Introduction
Hewlett-Packard (HP) is among the world’s largest manufacturers of digital solutions and computer hardware. The company’s corporate philosophy lies in promoting and maintaining continuous sustainable technological progress with an emphasis on internal and external cooperation (About us, n. d.). Through many years of its successful operations and increasing market presence the company has gained solid ground in the industry. However, after a long period of stable growth, the last decade has introduced a declining trend to the company’s net revenue (Alsop, 2022a). It is likely a result of other major competitors entering the market and the company’s inability to comply with the rising demand for cutting-edge technological solutions. Therefore, it is essential for Hewlett-Packard leadership to adequately assess and develop their strengths while addressing their weaknesses to stay competitive in the modern technological market environment.
SWOT Analysis
Strengths and Opportunities
One of HP’s main strong sides is its solid brand image. Hewlett-Packard is a well-known brand that has been in the market for over 80 years, recognized globally for its high-quality products and services (About us, n. d.).
The company offers a wide range of products and services, including personal computers, laptops, printers, and other hardware. It has also ensured the company’s global presence, allowing HP to operate in more than 170 countries worldwide. (Anand, 2020). This firm ground gives the company possibilities and resources to invest in further innovation and research to expand its product range.
Weaknesses and Threats
However, the company’s heavy reliance on PC sales has made it vulnerable to changes in the market (Kaur, 2023). The declining demand for PCs has impacted HP’s revenue and profits negatively. The company’s limited presence in the mobile device market has made it difficult for it to compete with other players. HP also depends on a few suppliers for critical components, which makes it vulnerable to supply chain disruptions (HP Supplier List, 2021). Coupled with the company’s complex organizational structure, this can hinder its ability to respond to market changes quickly (Executive leadership, n. d.). HP has also faced some reputation issues in the past, including scandals related to corporate governance and unethical practices (Brown et al., 2019).
SWOT Analysis Strategy
The company can capitalize on its diversified portfolio to serve different customer segments and reduce the impact of market fluctuations. A focus on innovation and heavy investment in research and development could help the company develop innovative products that meet customers’ changing needs and provide a strong financial foundation for its expansion plans. This would include expanding its product range to other areas and products such as mobile technology and data services. The company’s global presence also enables the company to serve customers in different regions and take advantage of local opportunities. Considering HP’s established position as a reputable leader in computer hardware manufacturing, shifting this part of its product range into regions with insufficient supply can increase the company’s revenue in these new markets. At the same time, expanding to data services can facilitate the company’s growth toward modern high-tech applications in developed businesses worldwide.
An opportunity for HP to minimize threats lies in expanding its product range to other areas and products, including mobile technology and data services. The mobile market is a significant growth area in the technology industry. Expanding into it can allow the company to diversify its product line, move to new markets, and increase its competitiveness among other large players. Furthermore, informational technologies including data storage, neural networks, artificial intelligence, and blockchain are currently on the rise presenting a lucrative window of opportunities for expansion. The company would also benefit from promoting and supporting diversity and inclusivity inside the company. This would help to to attract more professional employees to improve operational efficiency, and productivity, reduce costs, and potentially improve HP’s media image.
In the face of the challenges presented by the modern technological market and the company’s revenue struggle, it is vital for HP to maximize its competitiveness and increase its profitability. The company can maximize its competitiveness in several ways, including the pursuit of innovations, product line diversification, and strategic partnership. The growing business interest in artificial intelligence and data science technologies presents opportunities for diversification (Akerkar, 2019). Therefore, HP should invest in research and development of new products and solutions that would satisfy the current customer needs and give it a competitive edge. This would require the development of a new corporate-level strategy for an efficient reallocation of resources.
A new business-level strategy to improve the company’s competitiveness should revolve around building efficient strategic alliances with other technological businesses. Combining portions of their resources can allow companies with similar goals to develop and employ an effective strategy that would ensure mutual profit and create a competitive advantage for all parties involved in the alliance (Hitt et al., 2019).
