1. Hewlett-Packard
Introduction to Management

2. Table of Contents
Introduction 3
Phase 1 ID Card
Timeline
Products
HP by Numbers
4
6
7
8
Phase 2 Introduction to Phase Two
Innovation
Employee Environment
Management Excellence
Customer Relationship
Healthy Finance
Conclusion: Improvement Case
9
10
12
14
15
17
19
Phase 3 Scenario B: Analysis of Problems
Improvements: Customer Image
Improvements: Employee Environment
Improvements: Innovation
Improvements: Healthy Finance
Action Plan
20
21
22
23
24
25
Conclusion 26
Sources 27

3. Introduction
In the framework of our course “Introduction to
Management” at the University of Antwerp, we have
been tasked with making a case study of a top market
listed company.
Based on various published sources and conceptual
framework, we intend to restructure the overload of
information, interpret it and use it to get insight into the
problem statement. In this introduction we elaborate on
the chosen organization, the problem statement, the
conceptual framework and the structure of this group
assignment.
For this assignment Hewlett-Packard was selected as
the subject, because this organization is active globally
and within very interesting markets. This gives us the
opportunity to gather a lot of facts and data to build up a
rich case study.
The problem statement of this group assignment is: “Can
HP be viewed as a best practice or an improvement
case?” This will be determined on the basis of the
conceptual framework below.
To find out whether or not HP is a best practice or
improvement case, phases 1 and 2 will be reviewed.
Based on a general description of the organization, and a
comparison with competitors based on certain
characteristics, a decision will be made whether it is a
best practice or improvement case. Thereafter, the
organization will be analyzed in phase 3 so
recommendations are created and we are able to assess
Overview
Hewlett-Packard is a global company that sells personal
computers, printers, tablets, and enterprise services to
businesses and the general public.
Starting Up
Like all great technology companies, HP started in a
garage. Dave Packard and William Hewitt became
partners in 1938 when they invented their first product.
After this point they started growing very rapidly. HP
entered the New York Stock Exchange in 1961 and
showed up on the Fortune 500 list a year later. In 1963
the company released their first computer, followed in
1980 by the first personal computer. Since then they
have designed countless computers and printers and
performed services for many companies.
Current News
In October of 2014, HP announced splitting their
services to separate their enterprise services from the
printer, PC, tablet, and other products. This split will not
be in full effect until 2015. The official purpose of the
split is to allow HP to adapt more quickly to the two very
different markets. At the end of October of 2014 HP
announced the release of an all new product called
Sprout, which eliminates the need for a mouse and
keyboard with touch technology
3

4. ID Card
HP is an American manufacturer of software and
computer services with its headquarters located in Palo
Alto, California.
HP designed the first personal computer. The company
was the first IT company in history to report revenues
exceeding $100 billion and was ranked #17 in the
Fortune 500 list of 2014.
HP’s main goal as expressed by its founder Dave
Packard: “It is necessary that people work together in
unison toward common objectives and avoid working at
cross purposes at all levels if the ultimate in efficiency
and achievement is to be obtained.”
HP does not have an official mission statement but it is
expressed through ‘The HP Way’, which states the
company’s values and objectives.
HP’s values are trust and respect for individuals,
achievement and contribution, results through teamwork,
meaningful innovation and uncompromising integrity.
HP’s objectives include customer loyalty, to make a
profit, growth, market leadership, commitment to
employees, leadership capability and global citizenship.
HP owns and leases more than 770 sites in 95 countries
worldwide. They have local departments in Europe,
Middle East, Africa, Asia, Pacific, Japan and the
Americas.
HP’s founding fathers, William Hewlett (right) and
David Packard (left).
PHASE 1
Living Progress: How HP strives to create a better future for
everyone through their actions and innovations. HP’s Living
Progress aims to make a positive contribution to society in 3
dimensions that are listed below.
✓ Human Progress: This aspect aims at advancing
the overall health and well-being of people.
Enabling human progress around the world is a
core commitment for HP.
✓ Economic Progress: This aspect aims at helping
businesses and economies thrive. The company
seeks to make businesses and individuals more
efficient and profitable with their products and
services.
✓ Environmental Progress: This aspect aims at
making the environment stronger as HP grows. For
one example, HP published their complete water
footprint for the first time in 2007. Through this
report and their carbon emissions report they
4

5. The operations of the company are organized into seven
reportable business units:
1. Personal Systems Group (PSG)
“PSG provides commercial personal computers (PCs), consumer
PCs, workstations, calculators and other related accessories,
software and services for the commercial and consumer markets
(Reuters, 2014).”
2. Services
“Services provide consulting, outsourcing and technology
services across infrastructure, applications and business
process domains (Reuters, 2014)”.
3. Imaging and Printing Group (IPG)
“IPG provides consumer and commercial printer hardware,
supplies, media and scanning devices. IPG is also focused
on imaging solutions in the commercial markets (Reuters,
2014).”
4. Enterprise Servers, Storage and Networking
(ESSN)
“ESSN provides server, storage and networking products in a
number of categories (Reuters, 2014)”.
5. HP Software
“HP Software provides enterprise IT management software,
information management solutions and security
intelligence/risk management solutions (Reuters, 2014).”
6. HP Financial Services (HPFS)
“HPFS supports HP’s global product and service solutions,
providing a range of financial life cycle management services.
HPFS enables its worldwide customers to acquire IT
solutions, including hardware, software and services. The
company offers leasing, financing, utility programs and asset
recovery services, as well as financial asset management
services for global and enterprise customers (Reuters,
2014).”
7. Corporate Investments
“Corporate Investments includes business intelligence
solutions, HP Labs, webOS software and certain business
incubation projects. Business intelligence solutions enable
businesses to connect and share data across the enterprise
and apply analytics. This segment also derives revenue from
licensing specific HP technology to third parties (Reuters,
2014).”
“HP conducts its business in a highly competitive
environment. In the Personal Systems Group, HP faces
competition from Lenovo, Dell Inc., Acer Inc., Apple Inc.,
Toshiba Corporation and Samsung Electronics Co., Ltd.
While in the Printing segment it has to compete with the likes
of Lexmark International, Xerox Corporation and Seiko Epson
Corporation (Nasdaq, 2014).”
ID Card
PHASE 1
5

