University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Hewlett Packard (HP) company expert project
Hewlett-Packard Company is an American multinational corporation focusing on information technology. It is headquartered in USA, California, Palo Alto. HP is among the world’s largest organization and operates virtually in every country of the world. The company focuses on the development and manufacturing of computing, networking, and data storage hardware. The company products include enterprise servers, personal computing devices, related storage devices, and a wide range of printers plus other imaging products. The company sells its products to households, small, medium and large-scale business entities, and other users (Packard, Kirby and Lewis, 2006).
Wired Magazine identifies HP as the first producer of marketed and mass produced personal computers (House and Lewis, 2009). The Hewlett-Packard 9100A was produced in 1969, coming as the first scientific calculator. The company is credited with producing the world’s first scientific electronic calculator in the year 1972. This only captures a segment of the many electronics the company pioneered in their production. This presents the company as revolutionary as it focuses on the production of new efficient products into the world.
Dave Packard and Bill Hewlett founded the HP Company in the year 1993. At the time of conceiving the idea, the two were students at the Stanford University. The Company’s first product, an audio oscillator for testing sound was built in Palo Alto garage. Walt Disney Studios was among the company’s first customers as reflected by the purchase of eight oscillators, which went into use in the testing of the sound system in the production of the movie Fantasia (House and Lewis, 2009).
The HP Company is among the few business entities in the world, which successfully married computing measurement technologies, and communication (House and Lewis, 2009). The company continues to make progress in portable computing, entry into home computing, and imaging and printing solutions. For the latter part of the past decade, the HP Company enjoyed twenty percent growth rates on yearly rates (House and Lewis, 2009).
In the 1990’s Lew Plant replaced the retiring John Young. The leadership change continued to see the growth path charted by the company go on. It is at this time that the HP Company gets recognition as a company, which values its workers as it offers a balance on work-life, diversity, and community involvement is struck. This is the major reason behind the huge attraction the company has on both current and potential employees. At the turn of the century, HP formed Agilent Technologies. At the same time, it brought on board Carleton (Carly) Fiorina as the new CEO. Carleton Fiorina primarily focused on reinvesting for growth and leadership (Packard, Kirby and Lewis, 2006).
The major changes in the company rest on the part of a spin-off of its business to Agilent Technologies in the year 1999. In the year 2002, HP merged with Compaq. In 2008, HP acquired EDS, which saw an increased revenue up to 118 billion US dollars. HP, in November 2009, acquired 3Com. In April the subsequent year, HP paid one billion two hundred million US dollars towards the purchase of Palm. As at May 2010, the acquisition of Palm had been finalized (House and Lewis, 2009).
The business environment of the HP Company just as in any other environment is characterized by competition (Packard, Kirby and Lewis, 2006). This offers a partial explanation as to why the company has focused on the acquisition strategy. The presence of other competitors like Toshiba, Acer, Dell, etc imply that the company’s position in the market is threatened, as a result, it has to engage in measures aimed at improving or retaining its market share.
The growing population and demand for electronic goods on the other hand, presents opportunities for the HP Company (Packard, Kirby and Lewis, 2006). Through the acquisition strategy, the company has spread its presence across the globe and thus has the opportunity of studying the different markets’ preferences. This forms the basis upon which HP should embark on producing market specific products. This should ensure an improved market share and a check on its competitors. Overall, the company does not appear to have taken dramatic changes to counter emerging threats.
Brand positioning and differentiation
At the acquisition time, Compaq was the low-end dominant computer vendor (Collins, 2009). Its brand had become premium in both business and home use. On the other hand, HP enjoyed the repute of producing the best instruments in the computing market. After bringing these two brands under one leadership, there was a challenge of harmonizing them into one. HP did not have the option of jettisoning Compaq owing to its valuable brand. At the sale instance, it was difficult marketing the two lines for the same product (Collins, 2009). The result due to this is reflected on the HP website, which reveals a feeble brand differentiation between the two. It remains difficult for an average customer to differentiate the two.
The acquisition strategy seems to be the major growth approach employed y the company. The acquisition of several businesses in various parts of the world indicates the place of the strategy in the company’s developmental agenda. This strategy is useful as it underlies a variety of benefits attributable to it (Collins, 2009). The acquisition strategy is not unique to the HP Company as its major competitors as IBM employs the same approach. During the stewardship of Carly, HP went head to head with IBM concerning the acquisition of PricewaterhouseCoopers Consulting wing. The acquisition price ballooned prompting a withdrawal by HP. Later IBM completed the acquisition (Collins, 2009).
