hp case study "Strategic Analysis"

1. CASE STUDY (HP) STRATEGIC ANALYSIS OF “HEWLETT PACKARD CORPORATION”

5. STAGE # 1 INTRODUCTION

9. STAGE # 2 INPUT STAGE

10. IFE (INTERNAL FACTOR EVALUATION MATRIX)

11. Key Internal factors Weight Rating Weighted Score Strengths Brand name Low debt Wide range of innovative products Developing of own hardware and software Web technology used for product awareness & sale 0.14 0.13 0.13 0.11 0.10 4 4 4 4 3 0.56 0.52 0.52 0.44 0.30 Weaknesses Lack of in-house management consulting division Intellectual capital is underestimated No aggressive investment in R & D No good people retention policy 0.10 0.08 0.11 0.10 1 2 2 2 0.10 0.16 0.22 0.20 Total 1.00 3.02

12. EFE (EXTERNAL FACTOR EVALUATION MATRIX)

13. Key External factors Weight Rating Weighted Score Opportunity Expansion of retailed stores for customer convenience Participation in joint venture Make easy to use product for upcoming retirees Computer and cell phone software & hardware 0.11 0.20 0.09 0.12 3 3 2 4 0.33 0.60 0.18 0.48 Threat Competitor’s technology & pricing low compatibility with non- HP product Availability of substitute Less global coverage than competitor 0.14 0.13 0.10 0.11 4 3 4 2 0.56 0.39 0.40 0.22 Total 1.00 3.16

14. CPM (COMPETITIVE PROFILE MATRIX)

15. Critical success factor weight HP DELL CANON Rating Score Rating Score Rating Score Innovation 0.11 2 0.22 4 0.44 3 0.33 Management 0.08 3 0.24 4 0.32 2 0.16 Technology 0.12 4 0.48 2 0.24 3 0.36 Financial Position 0.10 4 0.40 3 0.30 2 0.20 Market share 0.09 3 0.27 4 0.36 2 0.18 Customer loyalty 0.10 4 0.40 3 0.30 2 0.20 Brand name 0.11 2 0.22 4 0.44 3 0.33 Pricing 0.11 4 0.44 3 0.33 2 0.22 Product Quality 0.09 4 0.18 3 0.27 2 0.18 Compatibility 0.10 2 0.20 3 0.30 4 0.40 Promotion 0.08 3 0.24 2 0.16 4 0.32 Total 1.00 3.29 3.46 2.88

16. STAGE # 3 MATCHING STAGE

17. TOWS MATRIX

20. SPACE (STRATEGIC POSITION & ACTION EVALUATION MATRIX)

21. Internal Strategic Position External Strategic position Financial Strengths (FS) Environmental Stability (ES) Return on Investment leverage Working Capital Liquidity Price earning ratio Total Average +5 +3 +4 +5 +4 +21 +4.2 Technological changes Rate of Inflation Price range of Competing products Competitive pressure Barriers to entry into market Demand variability Total Average -3 -2 -3 -5 -4 -2 -19 -3.17 Competitive Advantage (CA) Industry Strength (IS) Market Share Product Quality Customer Loyalty Technological know-how Control over suppliers and distributors Total Average -2 -3 -2 -2 -4 -13 -2.6 Growth Potential Profit Potential Financial Stability Labor cost Technological know-how Total Average +5 +5 +4 +3 +4 +21 +4.2

22. -6 -5 -4 -3 -2 -1 +1 +2 +3 +5 +6 +6 +5 +4 +3 +2 +1 -1 -2 -3 -4 -5 -6 Aggressive Conservative Competitive Defensive IS CA X-axis =CA + IS = -2.6+(4.20) = 1.60 Y-axis = FS + ES = 4.2+(-3.17) =1.03 FS ES

24. BCG (BOSTON CONSULTANTING GROUP MATRIX)

25. Table for BCG Matrix HP division ID SEGMENTS REVENUE % PROFIT % GROWTH RATE % MARKET SHRE % A ESS 19 2 11 0.8 B HPS 17 20 8 0.1 C SOFTWARE 1.4 5 14 0.6 D IPG 29.2 30 8 0.8 E PSG 32 42 -10 0.7 F HPHS 2.2 2 -14 0.2

26. HP BCG Matrix Relative market share Industry growth rate High Medium Low 1.0 .50 0.0 High +20 Medium 0 Low - 20 STARS C A II D Question Mark I B CASH COWS E III DOGS IV F

27. IE (INTERNAL-EXTERNAL MATRIX)

28. Strong 3.0 – 4.0 Average 2.0 – 2.99 Weak 1.0 – 1.99 2.0 3.0 4.0 IFE Total Weighted Score 3.02 1.0 2.0 3.0 Low 1.0 – 1.99 Medium 2.0 – 2.99 High 3.0 – 4.0 EFE TOTAL WEIGHTED SCORE 3.16 i HP ii iii iv v vi vii viii ix

30. GRAND STRATEGY MATRIX

31. Slow market growth Rapid market growth Strong competitive position Weak competitive position Quadrant II Quadrant I HP Quadrant III Quadrant IV

33. STAGE # 4 DECISION STAGE

34. QSPM (QUANTITATIVE STRATEGIC PLANNING MATRIX)

35. Key Internal Factors HORIZONTAL INTEGRATION MARKET DEVELOPEMNT Strengths Weight AS TAS AS TAS Brand name 0.14 3 0.42 4 0.56 Low debt 0.13 3 0.39 2 0.26 Wide range of innovative products 0.13 4 0.52 3 0.39 Developing of own hardware and software 0.11 4 0.44 3 0.33 Web technology used for product awareness and sale 0.10 2 0.20 3 0.30 Weaknesses Lack of in-house management consulting division 0.10 2 0.20 3 0.30 Intellectual capital is underestimated 0.08 -- -- -- -- No aggressive investment in R & D 0.11 3 0.33 2 0.22 No good people retention policy 0.10 3 0.30 2 0.20 Total weight 1.00

36. Key External Factors HORIZONTAL INTEGRATION MARKET DEVELOMENT Opportunities weight AS TAS AS TAS Expansion of retailed store for customer convenience 0.11 3 0.33 4 0.44 Participation in joint venture 0.20 4 0.80 2 0.40 Make easy to use product for upcoming retirees 0.09 3 0.27 2 0.18 Computer and cell phone software and hardware 0.12 3 0.36 2 0.24 Threats Competitors technology and pricing 0.14 4 0.56 3 0.42 Low compatibility with non-HP product 0.13 3 0.39 2 0.26 Availability of substitutes 0.10 4 0.40 3 0.30 Less global coverage than competitors 0.11 3 0.33 2 0.22 Total weight 1.00 Total Attractive Score 6.24 5.02