6. Timeline
PHASE 1
6

7. Products
Laptops
HP laptops range from thin and light to detachable and
convertible. The HP ENVY Notebook allows users to use
apps with Control Zone and view images through HD. All
are available to customize.
Desktops
HP desktop computers specialize in high performance,
everyday use, and gaming. A new product, Sprout, has
just been released with an interactive touchpad where
users can touch their creations and instantly capture and
view projects.
Servers
HP servers have lower hardware acquisition costs as
compared to RISC servers with reduced operating costs
related to licensing and cooling. HP BladeSystem
provides scalability and efficiency, which can reduce data
center costs by up to 68% and downtime by as much as
90%.
Tablets
An array of Android tablets with Google apps are offered
on HP’s website. Prices range from $150 to around
$250.
Printers
Designjet offers gallery worthy printing, while Officejet can
handle a larger amount of printing. HP also offers
industrial presses for business that require mass
quantities of printing.
Software
Enterprise software is directed more at businesses and
has over 200 offerings. Among these offerings are
software for application defenders, log management,
security, big data analytics, and cloud technologies.
Services
With consulting, outsourcing, and support services, HP
helps enterprise businesses succeed. They deal with
data, applications, business processes, and mobility to
name a few areas.
PHASE 1
7

8. HP by numbers
Founded in
1939
HP predates the
computer age.
HP serves more than
1 billion
customers in more
than
170
countries, on
6
continents.
Hewlett and Packard
founded the company with
$538
in capital, including
equipment.
HP created the
1st
personal computer.
The company works with
approximately
145,000
distributors resellers and alliance
partners worldwide.
It holds the
17th
position on
the Fortune
500 List.
Oct. 6
2014
HP executives
announced
that the
company will
split in two by
the end of its
fiscal 2015.
Currently, HP is
comprised of a
team of
317,500
PHASE 1
8

9. Introduction to Phase Two
Phase Two
Phase two will contain an analysis of HP based on five
variables that define performance of a company. Our
criteria that define a company’s success include
Innovation, Employee Environment, Management
Excellence, Customer Relationship, and Healthy
Finance. HP’s performance on these variables will be
compared with three of their main competitors: IBM,
Lenovo, and Apple. At the end of the phase HP will be
declared a Best Practice or an Improvement Case.
Main Competitors:
IBM
International Business Machines Corp (IBM) is a large
American information technology company. They work
with clients to solve business problems and create value
for the businesses. In October of 2014 IBM sold x86
server business to Lenovo for $2.1 million. This will give
IBM more opportunities to work on their software and
service sectors.
Lenovo
Lenovo is a multi-billion dollar Chinese personal
technology company. Lenovo is currently the largest
personal computer vendor in the world. Lenovo also
creates tablets, smartphones, and smart TVs. With the
acquisition of IBM’s server business, Lenovo will have
the perfect opportunity to expand it’s own product base.
Apple
Apple is a fast growing company that manufactures and
markets smartphones, tablets, PCs, and software. Their
popular products include the iPhone, iPad, and Macbook.
Apple designed its own operating system for their
products, which links all the devices owned by a
customer together through their own personal Cloud.
9

10. Variables: Innovation
Innovation or Research and Development drives an
organization. Without innovation a company can’t change
or create more effective processes, products and ideas.
The more innovation a company has, the higher the
chances are of surviving in a difficult environment.
Through innovation a business can grow and create a
competitive advantage. Innovation has to be a part of the
strategy and the strategic vision of a company.
A company shouldn’t think that innovating just means
inventing new products because innovative thinking and
creative problem solving are also consequences of a
company being highly concerned with innovation.
Innovating affects all departments of a company in a
positive way. It may not look like this, but innovation
saves a company time and money and it can even
increase customer satisfaction. A company can measure
the advantages of being innovative by looking at their
ROI or Return on Investments. This ROI can evaluate
the efficiency of all kinds of investments like for example
the return of an innovation program. There are different
ways to calculate the ROI, the most common one is to
divide net profit by the total assets of a company.
To conclude this part of innovation being important for a
company we can say “The real act of discovery consists
not in finding new lands, but in seeing with new eyes”, a
phrase by Marcel Proust. If HP wants to be an innovating
company it should not just make new products but it
HP wants to accelerate innovation in order to drive
revenue, manage risk and lower costs. In their annual
report they mention innovation in each of their divisions.
Innovation is a key element for HP. “Our development
efforts are focused on designing and developing
products, services and solutions that anticipate
customers’ changing needs and desires, and emerging
technological trends. Our efforts also are focused on
identifying the areas where we believe we can make a
unique contribution and the areas where partnering with
other leading technology companies will leverage our
cost structure and maximize our customers’
experiences.” The last three years HP invested
approximately 3 billion dollars in R&D. The Moonshoot
server, Converged Storage Portfolio, HAVEN, Ink
Advantage are some of the new products and services
HP came up with last year. HP wants to moderate
revenue declines from previous years with product
innovation.
PHASE 2
10

