasibility level of this strategy is high. 2. 3 Acceptability A market penetration marketing strategy is very much about “business as usual” (Tutor, 2010), so the investors, particularly the shareholder eight not feel satisfied with the expected return.

However put in comparison with the acquisition strategy of HP, this strategy is considered be at the lower level of risk because the business is focusing on markets and products its stakeholders know the best. Hence, it also guarantees for the dividend of the shareholder without worry of loss. Question 5: Identify the key external and internal stakeholders of HP (5 marks) . Discuss the ways in which the power of the key stakeholders might influence the implementation of Hap’s acquisition strategy (10 marks) 5.

Key internal and external stakeholders Cameron, Crawler et al. 2010) defined a process for ranking stakeholders based on needs and the relative importance of stakeholders to others in the network 14 One of the key stakeholders of HP is shareholders. They have the right to vote for acquiring Palm or not, and they have high relation with the interest of taking over Palm. Before and after acquiring Palm, HP has to spend a lot of cash for acquiring and also developing the new business. And this money is come from investors or shareholders.

One more reason for shareholders becoming key stakeholders is that the main expectation of shareholders is to get high returns on their investment. If the company spends money for investment this results in higher expenditures in the course of the fiscal year. Thus, the net income attributable is reduced. However, in the long run, the investment might result in higher returns. As we can see in the graph above, the government and other regulatory institutions have a very high power and interest in the company.

Especially the European Union is increasingly scrutinizing monopolies, trusts and dominant market players. In case of acquisition, customers do not play a clear role, however, after that, they are having a strong relation to the revenue of the many 15 Task B 1 . My leadership development In the first leadership style survey I scored around 30 points in the 3 tasks, 32 for the democratic 30 points in the ones assessing the delegating style and the Autocratic leadership scored least with 29 points. This result showed my true personality, a democratic people.

When doing presentation, I always try to include every one in my group and ask them for the ideas, plans and projects. After completed the second leadership style survey, the result showed that I prefer relationship rather than task. A little bit hanged compares to the first one, I am focusing on organizing, supporting and developing the team. I am competent in my role and inspire others by unlocking their potential. I allocate roles based on a person “s strength and individual skills. Am people orientation, it might be because of I am Vietnamese with East Asia culture.

Most of members in my group are Chinese and Vietnamese, we share the same culture and also quite same leadership style, and sometimes, things gone wrong as the decision making process often took too long as we too depend on the others thinking. Therefore I sometimes had to change to the authoritarian Tyler and high task orientation in order to draw the attention to the final outcome (Morehouse, 2010). 2. A differences leadership styles As mention above, sometime I have change my leadership style to authoritarian; this style is also described as autocratic.

It is often considered a classic leadership style and is used when a leader wishes to retain as much power as possible and maintain control over the decision making process. It involves the leader telling the team members what they must do without any form of consultation or negotiation. Team members are expected to obey orders without receiving any explanation. Generally, this approach is not considered to be the most appropriate way to get the best response from a team in ordinary working life, but it has distinct advantages in situations where there is great urgency and 16 pressure to achieve, such as the armed forces.

Autocratic leaders may rely on threats or intimidation to ensure that followers conform to what the leader requires. In addition, this approach could devalue team members by ignoring their expertise and input and discouraging demonstrations of initiative. 3. Comparison and evaluation As far as the problem of same culture in my group s concerned above, according to Scooter (2009), effective leaders need to be aware of cultural differences. To keep the work environment being comfortable for everyone in group, participative style is preferred.