HP Case Study - Strategy

4231 Words Oct 30th, 2013 17 Pages
Table of Contents

Executive Summary 2
Introduction 3
External Analysis 3
Internal Analysis 8
Current HP Strategic Position 11
HP Strategic Implementation 14
Exhibits……………………………………………………………………………………………………15
Works Cited…………………………………………………………………………………………….19

Executive Summary
Hewlett-Packard’s personal computer (PC) division operates in a hyper-competitive, highly-commoditized industry subject to dynamic shifts. The PC industry is driven by technological advancements requiring continuing commitment to research and development to capture the ever-changing PC market. For most of the past five years, Hewlett-Packard led the PC industry in terms of market share. However, Hewlett-Packard’s market
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The PC industry has significant fixed entry costs and the challenges to compete with the economies of scale of major companies would be exceedingly difficult for potential entrants to overcome. Brand recognition creates another distinct entry barrier because PC consumers have high brand awareness (MarketLine, 2012). With that mentioned, Microsoft and Intel are powerful industry suppliers so the threat for forward integration is reasonable. In addition, the oversaturation of basic PC component suppliers in Southeast Asia poses an additional concern for potential entrants to the industry. New firms could originate in Southeast Asia by leveraging the low cost labor force and avoiding expensive supply chain expenditures.

Buyer Power

Differentiation:
The industry trend is to move manufacturing abroad in order to capture low cost labor efficiencies. There also has been a trend to homogenize products across the industry (Krabeepetcharat, 2012). In order to drive manufacturing costs down, most basic components used in the PC industry are standardized and lack significant differentiation (MarketLine, 2012). The exception differentiators are memory size, processor speed, and product form features (Bradley, 2012). Overall the industry has moved toward commoditization, which strengthens buyer power.

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