11. Variables: Innovation
First, the column above shows R&D expense increased
in fiscal 2012 due to additional expense from the
acquisition of Autonomy and innovation-focused
spending for Storage, Networking and converged cloud.
Second, the column shows that in 2013 HP invested less
in the Printing and Enterprise Group division when we
consider R&D. How can you innovate in these divisions
when you invest less? HP mentions that lower R&D
expenses in Printing are due to ongoing restructuring
efforts and the ones in Enterprise Group are due to the
rationalization of R&D. When we consider all divisions in
2013 we see a decline in R&D expenses. This is due to
cost savings from restructuring, as we’ve seen in
Printing, and higher value added R&D tax subsidy
credits.
The column underneath shows the share of R&D
expense in the total costs and expenses of HP in 2014
The numbers above show HP compared to their three
main competitors. HP doesn’t have the lowest percentage
spent on R&D, but if you compare HP to Apple and IBM,
they are far behind. Based on this HP receives a score of
2 out of 5 for innovation, because they still have a lot of
work to catch up with the biggest competitors in the
market.
PHASE 2
11

12. Variables: Employee
EnvironmentAn organization is a social unit of people. Employees
need to be managed, motivated trained and retained.
Talented, diverse and motivated workers are one of a
company’s main strengths and could provide the
organization a competitive advantage.
Employee satisfaction
Keeping employees satisfied with their job should be one
of the priorities of HP. There are many reasons why
employees can become dissatisfied with their job and
eventually resign. Its HP's job to detect and avoid these
reasons. When employees are engaged and loyal,
companies perform better. Also, satisfied employees will
not have the intention to leave the company. Moreover,
job satisfaction can be measured by anonymous surveys
within the organization. From these results an
organization can learn and take necessary actions.
Employee retention
Retention policy consists of recruiting the right people
and retaining these talented employees. The challenge is
to reduce the number of employees leaving the
company. Because employees who leave the company
must be replaced and this takes time and costs money.
Also, the high performers contribute to the effectiveness
and efficiency of a company. In short, a company must
try to avoid the loss of personnel who has the necessary
skills and experience by keeping them satisfied.
Diversity
Diversity of the workforce is important in every company.
Differences in interests, ethnic groups, generations, age,
backgrounds, gender and also differences in education,
experiences and perspectives will lift the creativity within
a company. Creativity will stimulate innovation and
increases inventions. Diversity of the workforce will help
a company to understand customers’ needs all over the
world and maintain a good relationship with all of their
customers.
For the moment there are 317, 500 employees worldwide
who work for Hewlett-Packard. In 2013, HP tried to
ameliorate the work environment, fostering pride in the
company and they has focused engagement efforts on
career development, recognition and and rewards. It all
has paid off because the employee feedback shows
increasing satisfaction with the company, with 71%
recommending HP as a “great place to work,” up from
60% in 2012.
HP promotes engagement through different programs,
such as:
“Voice of the workforce: This is an annual, anonymous
survey to reflect HP’s business priorities and employee
attitudes related to innovation and quality. In 2013, 80%
of all employees took part (HP, 2013).”
“HP Pride Builders: It is HP’s new global network of 2
PHASE 2
12

13. Variables: Employee
Environment
Due to the increasing job satisfaction we can assume
that they will not leave the company quickly.
HP tries to recruit the right people because they are
convinced that their success depends on recruiting,
developing and retaining the best people available in the
highly competitive industry.
For recruiting the right people, HP introduced in 2013 a
new career-development model. HP describes this new
career-development model as follows: “It puts the
employee at the center, providing an interactive, inviting,
and integrated experience. Employees can explore their
strengths and interests, find roles that fit them best,
define their career goals, create a plan to achieve them,
and make meaningful career choices. The Career
Development @hp landing page received more than
285,300 visitors during 2013, compared to about 125,000
in 2012 (HP, 2013).”
Besides the employee satisfaction and employee
retention we can also say that HP’s workforce is diverse.
HP employs workers from all over the world with
different cultures, ethnic groups, generations,
backgrounds and with a wide range of skills and
interests.
In 2013, more than 350 diversity-focused events in 34
countries have been led by HP’s Employee Resource
Groups. Topics as career development, diversity
50 diversity-focused events in 34 countries have been
led by HP’s Employee Resource Groups. Topics as
career development, diversity recruitment, cultural
awareness, and community volunteering were included.
We can decide that HP scores well on employee
satisfaction and the diversity of their workforce but there
is still a gender gap. Therefore, HP receives a score of
3,5 out of 5 for Employee Environment. HP is aware
of that and already took some actions. To increase the
percentage women working in the company they, in
2013, introduced two initiatives to help women, in and
outside HP to advance their technology careers.
First initiative is Ascend. It is a global sponsorship
program to help talented women, in and outside HP.
In 2013, HP established a Women’s Innovation Council.
This council brought together 25 female technology
PHASE 2
13
Fema
le
32,5
%
Male
67,5
%

