Harvard Case - Hewlett-Packard (A)
"Hewlett-Packard (A)" Harvard business case study is written by Rohit Deshpande, Seth Schulman. It deals with the challenges in the field of Marketing. The case study is 16 page(s) long and it was first published on : Feb 25, 2005
At Fern Fort University, we recommend that Hewlett-Packard (HP) implement a comprehensive strategy to revitalize its brand image, enhance its product portfolio, and leverage its expertise in technology and analytics to capture new market opportunities. This strategy will involve a multi-pronged approach encompassing brand repositioning, product innovation, strategic partnerships, digital marketing, and global expansion.
2. Background
The case study focuses on Hewlett-Packard (HP) in 1999, facing challenges in maintaining its market leadership amidst a changing technological landscape and fierce competition. The company's core businesses, computing and imaging, were experiencing declining market share and profitability. This was driven by factors like the rise of personal computers, the emergence of new competitors, and the increasing commoditization of its products. The case highlights the need for HP to adapt its strategy to address these challenges and ensure future growth.
The main protagonists in the case study are Carly Fiorina, CEO of HP, and the company's executive team, who are tasked with developing a strategic plan to revitalize the company.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Strong brand recognition and reputation
- Extensive research and development capabilities
- Global reach and distribution network
- Expertise in technology and analytics
Weaknesses:
- Declining market share in key segments
- Commoditization of products
- Complex organizational structure
- Slow innovation cycle
Opportunities:
- Growing demand for mobile computing and cloud services
- Emerging markets offering significant growth potential
- Advancements in AI and machine learning
- Increasing focus on sustainability and corporate social responsibility
Threats:
- Intense competition from established players and new entrants
- Rapid technological advancements
- Economic uncertainty and global instability
- Shifting consumer preferences and buying habits
Porter's Five Forces Analysis:
- Threat of new entrants: High, due to low barriers to entry in certain segments
- Bargaining power of buyers: High, due to the availability of substitutes and price sensitivity
- Bargaining power of suppliers: Moderate, as HP relies on a diverse range of suppliers
- Threat of substitute products: High, due to the rapid pace of technological innovation
- Rivalry among existing competitors: High, with intense competition from established players like Dell, IBM, and Compaq
Product Lifecycle Management:
HP's core products, such as personal computers and printers, were nearing the maturity stage of their life cycle, facing declining sales and profitability. This highlighted the need for HP to invest in product innovation and develop new offerings to capture emerging market opportunities.
Value Proposition Development:
HP needed to redefine its value proposition to differentiate itself from competitors and appeal to a wider range of customers. This could involve focusing on value-added services, such as consulting, support, and software solutions, alongside its hardware offerings.
4. Recommendations
1. Brand Repositioning:
- Redefine brand identity: Emphasize HP's expertise in technology and analytics, focusing on innovation, reliability, and customer-centric solutions.
- Develop a clear brand message: Communicate HP's value proposition effectively through targeted messaging and consistent brand experience across all touchpoints.
- Engage in strategic brand management: Implement a comprehensive brand management program to ensure brand consistency and protect brand equity.
2. Product Innovation:
- Invest in R&D: Prioritize research and development of new products and technologies, particularly in areas like mobile computing, cloud services, and AI.
- Develop a product roadmap: Define a clear product roadmap aligned with market trends and customer needs, ensuring a steady stream of new and innovative offerings.
- Embrace disruptive innovation: Explore new business models and technologies that could disrupt existing markets and create new growth opportunities.
3. Strategic Partnerships:
- Form strategic alliances: Collaborate with technology companies, software developers, and service providers to expand product offerings and reach new markets.
- Leverage open innovation: Engage with external partners to access new ideas, technologies, and expertise, accelerating innovation and product development.
- Build a strong ecosystem: Create a network of partners and customers around HP's products and services, fostering collaboration and value creation.
4. Digital Marketing:
- Develop a comprehensive digital marketing strategy: Utilize a multi-channel approach, including search engine optimization (SEO), social media marketing, content marketing, and email marketing.
- Invest in data-driven marketing: Leverage analytics and insights to optimize marketing campaigns, personalize customer experiences, and drive conversions.
- Embrace emerging digital channels: Explore new digital channels like mobile marketing, influencer marketing, and video marketing to reach target audiences effectively.
5. Global Expansion:
- Identify and target emerging markets: Explore growth opportunities in high-potential markets like China, India, and Brazil.
- Adapt products and marketing strategies: Tailor products and marketing campaigns to meet the specific needs and preferences of different regions.
- Build local partnerships: Collaborate with local businesses and distributors to establish a strong presence in new markets.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of HP's strengths, weaknesses, opportunities, and threats, considering:
- Core competencies and consistency with mission: The recommendations align with HP's core competencies in technology and analytics and its mission to deliver innovative solutions to customers.
- External customers and internal clients: The recommendations focus on meeting the needs of both external customers and internal clients, enhancing customer experience and employee satisfaction.
- Competitors: The recommendations aim to differentiate HP from competitors by leveraging its strengths, addressing its weaknesses, and capitalizing on emerging market opportunities.
- Attractiveness ' quantitative measures: The recommendations are expected to improve HP's financial performance by increasing market share, improving profitability, and driving revenue growth.
6. Conclusion
By implementing these recommendations, HP can revitalize its brand image, enhance its product portfolio, and leverage its expertise in technology and analytics to capture new market opportunities. This will enable the company to regain its market leadership and achieve sustainable growth in the long term.
7. Discussion
Alternatives:
- Mergers and acquisitions: Acquiring smaller companies with innovative technologies or strong market positions could provide HP with a quick way to expand its product portfolio and market reach.
- Cost reduction: Focusing on cost reduction and efficiency improvements could help HP improve profitability in the short term.
Risks:
- Execution risk: Implementing these recommendations effectively requires strong leadership, clear communication, and effective execution.
- Market risk: The recommendations are based on certain assumptions about market trends and customer behavior, which may not materialize as expected.
- Technological risk: Rapid technological advancements could render some of the recommendations obsolete.
Key Assumptions:
- HP will invest the necessary resources to implement these recommendations.
- The market will respond positively to HP's revitalized brand image and innovative products.
- HP will be able to adapt its operations and culture to support its new strategic direction.
8. Next Steps
- Develop a detailed implementation plan: Outline specific actions, timelines, and resources required to implement each recommendation.
- Communicate the strategy to stakeholders: Ensure transparency and alignment among employees, partners, and investors.
- Monitor progress and adjust as needed: Regularly track key performance indicators (KPIs) and make adjustments to the strategy based on performance and market feedback.
By taking these steps, HP can successfully navigate the challenges of the changing technological landscape and achieve sustainable growth in the years to come.
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Case Description
Since its controversial merger with Compaq, Hewlett-Packard had been under pressure by analysts and some stockholders to divest itself of its low-margin PC business. For CEO Carly Fiorina and others on HP's management team, however, PCs seemed integral to the company's broader strategy of becoming more customer focused. In May 2004, with HP's stock substantially undervalued, Mike Winkler, HP's chief marketing officer, was asked to weigh in on the company's PC strategy going forward. Could HP serve its customers better with PCs or without them? And if HP stayed in PCs, how should the company price them?
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