惠普2010商务环境分析小论文一篇~.doc

IntroductionMany international organizations tend to face the greatest struggle to survive their business in business world during the world economic crisis since the year 2008. All though most of the world financial authorities have confidence to economic recovery, however, many people believe this crisis could be worse, risky and ruinous than any of previous recessions because of the globalization context. How to sustain and promote the business in todays circumstance becomes a challenge. With a focus on business process and future vision of Hewlett-Packard (HP), this question-based case study analyses the opportunities and challenges to HP. Discuss its company vision towards the recession and digital environment by a new leadership. Question 1According to Kondratiev long-waves (Freeman, 1988), the world is currently facing the information and communication Kondratiev, which encountered a booming on computer network expansion and digital data orientation changing. People focus more on networking and integration of design, production and marketing. Technological change is a form of how to solve specific problem in highly differentiated and changeable environment.Hewlett-Packard was founded in 1939. Now it is among the worlds largest IT companies whose products include personal computers, storage devices, printers, and networking equipment. HP provides IT and business process outsourcing, application development and consulting, systems integration as well as other technology services. This comprehensive portfolio helps the company match the right products, services and solutions to their customers individual needs.1 a) The changing technological environment presents challenges to HP in terms of the threat by entry of new competitors, the bargaining power of both suppliers and consumers, threat from substitutions and competition from competitors in the same industrial field whose product has a short product life cycle.1) Competitive rivalry within an industryWith revenue totaling US$118.4 billion, profit US$8,329 million for fiscal 2008, HP has jumped into ranking No.9 in fortune 500. Although its 2008 revenues were influenced by the economic disaster, HPs performance is still impressive with revenue rose 13%. () In changing technological environment, where demands shift and available resources fluctuate, IT companies require the right technology to stay efficient, competitive and profitable. As for HP, its competitors Oracle and IBM used to have separate and distinctive roles in the market. But HP is considered “lack of a distinct position in marketplace.” said D.Levinthal, a management professor at Wharton. Though HP is the largest PC and printer maker in the world, with 41% of the global printer market and 17.6% of the PC market, lacking of differentiation of competitive advantage may leave HP in a situation of not be able to compete with IBM on technology services, or with Oracle on software and face off with Apple on its consumer business. Meantime, HP tend to focus more on corporate technology instead of retailing to gain sustaining competitive advantage on networking organizations in the future 2) Threat by the entry of new competitorsApotheker said software is “the glue” that will hold the company together and allow it to leverage into valued added services. The big challenge is whether HP will have enough options to make that software-as-glue vision reality. Software accounts for only 3% of HPs revenue (Q3 FY2010). However, HP doesnt have a lot of acquisition targets in software, which means it already fell behind some new integration. At the same time, IBM and Oracle have acquired most of them. IBM adds to its software portfolio almost weekly with smaller deals in between larger ones like the Cognos purchase. Oracle goes for acquired Siebel, PeopleSoft, Hyperion and others. Analyst Peter Goldmacher sums up HPs software challenge. “Its fine that Lane and Apotheker are software experts, but there are only so many cards to play.” ()This challenge means HP already has a number of competitors combined as new comers on its target new field of software.3) The bargaining power of suppliersHP purchases materials, supplies and product parts from a huge number of operating partners. Generally, HP is in a dominance position with suppliers and has many options over available suppliers. However, it does rely on sole sources for laser printer engines, LaserJet supplies and parts for products with short life. HP is dependent upon Intel as a supplier of processors and Microsoft for various software products (HP annual report, 2008). From HP official website recently, LaserJet suggested HP to remanufactured Color LaserJet printer toner cartridges in order to reduce $76 less of unit cost than a set of Original HP one which dont meet business customers standards for external distribution. Additionally, Intel is the market leader of the industry with almost 75% of the market and there is no substitute for it. The next company is AMD with 15% market share is so far from Intel. Intel is the leadercompany in determining the price and it doesnt left any opportunities for HP or othermanufacturers to have a direct effect on the supplier policies as 80% of them provided by Intel. ().4) The bargaining power of customers and the threat of substitutionsBargaining power of buyers exists and high when buyers have lots of choice and these choices bring the price down. And also customer can bargain for higher quality