Hewlett-Packard CompanyA is an American basedA information technologyA administration. The company was founded in a garage in by friends, Bill HewlettA andA David Packard, and is now the market leader in its industry. HP specialises in fabrication and developing computer science, informations storage, networking hardware, presenting services and planing package. HP primary markets are families, little to medium sized endeavors and concerns straight every bit good as through on-line distribution, consumer electronic retail merchants, package spouses and major engineering retail merchants. HP besides operates a services and confer withing concern integrating its merchandises ( Shawn, 2007 ) .
2.1 SWOT Analysis – ( Internal & A ; External )
Strengths ( Internal )
Strong Market PositionA – The recent edition of Forbes top 2000 companies has HP listed as the biggest maker of computing machine hardware in the universe and 43rd biggest company overall with an estimated market value of $ 90.3 Billion dollars in 2011 ( Forbes, 2011 ) . This continues a tendency that saw the company easiness base on balls the old planetary personal computer leader Dell in 2006.
Outstanding Brand Name RecognitionA – Hewlett Packard is one of the universe ‘s most well-known and recognizable computing machine trade names. In a worldwide planetary trade names comparing by Interbrand, HP ranks as the ten percent overall most recognizable trade name in the universe ( Interbrand, 2010 ) .
Successful Strategic AcquisitionsA – Hewlett Packard continues to seek strategic acquisitions. The company ‘s major amalgamations and acquisitions in recent past include Compaq Computer Corporation in 2002, Mercury Interactive in 2006 and Electronic Data Systems Corporation ( EDS ) in 2008 and 3Com in 2009, which notably is a supplier of computing machine web equipment, which plans of an assault on the market leader in networking, Cisco Systems. Computer networking is a high growing market with high net income borders and small competition.
Failings ( Internal )
Fiscal dependence – HP ‘s fiscal status is really dependent on the province of the world-wide economic system as consumer electronics are really monetary value volatile.
R & A ; D – HP ‘s research and development section has in the past few old ages, invested significantly less in comparing to old old ages in comparing to its historical disbursement. This issue could impact HP due to the of all time changing nature of its concern environment if they fail to maintain up with rapid traveling progresss.
Pay cuts – Throughout the restructure of HP wage cuts have been implemented in order to cut costs amongst the administration this has brought lower morale to employees, which can take to cut down productiveness if non managed right.
Third party providers – HP depends on third-party providers, therefore its gross and gross border could decrease if it fails to right pull off it providers.
Opportunities ( External )
Expanding presence in cloud calculating marketA – Cloud computer science is the following major avenue for IT services. In July 2008, HP along with Intel and Yahoo! created a planetary, unfastened beginning trial bed for cloud calculating research and instruction. The increasing demand for cloud computer science is likely to make demand for HP ‘s solutions in approaching old ages. The planetary disbursement on cloud computer science is forecast to traverse a value of over $ 40 billion by 2012
Expanding portfolio of imaging and publishing solutionsA – Hewlett Packard has made several strategic acquisitions and introduced new merchandises in the imaging solutions section in recent times. Its imaging solutions scheme entails the commercial markets, from print services solutions to new growing chances in commercial printing and capturing high-value pages in countries such as industrial applications, out-of-door signage, and in writing humanistic disciplines.
Menaces ( External )
Projected lessenings in the IT marketsA – Forecasters predict a lessening in the world-wide demand for assorted IT merchandises offered by HP. The economic lag has negatively affected many market sections, including information engineering. Hewlett Packard has experienced this diminution in most of its planetary markets.
Highly competitory environmentA – Although Hewlett Packard is presently the market leader, it operates in a extremely competitory market, with other strong rivals such as Dell, Toshiba, Lenova Group and Acer. It competes in footings of monetary value, quality, trade name, engineering, repute, distribution and scope of merchandises, among other factors. In some parts, the company faces competition from local companies and from generically-branded makers.
3.0 Structural Issues
There are few cardinal structural issues evident in this survey, which are damaging to the HP administration.
The first cardinal structural issue confronting HP in this instance is the battalion of beds which were apparent within the administration. These extra and unneeded beds of direction non merely make increased bureaucratism within the administration but besides ( as quoted in the instance survey ) can be “ confusing ” for both clients and workers likewise. Increased direction beds besides lead to slower communicating between sections, as it was stated in the instance that it “ one time took three months to acquire blessing to engage 100 gross revenues specializers ” . This structural job ensuing in slow communicating can be extremely damaging to an administration such as HP, who relies greatly on their gross revenues section to sell their merchandises to corporate clients.
Before grade Hurd ‘s assignment as CEO of HP, the former leader, Carly Fiorina, had Hewlett Packard structured in a complex matrix construction ( Ricadela, A, 2006 ) . The matrix construction formalises horizontal squads and along with the traditional perpendicular hierarchy, with many administrations happening it difficult to implement due to its confounding double authorization ( Daft, 2009 ) . This construction created bleary answerability lines and well slowed the determination doing procedure in HP, taking to important communicating jobs within the administration.
