The key strategic issues facing Hewlett Packard as it seeks to generate and sustain
competitive advantage.
The objective of any organisation is to
Create and sustain long term competitive advantage get quote
Corporate strategy is central to achieving this through making assumptions of an
organisation external environment, its resources, and formulating a plan of how they
should operate. The organisation upon which I have conducted my research: Hewlett
Packard (HP), have recently been reported of having
Some cost and profitability problems (Analyst-Goldman Sachs 2005)
Added to this has been the threat from competitive rival Dell as their profits and market
share grew. Using key frameworks, I will examine and conclude the key strategic issues
contributing to these issues.
To complete this analysis, I will focus on the following key areas:
– What are the current strategic issues facing Hewlett Packard?
– In light of these issues, how does Hewlett Packard create value and why?
– How are these values organised and managed?
– Does this value enable Hewlett Packard to sustain competitive advantage?
Hewlett Packard operates as a market leader in the fast changing, highly competitive
information technology market and was renowned for its collaborative and decentralised
structure-directly influenced by the two original founders. In recent years however, a rapid
economic slowdown and the end of a “œboom in demand for computer products and
downturn in consumer spending, has seen Hewlett Packard having to evaluate their
external environment, internal structure and processes in order to generate competitive
advantage over their rivals, and refrain from:
Slowly declining into mediocrity and irrelevance”
http://news.bbc.co.uk/1/hi/business/1168012.stm
A brief examination of Hewlett Packard external environment is necessary in order to fully
understand the current pressures of their marketplace, and enable an analysis of the
organisation. To aid this, I will be using Porter “œFive Forces framework:
– Threat of New Entrants
– Threat of substitutes
– Bargaining power of buyers
– Bargaining power of suppliers
– Competitive rivalry
Hyper-competitive, fast changing marketplaces-such as that of the information technology
industry-force organisations operating within them to react or become obsolete. The threat
of new entrants, substitutes and competitive rivalry can be seen as defining features of the
information technology market-constant advances in technology can see a product go from
cutting edge to irrelevant within a matter of months, so organisations must ensure that they
can react to whatever threat or change in external environment arises in order to keep up
with competition. A major factor of HP current success is that of its brand. This unique
resource has enabled the organisation to trade on their name in some circumstances,