or more services. The more buyers have choice the power of buyers is high where they can choose any brand they want like Dell, Acer, Compaq, Sony and more while the bargaining power of customers low when the buyers have only few choices. With the development of the technological environment HP faces constant threats of substitutes or services from othercomputer hardware products; such as, Dell and Apple which are among top competitors as well as those acquisition targets in software which IBM and Oracle did.5) Keep talents and access to the latest informationHP recognizes that the large size of their operations comes with large responsibilities. The ways in which they manage their facilities and conduct their business activities can have far-reaching impacts on the environment. According to the case, the new leadership also faces a challenge of keep the senior talent to stay for HP instead of all of the executives who were in line to be CEO may be snapped up on the labour market. With all the talent that HP has, the company needs to select ways to access to the latest market move and information updating, if not, it will get lost in the massive information sea.1BBasing on the challenges that changing technological environment present, directors of HP should create strategies for the company future operations in terms of the dynamics of the digital environment. IT Value-Add Matrix ModelMcLaughlin (2008) believes that the information system should not only consider the cost of investment, but also should consider the potential added value, because the application of information can provide more market opportunities to the organization as well as enhance its product differentiation.Beware AttackSafe ExploreHighValue-add Low High IT capacity When a company is well connected to the latest dynamics of digital environment, the company can have more potential competitive advantages. In this case, HP should beware of its information channel and keep its own business and innovation ideas secretly. According to previous annual reports of HP, it can take advantage of its strengths on PC and printer market share to add value of its hardware and newly focused software in order to attack other competitors like IBM and Oracle as well as substitute product. As mentioned the development of software of HP, in the IT Value-Add Matrix, explore and R&D is important for HP to survive in the dynamics of digital environment. Basing on case, HP directors focus on updating its software development so they need to invest more on software R&D and acquire software portfolio with high-skilled technicians. High risk leads to low safety on company operations, under global crisis background, HP should consider more positive and negative possibilities before take any risk on operation to avoid uncertainty.Question 2The economic global crisis is reshaping the world political and economical contexts, environment, industries, cultural and social regulations. Even some countries are near default, while others have expanded debt with little solution of how it will be repaid. Jim Scurlock, the vice president in the Global Financial Services Industry for HP said HP shares the widely held view that “todays financial turmoil is historic. It has yet to play out, and its effects will last for years to come.” (Scurlock, 2008)HP is affected by current global financial crisis. It has considered several measures to overcome negative effects of this crisis on its business lines. Thanks to those HP operational measures that will discuss later in this essay, HP has just beat analysts expectations for Q3 with an EPS of $1.03, which analysts were expecting $1. The better performance can be attributed to HPs great management team that understands how to maximize sales, cut costs, effectively run their supply chain and sustain its brand reputation. HP has also restructured their sales force incentive program to promote sales. An HP researcher John Madden was saying “this is a company with great financial discipline, and that certainly helps when the economy takes a tumble.” (report of HP, Q3 FY2008). Despite the good news, the HP stock price is down almost $3 at the end of the November 2008. Under investigation on HPs operations in North American market and its international activities, this company operates in different aspect of the global environment as follows,1) PoliticalA trend observable across all continents has been the shift towards more open markets and away from state ownership and control. This trend has brought greater opportunities for the expansion of business enterprises into wider markets globally. On the other hand, governmental regulation of enterprise has proliferated, adding to the complexity of business activities. HP continuously sustains its long-term sponsorship to governments such as offered millions of dollar to update education system of Asian developing countries to obtain good relationship with the local authorities where it operates.2) EconomicalStephen Jen, a researcher of Morgan Stanley revealed during the recession, the US Dollar exchange rate is increasing while the trend will slow down when other countries took action on economic recovery. However, this trend is unfavourable to multinational companies like HP. The impact is obvious, their products with higher price lead to lower demands as well as low return of investment. In spite of this, HP still aims to qualify their products. A vice president of HP mentioned the importance of keep the brand reputation with high value-added product. As HP slogan changes into “the computer become personal again” means the company focus on differentiating its products and service to avoid washing out to the low-demand market. HP has been cutting its operating costs since 2005 by removing several layers of management, phasing global operations into all of HPs business segments, and outsourcing more production. By mid-2008, more than half of HPs PCs are built entirely by subcontractors. HP also announced that lay-offs will take place and an workforce reduction of about 24,600 () is what is being looked at in order to cut the cost of its daily operations. These measures considerably improved HPs profitability as its operating margin rose from 4.0% in 2005 tend to nearly 10% for the first half of 2008.