14. Variables: Management
ExcellenceManagement continuity is very important for an
organization. The CEO is like the captain of a ship, he or
she decides the course of action within the organization.
Investors do not favor companies that are unstable due
to governance problems. A best practice company has
stable management and a reliable leader. HP has had
some serious issues concerning management continuity
and stability.
Since 2005, HP has had four different CEO’s including
Mark Hurd, Cathie Lesjak, Leo Apotheker, and Meg
Whitman. . The current CEO, Whitman, was appointed in
2011. She was the leading lady of EBay from 1998 until
2008. She is a proven executive. Since her appointment,
she has been working to reinvent HP. These struggles
with leaderships have taken their toll and have turned HP
into a market following instead of a market-leading and
innovative company. HP has been hurt massively by
these internal problems.
Meg Whitman on her LinkedIn account: “As I’ve told
employees at HP since accepting the role of CEO, there
is no greater challenge in business than carrying out a
corporate turnaround. But there is also no opportunity as
exciting as working to restore one of the most iconic
companies in the world. It’s why I took the job. (...) We’ve
brought stability back to the business through a range of
actions, including improving operations, implementing an
aggressive cash management program and putting in
Meg Whitman on the cover of Forbes
magazine: “Can the queen of Silicon
Valley save its original startup?”
“Blunt, folksy and persistent, Meg Whitman is the leader
that Hewlett-Packard desperately needs. She’s decisive
without being abrasive, persuasive without being slick.
She’s a team builder who knows that turnarounds call for
repairing hundreds of small failings rather than betting
everything on a miracle cure that might be a mirage. In the
words of HP director Mark Andreesen, one of Silicon
Valley’s top venture capitalists, “She’s the best CEO the
company has had since its founders.”” (Forbes, 2013)
PHASE 2
14

15. Variables: Customer
RelationshipCustomer satisfaction is a good indicator how an
organization is performing. Satisfied customers are more
likely to purchase products or services from an
organization again and develop loyalty. It is cheaper to
keep customers than to obtain new ones. According to
Harvard Business School, “A 5% increase in customer
retention increases a company’s profits by 25% to 95%.”
Customer loyalty can significantly affect a company.
Additionally, an extremely satisfied or dissatisfied
customer will spread the word to other potential
customers. If customer satisfaction is high, this is an
indicator of a best practice case. On the other hand if
customer satisfaction is low, this indicates a need for
improvement.
An organization should also be judged on its impact on
society and the environment. In order for a company to
be healthy, it needs to keep the area and people around
it healthy too. It is ethical for an organization to at least
maintain the current status of the environment around its
customers, if not better it. Helping in the community can
help improve an organization’s image and advertise it at
the same time.
Brand equity is caused by increased respect for an
organization’s products or services. When a customer is
willing to pay more for a product based on the brand, an
organization has done a good job creating a reputation
for itself. Poor brand equity can result in the loss of sales
HP has varying consumer satisfaction ratings across its
product and service mix. Consumer reports recommends
75 printers, 13 of which are from HP. This is the highest
amount from any one brand, with Brother and Cannon
coming in second each having 10 printers
recommended. HP's G8 ML350p server came in at
number 3 on a list of the best servers according to
findthebest.com with a rating of 99.4 out of 100. Their
personal computers on the other hand are not doing so
well. Customer satisfaction has decreased by 7.5%
between 2013 and 2014, which is 4% below the industry
average for percentage changed. According to a report
from Vocallabs, customer satisfaction for HP overall went
from 48% in 2009 to 43% in 2011. Apple had a rating of
56% in 2011, while Dell had only 40%. Indeed HP is
ahead in some sectors, but behind in others.
Customer loyalty and retention is a focus for HP. They
recently released SmartVideo, which allows HP to send
videos with personalized and relevant information to
individual customers. Jim Dicso, president of SundaySky
said, “SmartVideo creates better customer experiences
that drive loyalty, increase lifetime customer value and
boost brand advocacy.” This should help HP to increase
its customer loyalty. In 2011 68% of surveyed HP
customers said they would repurchase at product or
service from HP. This is up 1% from 2009, but is not
close enough to Apple’s 82% repurchase rate. This area
PHASE 2
15

16. Variables: Customer
RelationshipGlobal citizenship is one of HP’s seven corporate
objectives. They work to achieve this by investing in
human, economic, and environmental progress. This
equated to a 135.3 million dollar investment in 2013. HP
is doing their part to be a good corporate citizen.
However, HP’s brand worth is not keeping up with its
competitors. In 2014, Core Branded ranked the 100
highest brand power companies. Apple was ranked
number ten. Dell was 48 followed by IBM at 49. HP only
came in at 75. HP is not respected enough as a
technology brand.
HP’s relationship with its customers is below its potential.
In printers it is doing well, but overall they are falling
behind. Apple is dominating the personal computing
industry and HP is unable to stop them. This is hurting
HP’s brand even more. HP is an alright choice in
customers minds, but they have many better alternatives
to choose from. HP gets a 3 out of 5 in Customer
Relationship. They are a possibility to customers when
looking to invest in new technology, but not the clear
choice. The company is doing well in some areas, but
not in all. Customers can see their social responsibility,
but this won’t make them buy inferior products. Although
their overall customer satisfaction is not high, it is not the
lowest of HP’s competitors.
PHASE 2
16

17. Variables: Healthy Finance
Revenue Growth
Revenue is vital to the success of any company. In order
for a company to grow, it must increase profits each
year, either by increasing revenue or decreasing costs.
Positive revenue growth is a good indicator of how the
company is doing, and how it will do in the future. HP has
seen revenue decline every quarter for more than a year.
Dividend Yield
Dividends are part of what make a stockholder invest in a
company. A potential investor will monitor the past
dividends to get a grasp on what future dividends will be.
The dividend yield is the percent of the share price that is
given back to the shareholder. Many shareholders will
decide whether or not to purchase a new stock based on
the dividend yield, so it is important for a company to
maintain a steady return for the current and future
shareholders.
The numbers in the table above shows the
financial data for HP and it’s main competitors.
Knowing the numbers solely for HP does not give
an accurate description of the state of the
company. The numbers must be compared to
other companies in the industry in order to truly
have a perspective of how a company is doing.
Averaging the numbers of the three competitors
gives an industry average that HP can be
compared to.
Based on these numbers, HP received a score of
2 out of 5 for Healthy Finance because it is
significantly lower than the competitors in all
three categories.
PHASE 2
17

