Harvard Case - HP: The Computer is Personal Again
"HP: The Computer is Personal Again" Harvard business case study is written by Rajiv Lal, Catherine Ross. It deals with the challenges in the field of Marketing. The case study is 29 page(s) long and it was first published on : Feb 23, 2009
At Fern Fort University, we recommend HP adopt a multi-pronged strategy to revitalize its brand and reclaim its position as a leader in the personal computing market. This strategy will focus on:
- Redefining the Personal Computer: HP should leverage its strengths in innovation and technology to develop new product categories and form factors that cater to evolving consumer needs and redefine what a 'personal computer' can be.
- Targeted Marketing and Brand Revitalization: HP should implement a data-driven marketing approach that emphasizes personalized experiences, builds brand loyalty, and engages with specific target audiences through tailored messaging and digital channels.
- Strategic Partnerships and Acquisitions: HP should explore strategic partnerships and acquisitions to expand its reach, access new technologies, and bolster its product portfolio in areas like AI, cloud computing, and emerging markets.
2. Background
This case study focuses on HP's struggle to regain its position as a leader in the personal computing market. Despite its historical success, HP faced challenges from competitors like Apple and Lenovo, who had captured market share with innovative products and compelling marketing campaigns. The case highlights HP's attempts to address these challenges through product launches, marketing initiatives, and strategic partnerships.
The main protagonists are:
- Meg Whitman: HP's CEO, who spearheaded the company's efforts to restructure and regain market share.
- Dion Weisler: HP's CEO, who continued the company's transformation by focusing on innovation and customer experience.
- The HP Management Team: Responsible for developing and implementing HP's strategic plans and product initiatives.
3. Analysis of the Case Study
Strategic Framework: We will analyze HP's situation using a combination of the following frameworks:
- SWOT Analysis: To identify HP's internal strengths and weaknesses, and external opportunities and threats.
- Porter's Five Forces: To assess the competitive landscape and identify key industry forces.
- Product Lifecycle Management: To understand the current stage of the personal computing market and HP's position within it.
SWOT Analysis:
Strengths:
- Strong brand recognition and global reach.
- Expertise in manufacturing and product development.
- Extensive distribution network and partnerships.
- Focus on innovation and technology development.
Weaknesses:
- Perception of being a 'commodity' brand.
- Lack of a clear and compelling brand story.
- Limited focus on customer experience and personalization.
- Struggling to compete with Apple's design and innovation.
Opportunities:
- Growing demand for mobile and cloud computing.
- Emergence of new technologies like AI and VR.
- Expanding markets in emerging economies.
- Potential for strategic partnerships and acquisitions.
Threats:
- Intense competition from established players and start-ups.
- Rapid technological advancements and shifting consumer preferences.
- Economic uncertainty and global market volatility.
- Increasing pressure from low-cost manufacturers.
Porter's Five Forces:
- Threat of New Entrants: High, due to the low barriers to entry in the personal computing market.
- Bargaining Power of Buyers: High, as consumers have many choices and are price-sensitive.
- Bargaining Power of Suppliers: Moderate, with limited suppliers for key components, but also significant competition among suppliers.
- Threat of Substitute Products: High, with alternatives like tablets, smartphones, and cloud-based services.
- Rivalry Among Existing Competitors: Very high, with intense competition from established players like Apple, Lenovo, and Dell.
Product Lifecycle Management:
The personal computing market is in the maturity stage, with declining growth rates and fierce competition. HP needs to differentiate itself by focusing on innovation, customer experience, and targeted marketing to maintain its relevance in this evolving market.
4. Recommendations
1. Redefine the Personal Computer:
- Product Innovation: HP should invest in developing new product categories and form factors that cater to evolving consumer needs. This could include:
- Ultra-portable devices: Lightweight and powerful laptops and tablets designed for mobile professionals and students.
- AI-powered devices: PCs with integrated AI capabilities for personalized experiences and enhanced productivity.
- VR/AR-ready devices: PCs optimized for immersive experiences and virtual reality applications.
- Focus on Niche Markets: HP should target specific segments with tailored product offerings, such as:
- Gaming enthusiasts: High-performance PCs with specialized components and software.
- Content creators: Powerful workstations with advanced graphics processing capabilities.
- Healthcare professionals: Medical-grade devices with robust security and data protection features.
