Business_Analyst

Hewlett Packard Business Analyst Jeremy Davis MGT/521 MANAGEMENT September 11, 2012 Patrick Oldenburgh Jr., M.A., SPHR Abstract The economic stability of all innovation industries around the world experienced a tremendous decline in sales due to the fall of the US and global economy. Hewlett Packard has been able to remain self-sufficient and grow during a time period where multiple fortune 500 companies have folded or requested assistance from government officials. Company’s competitive advantage shifted from products and service to strategic decision making and company stability during the tough economic times. The most important component in the economic down fall is the customer. Economic trends have forced Hewlett Packard to revert back to the company’s foundation, innovation and customer service. The Hewlett Packard Company understands the value of a loyal customer; therefore the “Mega Corporation” has developed a fresh approach to customer service. Echoing the words of Hewlett Packard CEO Meg Whitman, “We can’t change the status of the economy, nor can we change the buying trends of the market. All we can change is how we strategize to be successful in this time and the tactics we use to achieve our goals Hewlett Packard has been viewed as a sinking ship to some business analysis. The company’s poor performance financially, displays weak executive decision making and lack lust sales performance. Surprising Hewlett Packard has been able to remain self-sufficient and grow during a time period where multiple fortune 500 companies have folded or requested assistance from government officials. CEO Meg Whitman is very optimistic about the developing growth in Hewlett Packard and has vowed to restore the positive image of Hewlett Packard to the consumer. Customer expect companies to adapt to the changes is the economic markets. If companies fail to change, the empowered consumer group will venture into another segment of the market. Hewlett Packard has been implementing changes to cope with the changes in the market. Effects of Economic Trends The economic stability of all innovation industries around the world experienced a tremendous decline in sales due to the fall of the US and global economy. The harsh reality of these times caused productive and successful business to face the jeopardy of bankruptcy and others are facing the threat of complete shutdown of company operations. Company’s competitive advantage shifted from products and servicse to strategic decision making and company stability during the tough economic times. J Allen 2009 suggests that the current economic crisis faced by business is of great magnitude. Businesses around the globe were hit so hard by the economic crisis that several businesses had to seek monetary loan assistance from the government. Practically for many monetary institutions it was like floor has been swept off under their feet. And as a conclusion the power of acquiring things by the public became feeble. The consumers once again were very conscious about the budget. Global fortune 500 company experienced the effects of the weak economy on a more detrimental level. J Allen 2009 suggests that if the stakeholders (third party companies, customers, employees) in a company, such as third party suppliers, are unable to perform their roles effectively and big business will suffer extreme lost. The most important component in the economic down fall is the customer/consumer. As stated by J Allen “the consumer once again are very conscious about their budgets”; customer purchases has declined by 55% since 2008, which has force companies to adapt to the new economic buying trends. Customers are more likely to shop for quantity instead of quality and are less likely to remain loyal to companies. The outcome is that companies are trying harder to retain the business of current customers while capturing new business from the competition’s dis-satisfied customers. No different from any other company, Hewlett Packard has been a victim of the rough economic times. Since 2009, the company’s financial records can be a testament of how the economy has affected the company’s results. In the span of 3 year, 2009 to 2012, the company revenues have decline by approximately 3% - 5% per quarter and stock price has dropped astronomically from $42 per share to $17 per share. Customers in Hewlett Packard multiple markets (public sector, small and medium business, consumer) are actively cutting budget, forcing Hewlett Packard to adapt. Although the financial struggles are evident, Hewlett Packard is in the midst of a wave of revolutions, spanning from massive changes in the company’s global workforce, to developing global marketing strategies to implement the HP band into a house hold name. Strategy and Tactics during Economic Hardship Economic trends have forced Hewlett Packard to revert back to the company’s foundation, innovation and customer service. Founders Bill Hewlett and David Packard developed the company off those principle and CEO Meg Whitman, explained that it was necessary to place extra focus in these areas during these tough economic times. The business strategies of Hewlett Packard during this time period are no different than the strategies of all companies should be. “Manalasta 2009” say’s that the only way companies can effectively grow business during economic downfall is to focus on the core competencies which are customers, customer, and customers!!! Hewlett Packard has mimicked the thoughts of” Manalasta 2009” buy incorporation customer, along with other competencies, in their strategy plan of attack. The first and most important is, 1. “Focus on the importance of the customer.” The phrase “customer-centric” has never been more important to Hewlett Packard than it is today. Consumers are now searching for lowest cost product, and not considering the service value add companies deliver. With the current down fall of customer loyalty, companies no longer have the power to define the market and now consumers predicts market trend and companies are forced to react accordingly or face the consequences. The Hewlett Packard Company understands the value of a loyal customer; therefore the “Mega Corporation” has developed a fresh approach to customer service. By implementing new account structuring, better territory alignment and enhancing service response time, Hewlett Packard Company is delivering state-of-the-art customer service platforms assisting small and medium businesses