Harvard Case - Hewlett-Packard--Computer Systems Organization: Selling to Enterprise Customers
"Hewlett-Packard--Computer Systems Organization: Selling to Enterprise Customers" Harvard business case study is written by Das Narayandas, Robert C. Dudley. It deals with the challenges in the field of Marketing. The case study is 19 page(s) long and it was first published on : Mar 29, 2000
At Fern Fort University, we recommend that Hewlett-Packard (HP) implement a comprehensive strategy to effectively target and sell to enterprise customers. This strategy should focus on building strong customer relationships, leveraging HP's strengths in technology and innovation, and adapting to the evolving needs of the enterprise market.
2. Background
This case study focuses on HP's Computer Systems Organization (CSO) and its struggle to effectively sell to enterprise customers. The CSO, responsible for selling HP's high-end computer systems, faced challenges in understanding the unique needs of large corporations and adapting its sales approach to match. The case highlights the complexities of selling to enterprise customers, where long sales cycles, multiple stakeholders, and stringent technical requirements are prevalent.
The main protagonists of the case study are:
- John Young: HP's CEO, who recognized the need for a more focused strategy for enterprise customers.
- John Doyle: The CSO's general manager, who was tasked with developing a successful strategy for the enterprise market.
- The CSO Sales Team: The team responsible for selling HP's computer systems to large corporations.
3. Analysis of the Case Study
We can analyze this case study through the lens of several frameworks:
1. SWOT Analysis:
- Strengths: HP's strong brand reputation, technological expertise, and established customer base.
- Weaknesses: Lack of a focused strategy for enterprise customers, inconsistent sales approach, and limited understanding of customer needs.
- Opportunities: Growing demand for enterprise computing solutions, increasing adoption of cloud computing, and the potential to leverage HP's existing customer relationships.
- Threats: Intense competition from other technology giants, evolving customer expectations, and the rapid pace of technological advancements.
2. Porter's Five Forces:
- Threat of new entrants: High, due to the low barriers to entry in the technology industry.
- Bargaining power of buyers: High, as enterprise customers have significant purchasing power and can easily switch vendors.
- Bargaining power of suppliers: Moderate, as HP relies on a network of suppliers for components and manufacturing.
- Threat of substitute products: High, as alternative computing solutions are readily available.
- Competitive rivalry: High, as the market is dominated by several major players, each vying for market share.
3. Customer Segmentation and Targeting:
HP needs to segment its enterprise customer base based on factors like industry, size, IT infrastructure, and technology adoption rate. This segmentation will allow HP to develop targeted marketing and sales strategies for specific customer groups.
4. Brand Positioning:
HP needs to clearly position its brand as a reliable and innovative provider of enterprise computing solutions. This positioning should highlight HP's strengths in technology, security, and customer support.
5. Marketing Mix (4Ps):
- Product: HP needs to develop a comprehensive portfolio of enterprise computing solutions that meet the specific needs of different customer segments.
- Price: HP needs to adopt a competitive pricing strategy that balances profitability with customer value.
- Place: HP needs to establish effective distribution channels to reach its target market, including direct sales, channel partners, and online platforms.
- Promotion: HP needs to develop a multi-channel marketing strategy that includes advertising, public relations, content marketing, and social media.
4. Recommendations
To address the challenges outlined in the case study, HP should implement the following recommendations:
1. Develop a Focused Enterprise Strategy:
- Define Target Markets: Identify specific industry verticals and customer segments that HP can effectively target.
- Develop Value Propositions: Create tailored value propositions for each target market, highlighting HP's unique strengths and benefits.
- Build Customer Relationships: Focus on building strong relationships with key decision-makers and influencers within enterprise organizations.
2. Enhance Sales Capabilities:
- Train Sales Teams: Provide sales teams with comprehensive training on enterprise customer needs, technology solutions, and sales techniques.
- Develop Sales Tools: Equip sales teams with tools and resources that support their efforts, such as customer relationship management (CRM) systems and sales enablement platforms.
- Implement Account Management: Establish a dedicated account management program for key enterprise customers, ensuring consistent communication and support.
