1hewlett packard presentation

Hewlett Packard

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Presented by:01 Hassan Sajjad 062116

02 Muhammad Faisal 06315626 Muhammad Ali Qureshi 081126

33 Imran Ali 081502 36 Shahbaz Noshahi 081434

Presented To: Mr. Aly Raza SyedCourse Name: Business PolicyDate: 19-10-2009Group NO: 4

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Introduction Industry: Information Technology Case time: 2007 Key players: Bill Hewlett, Dave Packard &

Todd Brodley Initial Capital: $538 Important dates: 1938, 1939, 1940, 1950,

1957 Operations: USA, Europe, China, India,

Russia, Japan Market Share: 12.3% in 2007

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Mission Statement

“”

Vision

“”

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Main Goals

“Selling and marketing its products and services through programs designed to improve profit margins.”

Situation Analysis

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Macro Environment AnalysisDemographic:

Economic:HP and other brand name companies are reducing

the selling price of their ink cartridges.

Political:

Legal:

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Informational: HP provides information technology services.

Social:

Technologic:HP has huge technology research laboratory in

Banglore.

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Macro Environment Analysis

Porter’s Five Forces Model

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Bargaining power of suppliers

Potential development of substitute products

Bargaining power of consumers

Potential entry of new competitors

Rivalry among competing firms

+

_N/A

+

Equal number of negatives and positives make the industry moderate.

(-)

Strategic OrientationCorporate Level:

GLOBAL EXPANSIONBusiness Level:

RELATED DIVERSIFICATIONFunctional Level

DISTRIBUTION

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Segmentation

HP has various segments:

Technology solution group (TSG)Personal system group (PSG)Imaging and printing group (IPG)

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Target Market

.INSTITUTIONS.INDIVIDUALS.BUSINESS CUSTOMER

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Marketing Mix

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Products

Important P’s

Price:N/A

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Important P’sPromotion:

o HP promotes directly to consumers, businesses and through a variety of business partners

o Direct sales campaign

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Important P’s

Place (Distribution Channel):Retail stores ConsumersResellers Small to Mid-size Business

Distribution Partners Value Added Reseller(Independent Software Vendors, Corporate Investment) Business and Institution

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Important P’s

People:N/A

Process:N/A

Physical Evidence:Retailers, resellers, distribution partners, independent distributors, etc

Life Cycles (PLC,CLC,ILC)

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I T (ILC)

HP (CLC)

HP (PLC)

1 2 3 4

Key Success Factors

There is potential in the industry.As knowledge management evolves from fad

to business imperative, many organizations are discovering the limited ability of information technology to capture and share ideas, insights, and know-how.

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Unique Selling Preposition

N/A

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External Factor Evaluation Matrix Analysis

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External Factor Evaluation Matrix

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Factors Weight Rating Score

Opportunities

Emerging markets, particularly BRIC countries 0.173

0..51

Imaging and printing businesses 0.15 4 060

e-Commerce expansion .15 3 0.45

Diversification Related/Unrelated 0.10 3 0.30

Threats

Apple computers (Macs) significant growth in overall PC shipments 0.12 3 0.36

Dell direct-sale marketing 0.11 3 0..33

Intense competition from other PC manufacturers 0.10 2 0.20

Slowdown in economic conditions in US, Europe 0.10 3 0.30

Total 1.00 3..05

Internal Factor Evaluation Matrix

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Key Factors Weight Rating Score

STRENGTHS

Strong brand equity world’ largest it firm. 0.12 3 0.36

World’s biggest computer hardware and peripherals company in the world.

010 4 0.40

An advantage HP has over its competition it is a total solutions provider.

0.09 3 0.27

Diversified product portfolio 0.10 3 0.30

Solid market position in key segments. 0.08 3 0.24

Strong financial Position. 0.12 4 0.48

The company has a long history of inventions and innovations until it came to this stage

0.10 4 0.40

Product diversity of the company is another big advantage that enables the company to hold its

position even in the times of recession.