and public sectors customers around the world. Hewlett Packard are not only perform these tasks to better stabilize during the new age, but to reduce customer costs by delivering competitive service model, reducing cost of many services and unveiling a higher level of customer service to cliental. Management at Hewlett Packard understands that during these times customer loyal is diminishing and in some markets is completely non-existent. Research conducted by “W Band 2008” show that customer experience has a direct correlation on customer loyalty. In Hewlett Packard’s efforts to focus on the customer, HP has introduced customers benefits programs such as “White Glove” ( giving certain account prime service and support at no extra cost) and the Re-buy Program ( HP will purchase existing hardware, as a credit towards a new purchase). Also to combat against budget cuts in information technology department around the world, Hewlett Packard provide lease to own programs. This program allows consumer to purchase major solutions with a small down payment and a minimal monthly charge. Hewlett Packard is known for the award winning engineers and innovative products. The company is credited for developing industry standard server requirements and developing the term “Converged infrastructure” (A complete solution covering all aspects of the datacenter, servers, storage and networking). Executives at HP initiated this portion of their strategic plan with no hesitation, “Focus on core business and innovation”. Recession requires intense business focus and value creation, therefore it is necessary to directly beam the company's key competencies and best resources to specific market segments with the greatest growth potential and highest profitability yields. The engineers at HP have targeted the Server markets, by creating cost saving version of the HP award winning industry standard servers. The server market the highest grossing market for HP and by implementing the new “low cost, high production” units it allows consumer to purchase more with less. As a result Hewlett has been able to capture business that competitor are unable to steal. “Manalatase 2009”, comments that companies should ambush segments of opportunity. Also to protect the new business with offers and values that competitors cannot match. Echoing the words of Hewlett Packard CEO Meg Whitman, “We can’t change the status of the economy, nor can we change the buying trends of the market. All we can change is how we strategize to be successful in this time and the tactics we use to achieve our goals.” Hewlett Packard understood what needed to happen in order to remain successful and implemented strategies and through tactics, the company has been able to stay afloat. HP fortified their positioning strategy with continued innovation in products, processes, and customer service. The company also has specialized in certain areas that have improved the terms of endearment with customers. Role of HRM Human resource management plays a pivotal role in the strategy of a company trying to maintain stability and forward movement of a company. Human resource management’s function is to focus on recruiting, managing and provide direction to the people who work within the organization. “Hearthfield 2008”, states Human Resource Management is a strategic and comprehensive approach to managing people and the workplace culture and environment. This is important because human resource management is charged with recruiting employees that will bring positive moral inside the work place. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives. Investing in Company Investing in a company is a strategic process. There are many factors to evaluate even when considering a company to invest into. Many believe that an individual should base their decision solely on the amount of growth that a company may have, although growth is good, a number of other factors of the company must be analyzed before pouring thousands of dollars in investments. As a mutual fund’s manager it wouldn’t be wise to advise an investor to invest in a company without having a carefully analyzed assessment of that company. Based on just numbers, Hewlett Packard’s investment potential is low. Biary 2009 talks about global economic status being the main factor when investing with a company. Most would agree with the finding of “Biary 2009”, nevertheless the performance of Hewlett Packard during tough economic times, the strategic discussion making of the executive management and the potential growth of Hewlett Packard make it a prime piece of property to investors. Conclusion Thought the history of HP the company has displayed stability and continuous growth. The SWOT analysis of the company shows how strong Hewlett Packard is and the profitably opportunities on the future. Although there are many opportunities for Hewlett Packard, the historically poor financial numbers and the industry leading product produced by the company are not on the same stage. Consumers are concerned with the lack of executive leadership, and investors are concerned with the weak quarterly earnings last year along with company stock prices. Nevertheless though levels of research it’s apparent the Hewlett Packard is slow reaching a receipt for performance and success. New executive leadership, the implementation of effective strategy during tough economic time and a stock price that is slowly on the rebound, proves that there is life and possible profit in investing in the company. Hewlett Packard still remains as a fortune 10 company and if consultants at Forbes feel that this power house is still reputable so should investors and the public alike. Reference: Bailey , D. (2009). The top three factors to look at when investing in the stock market Heathfield, S. (2009). What is the importance of human resources management'. Retrieved from http://humanresources.about.com/od/HR-Roles-And-Responsibilities/f/importance-of-human-resources-management.htm Band, W. (2008). How to build customer loyalty in a recession. Retrieved from http://www.customerthink.com/blog/how_build_customer_loyalty_recession McClimans, F. (2011). 5 trends influencing business today. Retrieved from http://fredmcclimans.com/2011/07/19/5-trends-shaping-business-influence-today/ Manalastas,, R. C. (2009 , August 18). Top strategies for business survival during a recession. Retrieved from http://voices.yahoo.com/top-strategies-business-survival-during-recession-4094411.html'cat=3