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Hp pc strategy


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Hp pc strategy

  1. 1. Team 9: Hewlett-PackardAshvin Jasvantlal ∙ Yizhao Tan ∙ Aniket PatankarMS&E 274 – Final Presentation
  2. 2. Current HP2
  3. 3. Causes of Stagnation – PersonalSystem SegmentTwo sided network effect reduced to zeroMany similar competing platforms carried by Retail channelsSupporting Ecosystem Shared with CompetitorsNo disruptive innovation. Incremental innovation can be easily imitatedDesired Form Factor Rapidly ChangingPlatform:HP Laptop/PCUsersSoftware / OSDeveloperse.g. MicrosoftChipsetmanufacturerse.g. Intel3
  4. 4. Causes of Stagnation – PrintingSegmentValue Chain Business ModelDiminishing Value for Downstream Customers w/o rapid InnovationOld Vision + Weakening Holder -> Eroding revenuesShrinking Customer BaseHP PrintersCartridgesVendorPrinter PageManufacturersDistributors/Retailers customersupstreamValue toDownstreamcustomersValue added by agents within the value chainSupply chainlogisticContinue improvingAlong this pathLeads to stagnationPrinter PartsManufacturers4
  5. 5. Core Competencies - VRINHP’s CoreCompetenciesValuable Rare In-imitableNon-substitutablePersonalSystemsGroup• Profits &Revenues.• High Quality.• Broad portfolio.• Unmatchedproducts.• PSG’s R&DCapabilities that isunderutilized• Knowledge inmarkets.• Portfolio is diverse• Knowledge is well kept andacquired with industryexperience.• Diverse products andpartnerships are unique.• Printers have littlesubstitutes.EnterpriseSystems• Major share ofrevenue andgrowth rate of 11%.• Valuable directsales channel.• High Efficiency andclient satisfaction.• Strong Holder.• Strong technicaland knowledgebase.• Direct sales ofproducts topartners are alsomore streamlinedthan competitors.• ES’s technical knowledgebase is accumulated withyears of industry experience.• It will take years for anoutsider to gain theseknowledge and intellectualcapital.• Strong support network toenterprise customers• ES: Enterprisescontinue to rely onvendors like HP’sES to providesolutions , systemsandtroubleshooting.5
  6. 6. Bright Side for HP PC & PrintersOne of the top performing product lines still are from PersonalSystems & PrintingDesktop Sales UP 10% Y/Y, Consumer Grade Printers Revenue UP15% Q/QContinuing Product Demand & Recognizable Value in the MarketPerhaps the only company that offers products in every segmentof computing from data center to devicesCustomer’s feedback: Want to see HP as a single / un-splitcompany so long as they prove “Together is better”6
  7. 7. Knowing Your Customer’sChanging NeedsPersonal Computing PrintingTablets, Portable Smart Devices Books/Content on DemandCurrent PCs to becomecommodity PC, like TVIntegration With Digital Contentfor publishersWearable Devices, informationappliancesFlexibility, permitting last minutechangesHigh Customization, EmbeddedComputing in appliancesHigh definition Media / 3DGesture Based I/O, AdvancedHuman Computer InteractionGrowing multimedia printingfootprint7
  8. 8. SWOT AnalysisStrengths WeaknessesThreatsOpportunitiesInternalExternal• Globally Recognized Hi-tech Brand• Expertise in developing personalsystems, printing & enterprise hardware• Well established supply chain• Web technology based productmarketing and sales• 24/7 Customer support• Volatile Management & historicallywrong business decisions• Lack of in-house managementconsulting division• Underutilized intellectual capital• No aggressive investments in R&D• Less global coverage• Growing demand for smart devices &information appliances• Need for one stop shop forintegrated software & hardware• Target the aging market segment –their generation knows HP• Joint Ventures in new areas• Incumbent Competitor with lead intime & customer base• Competitor’s superior technologyand pricing• High availability of substitutes• Ecosystem Partners turningcompetitors e.g. Microsoft8
  9. 9. Recommendations9
  10. 10. Maintain HP as OneTwo different strategies:A. Maintain HP as single company andfurther develop new areas (Whitman)B. Split HP Personal Systems Group andEnterprise Systems (UBS Analyst)Current strategy by Meg Whitman is“Together is better”Our team agrees on:Recommendation A – Keep HP as One10