The presence of a number of competitors in the computing industry seems to be the major reason why the company chose to employ the acquisition strategy (Dong, 2009). With competitors like Dell, IBM, etc, the company is under no illusions. It must work out means of remaining ahead or at the minimum, getting close to these companies. Towards the pursuit to maintain and increase on its market share, HP had to adopt the acquisition strategy to compete effectively.
Success is a function of several factors and as a result, it is difficult to pinpoint a specific one for success (Russ, 2002). The major strategy employed by HP is the acquisition method. It is only once that the company had faltered in making an acquisition deal go though albeit on the basis of this paper. This was after the ballooning of the price on the PricewaterhouseCoopers making HP to baulk. Based on the fact that IBM paid a fraction of what HP was being asked to remit, then the execution of HP is plausible on this instance. However, based on the disadvantage of allowing your top competitor make the acquisition, it does not augur well for HP.
However, this is only an instance, which happened during the rein of the disgraced Carly Fiorina. Given the company had achieved tremendous success before Carly Fiorina’s appointment, and it seems to be doing fairly well after her exit, the company strategy must have played a significant roe in the development of the company. However, a strategy alone is not good enough; its execution is equally important. On this evidence, it is held that the success of HP heavily rested on its strategy just as it did rest on its execution.
Technology is a rapidly changing area of business (Collins, 2009). The company thus needs to be responsive to these changes. Towards this end, the company needs to alter its products if it is to compete. The presence of other giant industry players makes it difficult for the company to lag behind in terms of adopting newest technology in its product manufacturing. Competition is healthy especially to the consumers; however, this poses a serious threat to the company, as it must check this or face declining sales.
From the beginning, Packard and Hewlett developed a leadership style never practiced before. They coined a corporate culture known as ‘the HP way’. The culture renounced the ‘hire and fire’ mentality. This is reflected by the defying of temptations to lay off workers despite the1974 US economic crisis. The two owners also underscored the need to promote own motivation at the workplace. The company was run like a family. The profit sharing approach underscores this focus. Further to this, employees were extended several benefits, which meant that HP was the perfect and unique employer (Buhler, 2003).
In 1950, Bill and Dave chose to write down the company objectives to serve as guidelines in reference to all decision-making in the company, this was aimed at keeping pace with the growth the company had achieved by this time. The objectives covered citizenship, management, the growth people, customers, and profits. Towards achieving the goal, team-wok was proposed (Collins, 2009).
Based on section of workers, HP was premised on religion when referring to the company philosophy. The company was viewed as inviolable. The management philosophy was founded on teamwork, respect for individuals, innovation, integrity, and contribution to society. This explains why the company gained a lot of respect both from its workers and from members of society. The founding fathers; Dave Packard and Bill Hewlett are credited with the introduction of this legendary leadership style into the company (Dong, 2009).
The hiring of Carly Fiorina from outside the company ranks coming after the merger with Compaq seems to have brought changes hitherto un-witnessed. Carly Fiorina was accused of carelessly handling workers issues especially on lay-offs.in the lay-off exercises, Carly Fiorina factored in on profits with little regard on the welfare of the workers. At the same time, Carly Fiorina is accused of introducing the element of personality cult into the organization. It is during the reign of Carly Fiorina that employees began complaining about fear. The CEO’s reign was further characterized by proxy wars. Retirees also complained about ignored views and total disregard of contributions. This presented a big departure from the initial cultures as set by the two owners (Dong, 2009).
Rather than firing, employees were reassigned duties. Employees were allowed up to six months to find their desired positions. If one failed to locate a working position, s/he was allowed to quit as opposed to being fired. This was during the good old days. The management interacted freely with the workers to facilitate sharing of information. Both Hewlett and Packard took time to talk to staff at various HP points (Dong, 2009). The focus was on creating a loyal workforce.
Fiorina is accused of turning the company fortunes to a lower scale (Dong, 2009). This is reflected in the way in which employees were laid off. Further to this, Fiorina made comments intended to belittle Walter Hewlett, her merger opponent, this indicates a departure from the original HP way.
The dramatic change in the culture of the environment was occasioned due to the changing environment in characterizing the industry (Walton, 2002). This would enable the company gauge competition and remain in business though its position as a credible employer could loose credibility. However, the extent to which culture affects the organization has weathered over time. Unlike in the past, organizational structure seems to be in control as opposed to the cultural aspect. The fact that the organizational set up has managed to change its focus from cultural attributes of the company serves to augment this position.