18. Variables: Healthy Finance
Debt to Equity Ratio
D/E ratio is a measure of a company's financial leverage
which shows the proportion of debt and shareholder’s
equity the company is using to finance its assets. A high
D/E ratio can mean that the company is growing
aggressively by financing its debt, which can result in
unpredictable earnings and more interest expense. A
higher ratio is a higher risk for investors, but it can lower
the company’s earnings before taxes.
HP’s D/E ratio has decreased significantly in the past few
years, however the ratio itself still remains high. This is a
concern because if HP was in a financially stable
position, it would want to keep the tax advantages of a
high D/E ratio
Return on Equity (ROE)
ROE is a measure of how much profit a company makes
with the equity the shareholders have invested in a
company. Before making a new investment, many
shareholders will look at a company’s ROE to determine
if the investment will be worth their while or not.
PHASE 2
18

19. Conclusion: Improvement Case
Our team defines company performance through 5
variables, all of which are crucial to the success of
organizations. The 5 variables selected include
Customer Relationship, Management Excellence,
Employee Environment, Healthy Finance, and
Innovation. The variables are assessed on a numerical
scale of 1 to 5, in which 5 signifies excellence in
performance, and 1 is a poor score which indicates a
great amount of improvement needed.
We concluded that in order for any corporation to be one
of best practice, the company must achieve perfect
scores of 5’s for all five variables, with an exception of a
two 4s.
Through our analysis and application of this numerical
rating system, HP’s performance variables earned the
following scores:
HP’s decrease in customer satisfaction and loyalty
earned them a score of 3. Despite Meg Whitman’s
positive outlook on stability in the future, the
corporations’ obvious lack of leadership consistency,
seen through the corporations four appointed CEO’s in
the past 10 years, earned them a 2.5 score. In regards to
stimulating the employee environment, HP currently has
many encouraging programs and diversity focused
events, as well as efforts to rid the company of a gender
gap, which earn them a 3.5 score. The fact that revenue
growth, dividend yield, and return on equity were all
lower than the competitions scores as well as identifying
revenue growth as negative this year earned HP a 2 for
healthy finance. The undersupply of corporate spending
on innovation through investments in research and
development earned HP a 2.
After observing the above lack of outstanding scores on
the judgment variables, the arrived outcome is that
Hewlett-Packard is an improvement case. The
company is not perfectly healthy and there are several
techniques that should be taken in order to improve
company performance concerning these critical business
variables.
PHASE 2
19

20. Scenario B: Analysis of
ProblemsInnovation
HP is not unique, they should be more innovative in
order to become a market leader and not a market
follower. HP invests less money in R&D than its main
competitors, so it needs to increase and accelerate R&D
investments. HP needs to focus on more than creating
new products, they should be innovative in all company
divisions and also in the way the reach customers and
employees. The difficulty for HP is that they need to
catch up with the profits lost previous years, so an extra
contribution is necessary. Poor presence in the tablet
market and less investments due to restructuring last
years haven’t done anything good for the company. They
lost competitive advantage.
Customer Image
The relationship between HP and its customers is below
the company’s potential. The brand name HP is one of
global recognition however, not one necessarily
associated with instant intrigue and excitement in the
eyes of the public. The corporation currently facilitates
limited direct interaction between informed HP
employees and their eager customers. This shortfall of
communication and synergy leads to poor customer
knowledge and comfort with products, services, and the
brand itself. The improvement of customer image leads
to stronger brand loyalty through the expansion of a
dedicated customer following that would support HP’s
actions and innovations. In a consumer world that is
shifting away from purchasing technology from retail
Employee Environment
32.5% of the HP workforce is female. This number has
gone down from 32.9% in 2009. It is important to have
diversity in a company, as diversity leads to more
creative ideas and open minds. Studies have shown that
women in the workplace are more empathetic and spark
more creativity in everyday tasks. HP has already taken
some steps to narrowing this large gap such as offering a
scholarship to women who major in and graduate with a
degree in IT security. While this scholarship is a step in
the right direction, HP needs to reach out to women who
haven’t already decided on a career in technology.
Healthy Finance
HP has significantly lower profitability than its
competitors. It is not getting enough money back to
reinvest or payback in dividends for the amount that it
put into its business. Part of the problem results from
unstable management. Stable management creates
shareholders’ trust, transparency and reliability. Without
it, employees work inefficiently towards unclear and
shifting goals. HP’s current strategy is not achieving
acceptable profits and is not being executed well by HP’s
employees. Since HP has many investment needs
currently, its debt-equity ratio does not need to be fixed
until it has extra profits.
20