0.07 3 0.21

WEAKNESS 0.36

Price is high in China as compared to other 0.12 3 0.20

Product line management problems 0.10 2

Total 1.00 3.22

Competitive Profile Matrix

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hp dell IBMSuccess Factors Weight Rating Score Rating Score Rating Score

Quality 0.13 3 0.39 3 0.39 3 0.39

Financial Position 0.15 4 0.60 3 0.45 3 0.45

Market Share 0.16 3 0.48 3 0.39 3 0.48

Technology/innovation 0.12 3 0.36 3 0.36 4 0.48

Global Market 0.10 3 0.30 3 0.30 2 0.20

Price Competitiveness 0.10 2 0.20 4 0.40 2 0.20

R&D 0.14 3 0.42 3 0.42 4 0.56

Customer Loyalty 0..10 3 0.30 2 0.20 3 0.30

Total 1.00 3.53 2.84 3.06

SWOT AnalysisStrengths

Weaknesses

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Strong brand equity world’ largest it firm.World’s biggest computer hardware and peripherals company in the world.An advantage HP has over its competition it is a total solutions provider.Diversified product portfolioSolid market position in key segments.Strong financial Position.The company has a long history of inventions and innovations until it came to this stageProduct diversity of the company is another big advantage that enables the company to hold its position even in the times of recession.

Price is high in China as compared to other

Product line management problems

SWOT Analysis

Opportunities Threats

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Emerging markets, particularly BRIC countriesImaging and printing businesses e-Commerce expansion Diversification Related/Unrelated

Apple computers (Macs) significant growth in overall PC shipments Dell direct-sale marketing Intense competition from other PC manufacturers Slowdown in economic conditions in US, Europe

THE Space Matrix

.+6

-6

ES

+6-6+1-1

Aggressive

FS

ISCA+1

-1

BCG MATRIX

0.0.501.0

+20

0

-20

0.0

hp

IE Matrix

1 2 3

4 5 6

7 8 9

1.02.03.0

4.0Weak

AverageStrong

High

Medium

Low

1.0

2.0

3.0

IFE total Weighted Scores

EF

EW

ightedscores

3.223.02

Grand Strategy Matrix

Rapid Market Growth

Slow market Growth

Strong

Competitive

Position

Weak CompetitivePosition

Q1Q2

Q3 Q4

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QSPM Matrix StrategicAlternativeKey Factors Weight AS 1 TAS 1 AS 2 TAS 2

Opetunities:

Emerging markets, particularly BRIC countries 0.08 4 .36 3 .24

Imaging and printing businesses 0.07 3 .24 2 .14

Diversification Related/Unrelated 0.06 3 .21 2 .12

E-Commerce expansion .03 3 .09 3 .09

Threats:

Apple computers (Macs) significant growth in overall PC shipments 0.05 3 .15 3 .15

Dell direct-sale marketingIntense competition from other PC

manufacturers 0.05 3 .15 2 .1

Slowdown in economic conditions in US, Europe 0.04 3 .12 2 .08

STRENGTHS

Strong brand equity world’ largest it firm. 0.09 3 .27 3 .27

World’s biggest computer hardware and peripherals company in the world. 0.07 3 .27 2 .14

An advantage HP has over its competition it is a total solutions provider. 0.06 3 .18 2 .12

Solid market position in key segments. 0.08 3 .24 2 .16

Strong financial Position 0.10 4 .40 3 .30

The company has a long history of inventions and innovations until it came to this stage

0.07 3 .21 2 .14

Product diversity of the company is another big advantage that enables the company to hold its position even in the times of recession.

0.05 3 .15 2 .10

WEAKNESSIn Asia Other Competitor's prices are low

0.05 4 .20 4 .20

Product line management problems 0.05 3 .15 3 .15

Total 1.0 3.39 2.41

Market Analysis

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Important Figures

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SalesThe HP company sales are increasing in 2006 as compare to 2004.

Growth rateThe company growth rate is 12.3%.

Market Share

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HP announced that it is the worldwide market share leader in distributed system management software for 2004.

HP led the worldwide distributed system management software market category in 2004 with 13.3% revenue share. HP's revenue grew 14.9% in this market for 2004, outpacing the overall one-year growth of 8% for the category and nearly doubling the revenue growth of each of the next three closest competitors.

Competitor Analysis

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CompetitorsDemand is tied to consumer and business income.

The profitability of individual computer companies depends on purchasing and production efficiencies, and on technological expertise.

HP competitors are primarily in the Personal Computers industry. Hewlett-Packard also competes in the Computer Networking Equipment, Computer Peripherals, and Handheld Computers & Accessories sectors.

