The persistent decision making confidence of Hewlett-Packard’s former CEO, Carol Fiorina, made the most brilliant and justifiable success stories for the company seen through the acquisition of Compaq, the former leading competitor in computer manufacture. One of the most successful strategies that Hewlett-Packard has used to outdo its competitors is the company’s focus on the unmatched quality products and services. Hewlett-Packard’s strategies have been successful mainly because of its constant investment on research and technological development.
Acquisitions and mergers with the world’s top technology companies like Electronic Data Systems (EDS) has also proven to be a strategic move for Hewlett-Packard to maintain its position as the world’s leading IT products and services company. The successful acquisition of EDS by Hewlett-Packard in August, 2008, and subsequent renaming of EDS to EDS, an HP Company, has helped ensure that Hewlett-Packard maintains its market grip in the IT/Computer services sector. Through EDS’s services, Hewlett-Packard is able to penetrate the IT Services industry and create a strong supply chain to sustain its market leadership.
The main threats to Hewlett-Packard’s growth and revenue generation would be change of government policies, new laws, and tax changes. Other threats may be the increasing circulation of counterfeit and low quality products that could affect the core Hewlett-Packard market target i. e. customer loyalty and trust in the quality of HP products. Survival recommendations and tactics would be the current H-P trend to invest in mergers and acquisitions of companies in core business areas and wide market reach.
With the acquisition of EDS, an HP Company, Hewlett-Packard can now add new business areas to its range of product and service provisions. The Asian African markets are increasing demand for IT products and services necessitated by their exploration of the areas such as Business Process Outsourcing which is EDS’s area of specialization. With EDS as part of Hewlett-Packard, H-P can now explore and gain a new market niche in offering IT services to the BPO companies in Asia and Africa. Read about HP competitive advantage
H-P’s clients can obtain much needed assistance from the company website and customer care centers in a timely manner making H-P favorable in service offerings. In order to maintain market leadership, growth, revenue generation and profitability, H-P may have to implement certain strategies. Some of these strategies may be through proving to be fairly priced against the quality of services provided would let H-P maintain the lead in the IT Industry. Another strategy may be to comply with customer contracts and government contracting regulations.
Though the new CEO, Mark Hurd, may want to venture into more acquisitions and mergers, there may be plenty of opportunities in the IT service sector yet to be explored through EDS, an HP Company. With more and more companies in the developed countries outsourcing to the Asian and African countries, there is great need for IT Support. With these opportunities, H-P can now develop long-term business relations with suppliers and customers/end-users that will ensure insatiable demand for its products and services. Under the former CEO, Carol Fiorina, Hewlett-Packard did not focus on growth.
However, current opportunities, if taken by Hewlett-Packard’s new CEO, Mark Hurd, would bring significant economic and business growth to the company. While the merger with Compaq brought H-P an added competitive edge in the computer hardware manufacture, the acquisition of EDS, an HP Company will now see H-P attain a competitive edge in the IT Services sector. This means that both ventures are almost equally important to H-P in maintaining leadership in the IT industry. Exclusive branding may be a good source of quality assurance for Hewlett-Packard’s customers. Also read HP competitive advantage
This will in turn ensure continued customer loyalty that may have been threatened by the circulation of counterfeit products by individual suppliers. Having EDS on board, Hewlett-Packard can now make concrete progress towards core initiatives including the completion of the first phase of its information technology transformation. In addition, H-P, would also expand its comprehensive, strategically assembled portfolio that ensured unmatched capabilities for delivering end-to-end solutions. With EDS, H-P will have added world class, globally scaled services capability to its current leadership in hardware and management software.
Benefits of the IT transformation targeted by Hewlett-Packard include consolidation of internal data centers to fewer next-generation modern data centers, reduction of energy consumption in data centers and increase in processing power. With a comprehensive portfolio of hardware, software and services, HP is well positioned to help customers manage and transform their IT infrastructure and environments. This will in urn ensure that consumers have the much needed connectivity to information that is crucially essential and needed for strategic decision making.
Borrowing from Carol Fiorina’s strategy to cut costs and develop innovative products and services, the new CEO, Mark Hurd can continue the management policy of maintaining not only the current client base, but also attracting new clients and suppliers. Mark Hurd can then couple this strategy with his acquisition and growth focus to develop unmatched and unique products and services that will ensure growth and stability for the company. BIBLIOGRAPHY Mark V. Hurd and Catherine A. Lesjak; Annual Report (2008). Available from http://media. corporate-ir. net/media_files/irol/71/71087/HewlettPackard_2008_AR. pdf.