21. Scenario B: Improvements
Innovation
Innovate Outside of Personal Computer Market
HP needs to invest in new products and research due to
the slowing growth rate of the personal computer market
and rapid technological change. Unfortunately, as of the
2013 SWOT analysis, 29% of HP’s income came from
the PC systems division, especially focused on the sales
of laptops. This market is expected to potentially decline
in the near future. Also, the profit margins on PCs and
other computer hardware are getting smaller and
smaller, which means that their Personal Systems
division becomes more of a weakness than a strength.
Their failed attempt to enter the tablet market also
means that they currently are not capable of successfully
penetrating into that lucrative market which is dominated
by competitors such as Apple and Samsung. Their
competitors such as Apple, Dell, and Lenovo also create
excellent laptops and tablets, making it difficult for HP to
expand on its market share in the personal computers
market. The company needs to focus on innovation
because of the rapid technological change, and many
industry professionals consider HP as being behind
many of its competitors in terms of quality, price and
technological advancement of some of the products.
Cloud Based Services
HP should continue to focus on cloud based services,
and potentially widen their market share. The
company announced in May of 2014 that it will spend
$1 billion over the next two years in research and
development in this division. Currently, HP offers a
wide variety of cloud services and appears to be
doing fairly successful, however, IBM still beats the
company in the eyes of the majority of businesses.
This is a very rapidly growing market, expected to
grow 22% each year through 2020. An IDC
(International Data Corporation) survey of more than
400 enterprises indicated HP as one of the top 3
cloud service providers, along with IBM and Cisco.
HP needs to continue investing in these successful
services in order to keep up with technological
change.
Sprout
HP’s newest product Sprout, which was released in
the US November 9th 2014, contains a touch-
sensitive mat which can project 3D interface objects.
The computer costing $1899 is a multimedia station
that has a built in projector and scanner. Use of your
hands is crucial to moving objects around and
creating art, modifying scanned objects, etc. It is a
very unique and ambitious product that attempts to
blend the physical and digital worlds, and was
PHASE 3
23

22. Scenario B: Improvements
Customer Image
One possible solution to improve HP’s image in the eyes
of consumers is through the creation of Hewlett-Packard
brand retail stores. At these locations, HP could create a
forum to display all of the products and services they
offer, while building a stronger connection with the
consumer market. These stores would provide a
personalized setting for the corporation to show off
product benefits and initiate hands-on interactions in a
positively controlled environment. HP currently has weak
control over its retail sales, through the use of medium
vendors such as Best Buy and Staples. In an HP
merchandise shop, the consumer would have the ability
to compare HP products with other HP products, which is
not the case in retail stores such as Best Buy where
products are compared with their competition’s offerings
that are striving to fulfill the same customer need.
Potential HP brick and mortar buildings would offer
consumers a setting to connect with an HP specialist “in
house” where they could help customers to decide which
products would best suit their merchandise wants and
needs, while answering any questions they have, and
resolving any issues or concerns. Employees could
teach the basics and make the experience with HP
creations as simple as possible. Even in the case where
companies design products that are simple to use, the
wide range of desired use of technological goods
frequently creates complexity. Due to this fact,
These locations would also generate demand for products
through customers seeing new creations and interacting with
them to learn benefits that they were unaware of prior to
demonstrations. These stores improve brand image and a
corporation’s relationship with new as well as repeating
customers. “Customers shouldn’t think of your business as a
place to buy a product or service. It should be a fun place to
be!” – Richard Branson
One of HP’s main competitors, Apple Inc., has had great
success with its own retail stores. In 2009, when retail sales
declined around 2%. Apple’s retail sales rose roughly 7%. In
2010, Apple’s about 15% of its revenues of $76.3 billion,
compared to the overall retail industry’s sales growth of 4.5%.
The stores provide a chance for staff to present a solution for
the customer to take home today. The Apple retail store is the
most profitable store on the planet, with the Average store
generating $5600 per square foot and attracting more than
20,000 visitors per week. You don’t simply go to an Apple
store to pick out your computer; you go to pick out your Mac.
“The [Apple Store] staff isn’t focused on selling stuff. It’s
focused on building relationships and trying to make people’s
lives better” – Ron Johnson former Apple Senior VP of Retail
HP should implement this technique to put a spotlight on their
strengths, which are their products. The tech-giant should
open up a select amount of their own retail stores across the
globe to distribute products and expand brand loyalty and
PHASE 3
21

23. Scenario B: Improvements
Employee Environment
High School Partnership
In addition to reaching out to college age women, HP
should reach out to high school students. Many high
schools are moving towards using technology in the
classroom in order to teach the students. HP should
partner with these schools and offer discounted or free
products to these schools and students. Introducing HP
products to the students would benefit the company by
spreading awareness of their product and also spreading
awareness of their company. HP should visit the schools
they have aided and give talks to the students about the
importance of women working in the field of technology.
This would encourage more females to go into the field,
which would increase the number of women applying for
technology jobs, thus giving HP more opportunities to
hire women in the coming years.
Club Outreach
HP needs to reach out to women at a young age. Many
schools have Women in Technology clubs, which
encourage young women to enter the technology field
and work for technology companies. HP should reach out
to these clubs, and offer presentations to the young
women about their company. This would attract females
to apply to HP when they are looking for a job.
Career Fairs
Another way HP should reach out to graduating females
is by going to college career fairs. HP may not be able to
go to a fair at every college, so they would need to target
schools with high percentages of women in technology
majors. This would encourage more women to apply to
HP when they are looking for a job after graduation.
PHASE 3
22