The fact that sales representative were “ typically passing merely 33-36 per cent of their clip with clients ” , was another cardinal issue confronting HP when Mark Hurd took control of the company. This shows strong structural issues within the company due to the fact that workers spent the remainder of their clip “ negotiating internal H-P bureaucratism ” , and were frequently burdened with “ administrative undertakings ” . For primary functions as sales representative, 33-36 % of clip spent with clients is non optimal, and needed to be addressed. The fact that less than 60 % of a 17000 strong, corporate gross revenues team really sold to clients is besides dismaying. After Hurds organizational alterations were implemented it was estimated that 40 % of the gross revenues people ‘s clip was being spent with clients up from 30 % in the old twelvemonth. For sales representative, 40 % of their clip is still a startling figure and still needs to be improved farther.
4.0 Discussion of ways to assist work out some of the structural issues
There are few possible ways to travel about work outing the structural issues in which HP faced in this instance.
The first possible manner of assisting work out the structural issues faced is by flattening the administration out and taking unneeded beds in the hierarchy of bid. When Hurd took control he eliminated 3 beds of gross revenues direction. There are many benefits of accommodating a more level organizational construction which include the decrease in rewards and overhead and the increased communicating flow up and down the hierarchy from the lower line employees to upper direction.
Simplifying the confusing matrix construction into a more distinct divisional construction is besides a possible manner of work outing the communicating, and gross revenues issues confronting HP. This would work out the job of the corporate clients non cognizing who to name at HP, as each line of merchandises is aligned with its ain division and hierarchy. Thus it eliminates the “ double authorization ” seen in the old matrix construction, and removes the confusion of who to reach at the administration. Hewlett Packard was built from the ground-up with this divisional construction and it has been extremely successful in the yesteryear ( Daft, 2008 ) . Advantages of the divisional construction include flexibleness and reactivity to environmental alteration, due to each smaller divisional unit being better tuned into its environment and increased consciousness of clients ‘ demands due to employees concentrating on a individual merchandise line ( Daft, 2010 ) . Both are of extreme importance in the rapid traveling engineering industry, where new discoveries are made every twenty-four hours.
Clinching clients through gross revenues is an of import portion of HP ‘s organizational operations. This requires its sales-team to be proactive about ever seeking out new clients, and fliping new merchandises to corporate clients. Hurd increased his sales representative ‘s clip with clients from 30 % -40 % , although it can be argued that farther betterments still need to be made in respects to this issue. A survey conducted in 2010 by planetary consulting house, Watson Wyatt Worldwide, concluded that the universe ‘s top acting companies spend on mean 40 % more face clip with its best clients than those at lower acting companies ( Meirita & A ; Hanifiah, 2010 ) . Therefore to increase its gross revenues attempts farther, HP must force to increase its face clip with its key clients even further and scale back administrative undertakings to be successful in this country.
It has been stated that administrations with a weak client service way tend to pull off by bureaucratic regulations ( as stated in the instance ) , which limit perceptual experiences of authorization by either salespeople or clients ( Anderson & A ; Huang, 2006 ) , nevertheless administrations with a strong gross revenues force have few bureaucratic controls and by and large let go of negociating power to gross revenues staff and clients, therefore giving them a sense of control ( Anderson & A ; Huang, 2006 ) . For this to alter in an administration, sales representative must be rewarded and encouraged, to exert autonomy when interacting with clients.
5.0 Conclusion and Recommendations
Before Mark Hurd ‘s assignment, Hewlett Packard was confronting major structural and communicating issues. The matrix construction introduced by Hurd ‘s predecessor, Fiorina, was both confounding to HP ‘s top corporate clients, and caused unneeded sums of bureaucratism within its gross revenues squad, which had an ultimate end of sealing gross revenues trades. It besides confused communicating channels which slowed the determination doing process therefore doing HP slightly inefficient in its gross revenues attempts.
This study recommends that the undermentioned actions be taken:
Revert HP back to a divisional construction, which facilitates greater communicating throughout the administration, gives clients clear cognition of who to reach about relevant issues and is successful in unstable environments such as engineering.
Flatten out the organizational construction and take unwanted beds of direction, which obstruct the communicating channels and increase bureaucratism, costs and operating expense.
Increasing sales representative ‘s face clip with cardinal clients and taking unneeded administrative undertakings, in an attempt to increase gross revenues involvement and gross. A survey concluded that the universe ‘s top administrations spent on mean 40 % more clip with cardinal clients than lower acting companies.
If these schemes are implemented it should greatly increase communicating and gross revenues efficiency therefore giving HP a much greater opportunity of retaining its topographic point at the top of the information engineering industry.