Case Study: Competitive Advantage of Hewlett Packard (HP)

Hewlett Packard popularly called HP is a company that provides technology solutions to consumers, businesses and all forms of institutions worldwide. The company later expands its operations to IT infrastructure, personal computing and access devices, global services and imaging and printing services. The company is known throughout the world by operating in more than 170 countries around the world. The mission of the company is to facilitate how technology and services can assist individuals and institutions in addressing their problems and challenges so as to realize their dreams. The company applies new thinking and ideas come out with basic and valuable experiences with the technology with her IT corporation headquarter in Palo, Alto, California, USA. The company has been maintaining a lead among her contemporaries due to the effective strategic planning of the company and this has been jealously guided by the company in virtually all her businesses.

Competitive Advantage of Hewlett Packard (HP)

How Competitive Advantage helps HP Company

HP Company being one of the world largest IT companies with a quarterly revenue of approximately $97.1 billion is able to maintain such a wonderful record through the sustainable competitive advantage over the competitors. The sustainable competitive advantage has benefited the company in so many ways that she has no other choice other than sustaining such record. The gained competitive advantage has increased the company’s revenue tremendously. In year 2006, HP recorded a much better revenue of $91.7 billion against the rival, IBM with $91.4 billion. In year 2007, the annual revenue of the company was jacked up to $104 billion to become the first IT company reported to have a revenue of more than $ 100 billion, it doesn’t stop there, acquisition of the EDS in 2008, also jacked up the revenue to $118.4 billion. All these achievements in terms of boosting in the revenue are products of the gained competitive advantage.

The competitive advantage gained and sustained ever since by HP can be also attributed to her leadership position in the world technology with groups strategically assigned to drive industry leadership in main technology areas. The Personal Systems group are responsible for the lead in the business and consumer PCs, mobile computing equipment’s and work station. In the same manner, the imaging and printing group is responsible for the successes recorded in all forms of printing devices (personal and commercial printing), printing supplies and the enterprise business group is in charge of all business products. The performance of each of these groups among others is what makes HP what it is today among her equal.

In addition HP became the largest world seller of personal computers as a result of her competitive advantage. In January 2010 a report from Gartner and IDC (Market Research Firms) shows that there is a wide gap between HP and Dell with HP taking 8.3% market share lead at the end of 2009. It was equally reported that HP is the 6th largest world software company.

HP Company is equally reported in year 2008, to have retained the global leadership position in Jacket, laser, large format and multifunction printers market and at the same time the second IT service provider throughout the world. All these benefits/achievements do not come by chance it is as a result of being able to maintain some degree of superiority over the competitors. This results in to competitive advantage and the benefits being discusses the created values based on the competitive advantage.

Analysis of Competitive Advantage in HP Company

HP is able to achieve and sustain competitive advantage with her distinctive competencies. First of all, the company is committed to simplifying technology experiences for all its customers. This is applicable to all the services rendered ranging from printing, personal computing, software, services and IT infrastructure. This is very important since it assists in making virtually all the HP products usable by the intended users by putting the customers first.

There is no way one can analyze the  competitive advantage of HP Company without discussing the HP values; HP values is associated with the complete adherence to the ways or paths set out by the founding HP leaders. These unique ways account for the decision-making and the firm’s advancement since it is just like a roadmap. Also, HP pioneers based the corporate culture on the integration and reinforcement of critical opposites. This is achieved by simultaneously creating an environment that both celebrates individualism and at the same time supports the team work. The beauty of it is that such a practice will allow the company to tap from the benefits of both approaches as the case may be and also to neutralize their associated risks.

Another way by which the competitive advantage of HP Company is sought is through her concept of developing cross functional individuals. Unlike other companies that just hire staffs and train them for a specific job requirement to be assigned to such staffs throughout their stay in the organization, HP makes sure that all her employees move more than 4 to six functional areas within the company to allow them to work in more than one departments of the company and thereby effectively managing the organizational knowledge through effective sharing among her staffs. It has been widely agreed that in this knowledge era, effective knowledge management will surely lead to achievement of competitive advantage.

The quest for developing employee has always been the strength of HP company in attaining competitive advantage since this makes the company to achieve effective organizational change considering the rampant changes in the business organizations. Since 1980, HP has been engaged in extensive employee retraining program called Software Job Skills (SJS). Personnel who might ordinarily be laid-off underwent serious retraining the complex set of required skills and techniques. This makes the company to be able to sustain her competitive advantage since the employees always continue to be relevant and compliant with the new trend organizational need and employee are considered important in the performance of every organization.

Organizational competitiveness is derived by the implementation of knowledge management and its associated benefits. Knowledge management helps in reducing the production cost as a result of the possibility of reusability. This allows the organization to be able to offer services of the same quality or even better than that of its competitive at a relatively low cost. This is an important way of gaining competitive advantage. In addition, the implementation of knowledge management brought about enhanced employee productivity and coordination which has a resulting positive effect on organizational performance.

Another important factor is early delivery or ubiquitous service deliver powered by the real time communication facility. It is a wise saying of HP as quoted as follow “If only HP know what HP knows!” It means that the required knowledge and skills for solving your problem resides somewhere within the company. This means that the company has achieved a lot through effective communication. All these account for achieving sustainable competitive advantage. There have been series of academic evidences responsible for the early delivery experienced in the company due to regular improvement and enhancement of the supply chain.

Full optimization of the business supply chain cannot be achieved using only the Operation Research (OR) approach in this demanding fast-paced ubiquitous business environment of the globalized era. Using OR alone will require a lot of time which might result in to delay in the service delivery and thereby negatively affect customer satisfaction. HP strategic planning and modeling (SPaM) came out with a more efficient approach which combines the optimization ability of OR and scenario analysis of the expert knowledge to arrive at an effective supply chain approach capable of solving complex supply chain decision problem for HP’s imaging and printing group of company. the earlier the customers can get the required service the more satisfied they are, the efficient supply chain of HP has been of the secretes of the company’s sustainable competitive advantage.

It ha equally been argued that the risk associated with supply chain are related to product demand, component cost and availability uncertainties and they all affect the company’s revenues and profits. Procurement management group is formed in HP and they developed and implemented a mathematical model, business process and software to estimate and manage risks associated with supply chain. This has brought a lot of benefits to the company. To the extent that in year 2006, HP was able to manage $7 billion of her spending by saving only material cost of not less than $128 million. This really maximizes the company’s profits and contributes to the sustainable competitive advantage of the company.

The products of HP are always better than that of her competitors and such are refined and re-branded from time to time to meet the changing technological needs of the customers. Just in November 2009, HP StorageWorks X9000 was introduced as the new network storage system which is primarily designed to meet the emerging trend of the explosive data growth and to enhance the performance of the file-based applications using scale-out network storage that has the ability to manage information efficiently using a single namespace. This has fetched the company more popularity in the networking society since such an innovation is needed in virtually all organizations that deal with large data. The StorageWorks is very efficient in storing data and it is known for relatively low down time.

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