HP Case Study Essay

The fellowship Hewlett Packard (HP) was founded in 1938 by William Hewlett and David Packard, devil galvanising engineers from the Stanford University. They initi ally started it in a garage behind Packards class in the state of California, manufacturing only electronic instruments at that time. Their showtime w are was a resistance-capacity audio oscillator, an instrument used to test the sound equipment. The biggest node of that product was Walt Disney Company.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 million and the gild employed 166 employees. During 1950s HP gained popularity as a producer of groundbreaking measuring and testing equipment of grant note. HP first acquired the F. L. Moseley Company in 1957, which was the producer of quality graphic rec armys. After this, HP started to globalize its Business.In 1959, it opened the first Marketing office in Switzerland and a manufacturing plant in Germany. Realizing the need to sustain the synergy in the organization Hewlett and Packard formulated the values and objectives of the organization, these values and objectives formed the basis of the steering style at the caller, referred as The HP Way nowadays. (Moganty, n. d. ) Thus HP transformed into a democratic organization where every employee has the autonomy to spill the beans to his immediate boss and other(a) employees having different hierarchical positions.The company act to diversify its job and entered the Asian market in 1963 forming a marijuana cigarette venture with a Japanese securely. In 1968, HP invented the HP 9100 background signal scientific calculator, after that many in advance(p) computing products in the 1970s, hence, bank 1980s HPs business portfolio was filled with a massive array of products and to strengthen its position HP acquired Apollo Computers, which was then the leading manufacturing business of workst ations.By 1990s HP had 92,000 employees and earned revenues of approximately $13. billion. External environment With the recession in PC industry of the United States in 1990, HP started to lag behind, and significantly loss a share in ripe products, it was not able to cope with the changing conductions in the industry out-of-pocket to its old fashioned organizational culture. Employees started becoming dissatisfied with the way the company was managed. According to a poll conducted among HP employees, HP lacked in well-defined directions and was said to have become too product oriented.In order to deal with this situation, HP decided to focus on its computer business and spun off its measuring, testing and medical equipment division into a forward-looking company. This was do in early 1999 and a new company named Agilent Technologies Inc. was founded, which only dealt with the devices other than those related to computing. As a consequence, HP was left with only quartet main divisions Personal computers, inkjet printers, laser printers and servers. Despite the measures, taken by the company to reduce costs and drafting a new internet strategy, it was believed that what HP actually needs is a change in leadership.So a CEO named Carly Fiorina was hired. Soon after becoming the CEO, she started a mass trade program for HP, new advertisements were made in which the employees of HP were referred as A fearless 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 set 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. Ever since the merger took place HP was having disappointing earnings which indicated the larger-t han-life fail of Fiornias leadership. HP was facing continuous losses and the estimated gross sales forecasts also turned out to be lower than what was expected. HPs share price also fall up to 13% and Fiornia was goddam for all this. According to critics, she was unsuccessful in managing the company well because during her upgrade she behaved like a celebrity, travelling in limousine and not communicating with the employees face to face.Fiornia was terminated for not being able to delegate the firms strategies. (Paul, 2005) Industry Analysis Based on the Porters framework of industry analysis the following results are most possible to occur 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 result of concern for HP now-a-days. Because the products of HP are unique and are advanced(a) and are not easy to copy by the rival companies or any new firm that is trying to enter in the PC industry.Even if the products of HP are copied they would not be as tried as of HP. Bargaining former of Suppliers HP believes in providing its customers with products that are of premium quality, and since there are only few suppliers in the computing market, they may have an effective bargaining effect on HP to commit them high 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 available 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 custom ers switched to other brands due to which the company started to get 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 replacement to these brands, the companies started to make the most of it and increased their prices, while disappointed customers of HP were crap to purchase other brands because HP was not performing up to the mark. (Novelguide, n. d. )