24. Scenario B: Improvements
Healthy Finance
Solutions
Profitability may be enlarged by increasing sales,
decreasing costs, and making the whole company run
smoother. These solutions focus on making HP run
smoother. The company’s leadership has been
characterized by a great deal of change that needs to be
stabilized to aid profitability. Meg Whitman and Dion
Weisler will each lead the newly formed HP Enterprise
and HP Inc. respectively, and HP must remain consistent
with this leadership. . Stable leadership in line with clear
goals will enable and empower employees to work
harder and more effectively. HP can get more return on
the equity invested in them this way. Whitman has a plan
to bring employees back to the office where they will be
close to their supervisors and in addition feel personally
responsible for the company. Employees and team
members need to be present to absorb the new direction
of the company and feel like they are integrated with the
change.
The strategy HP employs needs to be rethought. To
increase profitability, HP should focus more on its
leadership style and ability to communicate its strategy to
its employees. Weisler could have a blog that employees
could follow to stay up to date on the company’s
strategy. Whitman has already given the example of
starting up a blog. They could both post a weekly video
so employees would feel informed about where the
Evaluation of Solutions:
After HP has gone through so much leadership change,
it is time for some stability. Constantly having new
leaders with new views and ideas is harmful to a
company because employees will struggle to keep up
with what their current objectives should be. It is hard to
aim at a target that is continually shifting. However, this
solution is not perfect. Having one leader will not solve all
of HP’s problems. The future cannot be predicted and if a
leader is harming the company, it may be worth it to
break the stability to remove them.
Increasing sales and cutting cost is important, but to
achieve success it is necessary to have a strong
company. Simply cutting one cost will not increase a
company’s long term profitability. Whitman’s solutions to
profitability have flaws also. It is easier to communicate
to people in-person, but this proximity will not force the
adoption of ideals. Additionally, eliminating the ability to
work from home will cause some employees to quit and
some customers to question why a tech company finds
online communication ineffective for internal use.
While communicating with employees is not the most
direct or fastest way to address the profitability problem,
it may be one of the most effective. HP has the
resources and potential to thrive if it can operate at its full
potential. A large number of capable people working
towards the same goal with a strong strategy leads to
PHASE 3
24

25. Action Plan
Setting Goals
The action plan for HP focuses on the four problems we
discussed before: Customer image, skills, gender gap in
the employee environment and profitability. As an
improvement case, we have created specific
recommendations are given for each of these four
problems. If HP wants to survive in a highly competitive
environment they should consider introducing following
recommendations.
Innovation
HP should continue to innovate in cloud based services
and introduce new products into the technological field.
Each division will strive to release two new quality
products by 2018. Focus in research and development is
crucial to achieving this goal.
Customer Image
By January 1, 2017 introduce 4 Hewlett-Packard brand
domestic retail stores to improve communication with
customers. Through these locations, HP specialists will
focus on customer relationships and implement
straightforward marketing in order to build a solid
company image.
HP will create a department within each store consisting
of 3-4 specially trained experts forming a new customer
assistance service named “HP made EZ.” These
specialists will be easily accessible to help customers
Gender gap in the Employee Environment
By 2020 partner with 20 elementary schools, 20 middle
schools, and 20 high schools to bring HP technology into
the classroom through their products in order to instill a
positive image of the company in a future market. This
strategy will create relationships and foster the growth of
diversity for HP. The corporation should recruit at
colleges with a high percentage of female students in IT
programs. As well as offer a new scholarship each year
in a variety of technology fields.
Healthy Finance
HP should work to have positive revenue growth by the
end of the fiscal year in 2016. This positive growth
should continue in the years to follow to maintain long-
term success and follow Meg Whitman’s vision.
In order to build internal communication leading to
increased profitability, Meg Whitman and Dion Weisler
should release weekly videos informing the employees of
any changes. Every six months they should distribute a
survey to all employees asking for suggestions for the
future and feedback on current predicaments and
successes.
PHASE 3
25

26. Conclusion
The purpose of this group assignment for the
‘Introduction to Management’ course was to apply seen
theories and concepts to a real company, in this case
Hewlett Packard. After an accurate analysis, consisting
of both financial and non-financial data, of Hewlett
Packard and going thoroughly through the structure and
the culture of this company, some final conclusions can
be written.
The variables discussed: innovation, employee
environment, management excellence, customer
relationship and healthy finance make a company
healthy. We decided to consider HP as an improvement
case because of the lack of investments in these five
variables. HP has to invest more in R&D and keep up
with the competitors when creating new products or
services. HP employees should be thrilled to work for an
organization that has a lot of possibilities ahead,
especially in the field of R&D. The management has to
make sure that their employees aren’t demotivated
because of constantly changing management, so HP
managers have to guard the management continuity.
Satisfied consumers who are willing to buy HP products
and to use HP services make sure that the company can
continue to exist and expand.
HP grows because of these consumers and in this way is
able to reach a healthy financial state, which is important
with regards to attracting new investors. The money from
We defined HP as an improvement case, rather than a
best practice case. Four specific problems within the
company were found. These problems integrate all of the
five variables and are the basis of the final action plan
HP should consider to apply. Skills, customer image,
gender gap and profitability are domains HP has to work
on in the future. HP should try to change, whilst carefully
evaluating these changes so unnecessary stress is not
added to the organization. It is important to have on-
going correspondence with feedback and iteration to
adopt new views and create accountability. Only with
change can HP reach more profitability and improve its
skills. Fortunately HP has a CEO, Meg Whitman, who
understands the new way of thinking that HP needs:
“When it comes to speaking with customers, I want to
know the good, the bad and the ugly. If we’re performing
well, I want to know how we can replicate it across the
company. If we’re falling down, I want to hear about it so
we can fix the problem immediately. And if we lose a
deal, I want to learn where we came up short so it
doesn’t happen again”
In conclusion, HP is a company with a tough past but a
bright future. They need to cement their good decisions
and create new opportunities that will bring them closer
to the competition and eventually surpass them.
26

