Swot

Hewlett-Packard SWOT Analysis

Strengths

Hewlett-Packard is a global technology company and after its merger with Compaq it became world's biggest computer hardware and peripherals company in the world, ranking 20 in the Fortune 500 list. Company is doing business in more then 170 countries including the ones that are developing and under-developed. Being a large company gives HP many advantages like dominating the market for printers, both laser and inkjet, and both for consumers and companies using the economies of scale. The company is also taking an active role in developing the capacity of new markets all around the world, engaging with other multinational corporations, non-governmental organizations and other world governing bodies to reignite the competitiveness at home and abroad through policies and strategies that can support free-market economies. This is one of the reasons that makes HP a leading technology company in the growing IT markets (HP Annual Report, 2003).

Hewlett-Packard generated nearly $6.1 billion in cash flow from its operations and increased its cash and equivalents by 3 billion in 2003 (Datamonitor, 2004). Debt levels in this year were also very low which was significantly lower then the previous year. This is a great advantage which enables the company to increase its investments.

HP always recognized the need to compete in global markets. Product diversity of the company is another big advantage that enables the company to hold its position even in the times of recession. As long as the products are good and have reasonable prices there will be a demand. Company has a product span from calculators to laser printers , from notebook computers to servers. The company has a long history of inventions and innovations until it came to this stage. Research and Development (R&D) is foucused on key growth areas like rich digital media, mobility, management softwares and security. HP knows that enterprises and consumers might have different needs, but the technology requirements to meet those needs are usually the same. HP labs continue to research future technologies such as nanotechnology to ensure that the company is investing in longt-term growth and competitiveness.

After the acquisition of Compaq the new company formed four new divisions including enterprise systems group, imaging and printing group, HP services and Personal systems. This gave the opportunity to the company to broaden out the product line so that it could have a compelling offering against (International Business Machines) IBM and (enterprise content management) EMC companies (Connor, 2002).

There is a shared sense of mission among the employees at HP. The company is also one of the first corporations in U.S that used the "management by objective" approach. "Management by objective is an art of management and technique whereby the actions of analysis, direction and control are focused on the end result" (Trautmann , 2003). Executives in HP also created an informal workplace which encouraged employees to use their first names. They visited as many departments as possible without appointments and scheduled meetings and talked with line workers as often as with managers in order to understand the operations. The company endorse the idea that employees have as valid interest in the performance as do shareholders. This gave the company a unique strength among its competitors.

Hewlett-Packard has a strong position in Europe unlike many of its competitors. The company focuses on expanding its sales of PC market using its satellites in Geneva, Switzerland and Boeblingen, Germany. The company is expecting to remain dominant computer vendor in this region for a long time by increasing the investments to develop its satellites.

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