3. Leverage Technology and Innovation:
- Invest in R&D: Continuously invest in research and development to deliver cutting-edge computing solutions that meet the evolving needs of enterprise customers.
- Embrace Cloud Computing: Develop and offer cloud-based solutions that provide flexibility, scalability, and cost-effectiveness for enterprise customers.
- Integrate AI and Machine Learning: Leverage AI and machine learning to enhance customer experience, optimize operations, and drive innovation.
4. Strengthen Marketing Efforts:
- Develop Targeted Marketing Campaigns: Create marketing campaigns that resonate with specific customer segments and highlight HP's value propositions.
- Utilize Digital Marketing Channels: Leverage digital marketing channels like search engine optimization (SEO), social media, and content marketing to reach target audiences.
- Build Brand Awareness: Invest in branding initiatives to strengthen HP's reputation as a leading provider of enterprise computing solutions.
5. Foster a Culture of Collaboration:
- Promote Cross-Functional Collaboration: Encourage collaboration between sales, marketing, engineering, and other departments to ensure a unified approach to serving enterprise customers.
- Empower Employees: Empower employees to take ownership of their roles and contribute to the success of HP's enterprise strategy.
- Create a Culture of Innovation: Foster a culture that encourages creativity, experimentation, and continuous improvement.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with HP's core competencies in technology, innovation, and customer service, and support its mission to deliver value to customers.
- External Customers and Internal Clients: The recommendations address the specific needs of enterprise customers and internal clients, including sales teams, marketing professionals, and product developers.
- Competitors: The recommendations consider the competitive landscape and aim to differentiate HP from its competitors by focusing on customer relationships, technology innovation, and value-driven solutions.
- Attractiveness - Quantitative Measures: The recommendations have the potential to increase HP's market share, revenue, and profitability in the enterprise market.
6. Conclusion
By implementing these recommendations, HP can effectively target and sell to enterprise customers, achieving sustainable growth and success in this critical market segment. The key to success lies in developing a comprehensive strategy that focuses on customer needs, leveraging HP's strengths, and adapting to the evolving demands of the enterprise market.
7. Discussion
Other alternatives not selected include:
- Focusing solely on existing customer relationships: This approach may limit HP's growth potential, as it fails to address the needs of new and emerging customers.
- Adopting a low-cost pricing strategy: This strategy may compromise profitability and limit HP's ability to invest in research and development.
- Ignoring the threat of cloud computing: This approach would put HP at a disadvantage in the rapidly evolving technology landscape.
The risks associated with these recommendations include:
- Insufficient investment in technology and innovation: This could lead to HP falling behind its competitors.
- Failure to adapt to changing customer needs: This could result in declining market share and revenue.
- Lack of effective execution: This could hinder the implementation of the recommended strategy.
8. Next Steps
To implement these recommendations, HP should take the following steps:
- Develop a detailed implementation plan: This plan should outline the specific actions, timelines, and resources required to execute the strategy.
- Establish key performance indicators (KPIs): These KPIs should measure the success of the strategy in terms of market share, revenue, customer satisfaction, and profitability.
- Monitor progress and make adjustments: HP should regularly monitor the progress of its strategy and make adjustments as needed to ensure its effectiveness.
By taking these steps, HP can effectively navigate the complexities of the enterprise market and achieve its ambitious goals for growth and success.
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Case Description
In late 1996, Manuel Diaz, head of Worldwide Sales for Hewlett-Packard's (HP) Computer Systems Organization (CSO), is reviewing the results of an audit of HP's enterprise customer management approach with the objective of identifying market and organizational opportunities that might provide HP the next wave of growth while further reducing sales and support costs. HP's current customer management approach, although successful, had involved structural changes that had forced a deep-rooted overhaul of HP's traditional regional sales approach. The new recommendations would necessitate another round of drastic changes in the way HP manages relationships with its large enterprise customers. Diaz does not want to put the sales organization through another round of changes unless he is sure they are necessary. He has to figure out if the organization is ready for more change, and whether the benefits outweigh the costs of implementation. The case provides a detailed review of the audit process and the findings.
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