HP Case Study Essay

The comp whatever Hewlett Packard (HP) was founded in 1938 by William Hewlett and David Packard, two electrical engineers from the Stanford University. They initi totallyy started it in a garage behind Packards home in the state of California, manufacturing only electronic instruments at that time. Their first crossing was a resistance-capacity audio oscillator, an instrument used to test the sound equipment. The biggest customer of that product was Walt Disney association.In 1940, HP was formed, with the establishment of Hewlett and Packards own factory in Palo Alto. By the end of this year, HPs revenue exceeded $2 trillion and the company employed 166 employees. During 1950s HP gained popularity as a manufacturer of innovative measuring and testing equipment of premium quality. HP first acquired the F. L. Moseley Company in 1957, which was the producer of quality graphic rec coifs. After this, HP started to widen its Business.In 1959, it opened the first Marketing awayice in Switzerland and a manufacturing plant in Germany. Realizing the need to sustain the synergy in the organic law Hewlett and Packard formulated the values and objectives of the organization, these values and objectives formed the basis of the management dah at the company, referred as The HP Way nowadays. (Moganty, n. d. ) Thus HP modify into a democratic organization where every employee has the autonomy to talk to his conterminous boss and other employees having different hierarchical positions.The company continued to transfigure its business and entered the Asian market in 1963 forming a joint threaten with a Japanese firm. In 1968, HP invented the HP 9100 desk pass by scientific calculator, after that many innovative computing products in the 1970s, hence, till mid-eighties HPs business portfolio was filled with a wide align of products and to strengthen its position HP acquired Apollo Computers, which was then the leading manufacturer of workstations.By 1990s HP had 92,0 00 employees and earned revenues of approximately $13. billion. External Environment With the respite in PC industry of the United States in 1990, HP started to resort behind, and significantly loss a component in innovative products, it was not able to cope with the changing conductions in the industry due to its aging fashioned organizational culture. Employees started becoming dissatisfied with the way the company was managed. concord to a poll conducted among HP employees, HP lacked in clear directions and was utter to energize become too product oriented.In order to plough with this situation, HP decided to focus on its computer business and spun pip its measuring, testing and medical equipment division into a new company. This was done in early 1999 and a new company named Agilent Technologies Inc. was founded, which only dealt with the devices other than those relate to computing. As a consequence, HP was left with only four primary(prenominal) divisions Personal c omputers, inkjet printers, laser printers and servers. Despite the measures, taken by the company to fasten costs and drafting a new internet strategy, it was believed that what HP in reality needs is a change in leadership.So a chief executive officer named Carly Fiorina was hired. Soon after becoming the CEO, she started a mass marketing chopine for HP, new advertisements were made in which the employees of HP were referred as A chivalrous collection of inventors, many of those advertisements had Fiornia herself. But all of this went in vain, and on the top of it the merger between HP and Compaq Computers Corp. made the conditions even worst for HP. As a consequence, the companys culture change and new rules were manage which were in the favor of the company according to Fiornia.But the laying off of approximately 17,000 HP employees was beyond the level of understanding of all the people. constantly since the merger took place HP was having disappointing earnings which ind icated the epic operate of Fiornias leadership. HP was facing continuous losses and the estimated sales forecasts excessively turned out to be lower than what was expected. HPs sh atomic number 18 price also fall up to 13% and Fiornia was blamed for all this. According to critics, she was unsuccessful in managing the company well because during her tenure she behaved same a celebrity, travelling in limousine and not communicating with the employees bet to face.Fiornia was terminated for not being able to delegate the firms strategies. (Paul, 2005) Industry Analysis Based on the Porters role model of industry analysis the following results atomic number 18 just about likely to decease for HP Threat of New Entrants Since HP only has two major competitors, Lenovo and Dell, the threat of new entrants is not as a matter of annoyance for HP now-a-days. Because the products of HP are whimsical and are innovative and are not easy to copy by the rival companies or any new firm that is trying to enter in the PC industry. steady if the products of HP are copied they would not be as reliable as of HP. Bargaining Power of Suppliers HP believes in providing its customers with products that are of premium quality, and since thither are only few suppliers in the computing market, they may have an effective bargaining effect on HP to give them gamey charges for assembling or providing parts for their computing devices. Bargaining Power of Suppliers Customers are the main priority for any company and so for HP. In order to retain its customers, Hp made a number of efforts.It had provided its customers with innovative and unique products that no one else in the industry provided before. Threat of Substitutes Substitutes are unattached in the market for HP products, but as discussed earlier, the quality of HP products is much higher. Since, different technologies were introducing at the time of Fiornias tenure, HP was not able to keep up with its traditional image of producing innovative computer, so as a result the customers switched to other brands due to which the company started to beat up in losses. Vyomesh, 2005) Rivalry Dell and Lenovo are major rivals of HP these companies gained the most when HP was facing different kinds of leadership crisis. When people started switching to these brands, the companies started to hasten the most of it and increased their prices, while disappointed customers of HP were ready to get other brands because HP was not performing up to the mark. (Novelguide, n. d. )