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ComparisonCompany Name

Revenue Number of employees

Gross margin

EBIT EPS Net income

HP 97.06B 156,000 24.46%

10.72B 2.295 6.39B

Canon 34.63B 118,499 49.74%

8.29B 2.92 3.88B

Dell N/A 65,200 N/A N/A N/A N/A

IBM 92.79B 366,486 42.33%

19.20B 6.262 9.55B

Industry 456.28M 1.74K 36.03%

17.29M N/A (218.03)K

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Financial Analysis

Ratio Analysis

Ratio 2005 2006 ResultCurrent ratio 1.37 1.34 moderateQuick ratio 1.15 1.13 moderate

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Ratio 2005 2006 Result

Debt-to-total-assets 0.45 0.46 moderate

Debt-to-equity 0.93 1.0051 negative

Long term-debt-to-equity 0.091 0.065 positive

Liquidity Ratios

Leverage Ratios

Ratio Analysis

Ratio 2005 2006 Result

Inventory turnover 12.60 11.82 negativeFixed asset turnover 2.55 2.71 Positive

Total asset turnover 1.12 1.11 Moderate

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Activity Ratios

Growth Ratios

Ratio 2005 2006 Result

Growth in sale 8.49% 5.72% NegativeGrowth in net income (31%) More than 100% positive

Ratio Analysis

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Ratio 2005 2006 Result

Gross profit margin 23.61% 24.52% PositiveOperating profit margin 4.00% 7.15% PositiveNet profit margin 2.76% 6.76% PositiveReturn on total assets 3.10% 7.56% Positive

Return on shareholders' equity0.06 0.16 positive

Profitability Ratios

Statement Analysis

Ratio 2004-05 2005-06 Result

Revenue 8.49% 5.72% negative

Cost of goods sold 9.30% 4.46% Positive

Gross profit 76% (0.78%) Negative

Operating Profit (17%) 88% Positive

Net income (31%) More than 100% PositiveNet income per share (28.69%) More than 100% positive

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Income Statement

Statement Analysis

Ratio 2005-06 Result

Current assets 11.37% Positive

Plant & equipment 6.83% Positive

Total assets 6.03% positive

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Ratio 2005-06 Result

Current liability 13.95% negative

Long-term debts (26.59%) Positive

Total liabilities 9.20% NegativeShareholders' equity 2.60% positive

Balance Sheet (Debit Side)

Balance Sheet (Credit Side)

Main Problems and Opportunities

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Main Opportunity

Demand increasing in the Asia Pacific (mainly in India and China)

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Sub Problems and Opportunities

Need for diversificationHigh pricesProduct line management problems

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Alternatives

Open a new manufacturing plant in Asia Pacific

Start new imports to Asia PacificStart selling old brands with decreased price in

the Asia Pacific

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Alternative One:Open a new manufacturing plant in Asia Pacific

Pros• Cheap labor• Low other manufacturing

costs• Low transportation cost• No import charges• Opportunity for R&D

expenses, because of low manufacturing cost

Cons• Heavy investment required

in start

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Alternative Two: Start new imports to Asia Pacific

Pros• Brands already familiar to

people

Cons• High transportation cost• High import charges• Customers are looking for

new technologies and new features, not exactly for older brands

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Alternative Three: Start selling old brands with decreased price in

the Asia PacificPros• Directly target Lenovo’s

fast-growing low-priced products

• Developing and/or poor areas of the region would be able to afford information technology products

Cons• No margin for R&D due to

low price of products• Refurbished products would

be unreliable, and would have a short life cycle, as customers want new technologies and new features

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Best Alternative

Open a new manufacturing plant in Asia Pacific, as we find that this alternative has maximum pros and minimum cons. In addition, due to the strong financial position of the company, it would be able to afford the high investment costs involved in this alternative.

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Implementation

HP will set its target to capture Asia Pacific market by moving along the following road map:

Start aggressive marketing in China and India by bringing all products with minimum possible price.

Start building manufacturing plan parallel with new marketing. Cost is approximated to be USD 500 Million.

Start exporting products from new production plant in other Asian countries, which will help in reducing exporting cost.

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Recommendations

HP is currently spending approximately 4% of their net revenues on R & D. We suggest that for related dive6rsification it should be increased to 10%.

When marketing any product to Asia, price should be very minimum or special offers should be introduced to attach the customers.

Hp should introduce new product line immediately for those lines which are suffering or have become uncertain.

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The End

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Thank you