Profitability Strategy
Partnering with companies like IBM that have shifted from hardware manufacturing to data science can close the gaps in both companies’ production lines and improve their efficiency. This would also present opportunities for an increase in HP’s profitability through an expansion to a broader customer range. This strategy would also help implement cost-saving measures, such as reducing waste, streamlining operations, and outsourcing non-core functions, to further enhance profitability. Optimizing the number of personnel by focusing on creating a diverse team of highly qualified and motivated employees engaged in multitasking can facilitate cost reduction. Leaving essential functions for the core team and assigning side-projects including some stages of the manufacturing process to strategic partners can enhance the company’s flexibility. It would also contribute to a broader diversification of the product and service line.
Communication Plan
Communicating business strategies to stakeholders is critical for ensuring that everyone in the organization is aligned and working toward common goals. In the case of HP, the main stakeholders are the company’s customers who provide returns on the investments into new ventures and, therefore, ensure the company’s livelihood (Hitt et al., 2019). The new strategies can be effectively communicated through online advertisement and social media marketing. These areas are especially relevant and effective, considering the company’s target audience consists primarily of computer users and those engaged in informational technologies. Another efficient communication strategy would be integrating the general information on the product and service diversification into the company’s existing products. This strategy does not require significant additional spending for advertisement, utilizing existing products under a new angle.
The company’s leadership is another major stakeholder entity responsible for large-scale decisions vital for the strategies’ implementation. Presenting the relevant market research is an effective way to communicate the importance of implementing new development strategies including product diversification and strategic cooperation (O’Dwyer & Gilmore, 2018). Engaging in dialogue and feedback exchange can ensure mutual understanding of the potentially beneficial implications of the strategies for the company’s competitiveness and profitability. Considering the company’s strong emphasis on horizontal hierarchy and autonomous decision-making in different departments, this approach would provide a framework for an efficient discussion and additional strategy optimization. Comprehensive visual data representation and a concise narration are the essential elements of a persuasive communication strategy that would be required for this purpose.
Corporate Social Responsibility
One of the main ethical responsibilities of a modern business is the environmental sustainability of its production. HP has been promoting and pursuing sustainability by maintaining a relatively small but efficient list of reputable electronics suppliers such as Celestica, Flex, and Toshiba (HP supplier list, 2021). This collaboration has positively influenced the company’s financial state, providing an opportunity for slow, but steady profit growth even after a steep decline in net revenue after the 2015 transition (Alsop, 2022a; Anand, 2020). HP has also committed to strict anti-racist and pro-inclusivity policies, promoting and supporting diversity inside the company, in the industry, and internationally (Racial Equality and Social Justice, n.d).
Conclusion
In conclusion, this trend has resulted in a growing number of qualified employees corresponding to the increase in revenue up to 2011 (Alsop, 2022b). It has helped the company to remain economically competitive even after a large reduction in workforce.
References
HP. n. d.a. About Us. Web.
HP. n. d.b. Executive Leadership. Web.
HP. n. d.c. Racial Equality and Social Justice. Web.
HP. 2021. HP Supplier List. Web.
Meredith M. Brown, Ralph C. Ferrara, Paul S. Bird, Gary W. Kubek, and William D. Regner. 2019. Takeovers: A Strategic Guide to Mergers and Acquisitions 4th ed. Wolters Kluwer.
Michael A. Hitt. 2020. Strategic Management: Concepts and Cases: Competitiveness and Globalization 13th ed. Cengage Learning.
Michelle O’Dwyer, and Audrey Gilmore. 2018. Value and Alliance Capability and the Formation of Strategic Alliances in SMEs: The Impact of Customer Orientation and Resource. Web.
Rajendra Akerkar. 2019. Artificial Intelligence for Business. Springer.
Sarika Anand. 2020. Hewlett Packard: Growing After the Largest Split in Corporate History. Web.
Thomas Alsop. 2022a. Hewlett Packard Inc: Net Revenue 1998-2021. Web.
Thomas Alsop. 2022b. HP Inc. Number of Employees Worldwide 2001-2021. Web.