()3) SocialDuring the recession, people tend to be modest and hesitate toward new promotion of their lives. At the same time of the appointing of new CEO,HP announces made a donation of$5 million to the Newseumfor supporting a special exhibit on the role of social media in the democratization of news in order to meet the social needs on changing information. Michael Mendenhail, senior vice president and chief marketing officer of HP said “This interactive, innovative venture will examine what the changing equation means for the news media and news consumers around the world.” (HP press release, 2010)4) TechnologicalUnder the financial pressure, every industry aims to find new resources and technologies to reduce heavy burden on the expense of innovation and R&D. HP plans on continuing to look for areas where operating efficiency and profitability can be improved, such as the development and installation of its own new IT databases or the improvement of supply chain. In the 2008 fiscal year, the company has invested $3.5 billion in its research programs, including HP Labs and plan to continue to invest in R&D. (HP Services Features, 2008).5) EnvironmentalPeople in the United States are buying less fuel and building fewer houses. This means less building materials such as steel, glassmaterials that are produced using electricity. On the other hand, Pessimists argue that with the financial crisis, there will be less economic activity around the globe within the next few years. This could mean people putting the economy ahead of the environment. In fact, these impacts are appeared not only in the US but also to the whole global village. HP came up with a series of environmental friendly product and service like Global citizenship and low emission energy-saving product. ()Question 31) Contemporary cultural and social changes in North American and other wealthy marketsThe interconnections within the global economy are now much deeper because of the process of globalization. “Globalization is not a force of nature; it is a social process” (Massey, 2000). The world become meeting the material needs of the community in the way that reduce inequality like reducing the trade barriers and doing things without destroy environment like energy saving technological innovations. To some extent, the factors can encourage IT companies entering new markets with a high labour standard and environment regulations, which acquire companies to be more social responsible. Additionally, the wealthy markets continued growth in the traditional enterprise space whilst also opening up new vistas by combining consumer reach with the skills and technology to manage and manipulate an ever-increasing flow of data in the information era. 2) Shaping the operations and future development of a company like HPWealthy markets consumed goods and services produced from low labour standard countries years ago but now things changed. According to a research of World Bank, the export-processing zones are providing safer and healthier work conditions which already attract 14% more inflow of FDI (Drezner, 2000). Under this circumstance, companies would certainly corporate overseas with high labour standard countries.Protestors argued the globalization will destroy the environment; however, the report of Drezner stated after Mexico joined NAFTA, its environment regulations are much more strict and standard than before. This phenomena means international operations can benefit more by environmental friendly strategies. HP is carrying on its “HP environment” programs on social responsibilities, business ethnic and recycled and low emission energy saving products. These actions can provide a promising development of companies.In relation to the updating of the customer demands, companies apparently will focus more on technology innovations. They should recognize and seize opportunities for growth that builds upon strengths and competencies and lead in the marketplace by developing and delivering useful and innovative products, services and solutions.ConclusionUnder the changing political, economical and social environment the businesses of multinational companies are facing more challenges than before. The globalization trend enables companies to stand out from others by understand the context and make reasonable changes. This case study of HP, provided detailed evidence of sustaining competitive advantages in changeable digital environment, performing well under the burden from financial crisis by analyse the external and internal business environment, obtaining a good brand reputation in relation to shoulder its social responsibilities. Only considering the busi