  11. 11. Strengthening Grabber-Holder StructureLeverage Strategic Assets to provide Pivot• Financial Strength : $40 Billion in cash• Industry Knowledge & Expertise, Large Workforce• Infrastructure: buildings, equipment, production facilities• Extensive pre-sales & post-sales supportKeep Committed Agents• Ecosystem Partners with Strong relationships e.g. chip manufacturers, suppliers andsoftware vendors: Intel, Microsoft, others• Trusted Suppliers, Distribution Channel Partners, productionIncentivize Opportunistic Agents• Build New Customers: Brand Aware customer base outside of US• Build New Suppliers: New Chipmakers, Other OS Vendors• Provide Platform for New Software Developer CommunityNew Value Proposition based on Innovations• Disruptive Innovations in design based on new chips and new OS e.g. Wearable Devices• Incremental Innovations in production & distribution of new productsBeach head to validate the idea: HP Slate 7 Chromebook11
  12. 12. (1) Latecomers Strategy:Tablets, Smart DevicesStrength of AppleTrademark DesignWorld Class User ExperienceHigh Price Point for ExclusivityClosed Platform: iOSHigh end hardware featuresStrategic assets to supportDesign, EngineeringHigh Production CostHigh Operational Expenses onMarketing, Sales, RetailHigh Requirement to improve rapidlyMarket Share, Brand valueHigh Market Visibility & Subject toconstant scrutinyHuge Expectations, High sensitivitytowards product defectsHigh fluctuationFlip Side of Incumbents StrengthCustomizable Designs, Variety of formfactorsPlatform for Software As A ServiceLow cost, LightweightOpen for Multiple OS SupportStrategic assets to supportStrong partnershipsIntegrate services from various vendorsBecome Marketing, Sales for each otherBuildNew Suppliers, Customers relationsUnknown suppliers that make qualitychipsetsHelp them to design and distribute newproducts suitable to your platformLeverage knowledge in traditional PCcustomers to create excitement12
  13. 13. (2) HP Personal Computing:New Vision, New PlatformHP PCMicrosoftWindows,Intel(Old Platform)USConsumersHPPersonalized /Wearable Devices(New Platform)New Vision: Platform For Software As A ServiceStagnantOld Vision: Desktop, NotebooksFor ConsumersGlobalConsumers,Enterprises,IT DecisionMakers+HPServicesMultipleOS VendorsMultipleChipsetsApp DeveloperCommunity+13
  14. 14. HP PC : Dynamic Support and Push CycleChip producer(performance)Pivot(Assets inPC, Notebooks)Growing Market Interest +Investment in Tablet, Wearablecomputing chipset startupsApplicationsDeveloperCommunitySupportingApplicationsDeveloperCommunityTablet peripherals,Touchscreen,CameraElectrical componentsMulti Vendor/Open SourceOSSupportingGrowing Market Interest +Investment in operating systemsFor smart, personalized devicesHP SmartDevicesSupportingHP Investment in R&D forIncremental innovation inPersonalized tablets / smart devicesWearable Devices(performance andcoverage)Repeat cycleSupportingHP Investment in R&D forHuman Computer InteractionTo design gesture oriented /Wearable devicesDisruptive Innovation14
  15. 15. (3) Develop 3-d PrintingForbes predicts this to be a $ 3.2 billionindustry by 2016.Existing infrastructure could allow HPto reduce retail price (effectivegrabber)Reduce stagnation by entering thegrowing segment15
  16. 16. OpticalcomponentmakersSoftwaresuitesMultimediaenhancerssuppliersHP SmartPrinting PlatformHP 3D PrintersManufacturingIndustryPersonalusers Retailers(Customization)HP PrintingBusiness Model TransformationTwo Sided MarketHP Printerssuppliers customersMediaPersonalusersFilmproductionsMultimediapersonalHigh Def/SpecialeffectValue Chain16
  17. 17. Applying Grabber-Holder to 3-dprintingVision:Bring 3-d printingto the mainstreamBrandrecognition inan unprovenmarketEffective ecosystembetween designersand customersUse existinginfrastructureto keep pricerelatively lowDecreasing price willencourage investorsto enter certainsegments of industryStrong GrabberHolder structure17
  18. 18. HP Printing : Dynamic Support and PushCycleChip producer(performance)Pivot(Assets inHP Printers)Investment inTablet chipset, Wearablecomputing startupsHP 3D PrintersSupportingInvestment by IBMHP SmartPrinting PlatformRepeat cycleSupportingInvested by IBMSoftware vendor(applications)SupportingMicrosoft andVC investorsPC peripheralsPC board, etc.)VC investorsElectric companies183D PrintingTechnology(functional)SupportingInvestment By Multimedia,Manufacturing Industry
  19. 19. (4) Merger as last resortConsider merging with other companiesIf no turnaround within 18 months after acquistionsList of targeted companies:1. Dell2. IBM3. AccentureBenefits of Merger:Grow value chainReduce stagnationNew large customer pool19
  20. 20. Accenture as Merger TargetCurrently, Accenture best fitLeveraging HP systems as Accentureconsulting solutionSynergiesComplimentary expertise/skills set and corecompetenciesAccenture customer base: large market forHPCould be turnaround pivot – bundlingconsulting and server/printer solutions(from just consulting to consulting andimplementation for Accenture)20
  21. 21. 21Thank you