2. Targeted Marketing and Brand Revitalization:
- Data-Driven Marketing: HP should leverage data analytics to understand consumer behavior and preferences, and tailor its marketing campaigns accordingly.
- Personalized Experiences: HP should create personalized experiences for customers across all touchpoints, from online interactions to in-store visits.
- Content Marketing: HP should develop engaging content that educates and entertains consumers, showcasing the value and benefits of its products.
- Social Media Engagement: HP should actively engage with consumers on social media platforms, building a strong online community and fostering brand loyalty.
- Influencer Marketing: HP should partner with relevant influencers to reach specific target audiences and generate buzz around its products.
3. Strategic Partnerships and Acquisitions:
- Technology Partnerships: HP should collaborate with technology companies to integrate cutting-edge features into its products, such as AI, cloud computing, and cybersecurity solutions.
- Distribution Partnerships: HP should expand its distribution network through strategic partnerships with retailers, online marketplaces, and service providers.
- Acquisitions: HP should consider acquiring companies with complementary technologies, innovative products, or strong market positions in emerging markets.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of HP's internal and external environment, taking into account the following factors:
- Core Competencies and Consistency with Mission: The recommendations align with HP's core competencies in technology, manufacturing, and product development, and support its mission to deliver innovative computing solutions.
- External Customers and Internal Clients: The recommendations address the evolving needs of HP's target customers, while also considering the needs and capabilities of its internal teams.
- Competitors: The recommendations are designed to help HP differentiate itself from competitors and capture market share in key segments.
- Attractiveness - Quantitative Measures: While specific financial projections are not included in this case study solution, the recommendations are expected to drive revenue growth, improve profitability, and enhance brand equity.
Assumptions:
- HP has the resources and commitment to invest in product innovation, marketing initiatives, and strategic partnerships.
- The personal computing market will continue to evolve, driven by technological advancements and changing consumer preferences.
- HP can effectively leverage data analytics to understand consumer behavior and tailor its marketing campaigns.
6. Conclusion
By implementing these recommendations, HP can revitalize its brand, reclaim its leadership position in the personal computing market, and drive sustainable growth in the years to come. A focus on innovation, customer experience, and strategic partnerships will enable HP to navigate the challenges of a dynamic and competitive market.
7. Discussion
Alternatives:
- Cost Reduction: HP could focus on cost reduction and price competition to maintain market share, but this would likely lead to a decline in brand value and profitability.
- Merger or Acquisition: HP could consider merging with or acquiring a competitor to gain scale and market share, but this would require significant financial resources and regulatory approvals.
Risks:
- Technology Disruption: Emerging technologies could disrupt the personal computing market, rendering HP's current products obsolete.
- Execution Challenges: HP may face challenges in executing its strategic plans, due to internal resistance, lack of resources, or unforeseen market changes.
- Competitive Response: Competitors may respond aggressively to HP's initiatives, leading to a price war or other competitive challenges.
Key Assumptions:
- The recommendations assume that HP has the resources and commitment to invest in product innovation, marketing initiatives, and strategic partnerships.
- The recommendations also assume that the personal computing market will continue to evolve, driven by technological advancements and changing consumer preferences.
8. Next Steps
- Develop a detailed strategic plan: This plan should outline the specific initiatives, timelines, and resources required to implement the recommendations.
- Allocate resources: HP should allocate the necessary resources to support product development, marketing campaigns, and strategic partnerships.
- Monitor progress: HP should regularly monitor the progress of its initiatives and adjust its strategy as needed.
- Communicate with stakeholders: HP should communicate its strategic vision and progress to employees, customers, and investors.
By taking these steps, HP can position itself for success in the evolving personal computing market and ensure that the computer remains personal again.
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Case Description
In September 2008, Todd Bradley, executive vice president of Hewlett-Packard Company's Personal Systems Group (PSG) gathered his thoughts before a meeting with his top executives and managers for product design and marketing. On the agenda was a discussion of strategic next steps for the group. Hewlett-Packard (HP), a technology company providing a wide range of products and services including computers, handheld devices, servers and digital entertainment, employed 172,000 people and posted $104 billion in sales in 2007. PSG, one of HP's three major divisions, offered notebook and desktop personal computers, handheld mobile computing devices, monitors, workstations, and related support services. Bradley's PSG had played an important role in HP's financial success over the previous three years.
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