27. Sources
• http://www.lesechos.fr/18/07/2014/LesEchos/21731
-038-ECH_bill-hewlett-et-david-packard--binome-
de-genie.htm
• http://finance.yahoo.com/q?s=HPQ
• http://www8.hp.com/us/en/hp-information/index.html
• http://www.schaeffersresearch.com/marketcenters/o
ptionscenter/content/hewlett-
packard+company+hpq+is+another+multi-
year+peak+ahead/default.aspx?ID=122715
• http://www.pcworld.com/article/2687012/report-dell-
hp-held-merger-talks-with-emc-as-pc-hardware-
makers-scramble-to-get-out.html
• http://www.forbes.com/profile/meg-whitman/
• http://www.cnbc.com/id/100484758#
• http://fortune.com/2012/05/08/how-hewlett-packard-
lost-its-way/
• http://it4sale.nl/wp-content/uploads/HP-products.jpg
• http://www.forbes.com/sites/ericsavitz/2013/01/17/h
p-sharply-underspending-on-rd-moodys-finds/
• http://h30261.www3.hp.com/phoenix.zhtml?c=7108
7&p=irol-reportsAnnual
• http://h30261.www3.hp.com/phoenix.zhtml?c=7108
7&p=irol-newsArticle&ID=1959911
• http://www8.hp.com/us/en/hp-information/global-
citizenship/social-investment.html
• http://www.rankingthebrands.com/The-Brand-
Rankings.aspx?rankingID=85&nav=category
• http://www.hp.com/hpinfo/socialinnovation/communi
ty.html
• www.ycharts.com
• http://www.uvm.edu/wid/writingcenter/tutortips/buss
ample.pdf
• http://www.businessinsider.com/hp-from-healthy-
profits-to-help-please-2012-11
• http://www.infoworld.com/article/2621240/techology
-business/management--business-issues-weigh-on-
hp.html
• http://fortune.com/2012/02/10/hp-same-issues-
different-year/
• http://finance.yahoo.com/news/key-moments-
hewlett-packards-recent-history-204439968--
finance.html
• https://www.linkedin.com/today/post/article/2013022
5195955-71744402-taking-on-a-turnaround?trk=mp-
reader-card
• http://www.forbes.com/sites/georgeanders/2013/05/
22/meg-whitman-jolts-hp-as-its-reluctant-savior/
• http://www8.hp.com/us/en/hp-information/global-
citizenship/society/hppeople.html?jumpid=reg_r100
2_usen_c-001_title_r0002
• https://www.neumann.edu/academics/divisions/busi
ness/journal/Review2011/Gregory.pdf
• http://www.investopedia.com/terms/d/debtequityrati
o.asp
• http://info.rdioutsourcing.com/bid/209948/Customer-
Retention-Statistics
• http://blog.clientheartbeat.com/why-customer-
satisfaction-is-important/
• https://www.linkedin.com/pulse/article/20130624185
716-71744402-put-customers-at-the-center-of-your-
organization?trk=mp-reader-card
• http://www.theacsi.org/index.php?option=com_cont
ent&view=article&id=149&catid=&Itemid=214&c=He
wlett-Packard
27

28. Sources
• http://www.macobserver.com/tmo/article/apples_p
c_phone_support_satisfaction_leads_dell_hp
• http://servers.findthebest.com/
• http://www8.hp.com/lamerica_nsc_carib/en/hp-
news/press-
release.html?id=1294584#.VE9kL3duV8w
• http://www.consumerreports.org/cro/electronics-
computers/computers-internet/printers/all-in-one-
printer-ratings/ratings-
overview/selector.htm?recommended=true&brand
=Brother&brand=Canon&brand=Dell&brand=Epso
n&brand=HP&brand=OKI&brand=Samsung&Cate
gory=All-in-
one%20inkjet%20printers&Category=All-in-
one%20black%20and%20white%20laser%20print
ers&Category=All-in-
one%20color%20laser%20printers&sortBy=attribu
te163193
• http://finance.yahoo.com/q?s=HPQ
• http://www.statista.com/topics/1122/hewlett-
packard/
• http://www.hp.com/country/us/en/hho/welcome.ht
ml
• http://www8.hp.com/us/en/hp-information/global-
citizenship/society/hppeople.html?jumpid=reg_r10
02_usen_c-
001_title_r0002https://www.neumann.edu/academ
ics/divisions/business/journal/Review2011/Gregor
y.pdf
• http://finance.yahoo.com/q/ks?s=HPQ+Key+Statistic
s
• http://finance.yahoo.com/q/ks?s=LNVGY+Key+Stati
stics
• http://finance.yahoo.com/q/ks?s=IBM+Key+Statistics
• http://finance.yahoo.com/q/ks?s=AAPL
• http://www.securedgenetworks.com/industry/k12-
education
• http://techconnectwv.org/events/women-in-
technology-a-formula-for-success/
• http://www.makeuseof.com/tag/hp-offers-
scholarship-of-250000-dollars-to-women-studying-it-
security/
• http://www.workforce.com/articles/by-adding-more-
women-to-its-workforce-hp-sees-customer-needs-
more-clearly
• http://www8.hp.com/us/en/hp-information/global-
citizenship/data-and-goals.html
• http://www.ft.com/cms/s/0/1fc8a3dc-0d65-11e2-
97a1-00144feabdc0.html#axzz3I6V8RIhM
• http://www.nasdaq.com/article/hewlettpackard-
company-hpq-new-analyst-report-from-zacks-equity-
research-zacks-equity-research-report-cm317375
• http://www.reuters.com/finance/stocks/companyProfi
le?symbol=HPQ.N
• http://qz.com/117664/hewlett-packards-biggest-
innovation-is-its-plan-for-managed-retreat/
28