Table of Contents

Acknowledgement ………………………………………………………………………………… 2

I. Executive Summary ………………………………………………………………………………… 3

II. Statement of the Problem ………………………………………………………………………… 4

III. Areas of Consideration …………………………………………………………………………… 6-9

1. External Environment

PEST ANALYSIS ………………………………………………………………………………… 6-8

2. Internal Environment

SWOT ANALYSIS ………………………………………………………………………………… 8-9

IV. Assumption ………………………………………………………………………………… 9

V. Alternative Courses of Action ……………………………………………………………… 10

VI. Analysis of Alternative Courses of Action …………………………… 10-

11

VII. Recommendation ………………………………………………………………………………… 11

VIII. Plan of Action ………………………………………………………………………………… 12-

29

IX. Conclusion …………………………………………………………………………………

X. Appendix …………………………………………………………………………………

1. Case Study …………………………………………………………………………………

2. Curriculum Vitae …………………………………………………………………………………

1
Acknowledgement

We take this opportunity to express my profound gratitude and

deep regards to Our Father Almighty for all the blessings that

helps and gives us guidance time to time and carry us a long way

in the journey of life on which all of us were about to embark.

We also take this opportunity to express a deep sense of

gratitude to our Professor Willy O. Gapasin for his support,

exemplary guidance, valuable monitoring and constant

encouragement throughout the case study analysis and all the

information needed, which helped us in completing this task

through various stages.

Also thank you to all of our friends who devoted their time and

effort for giving the valuable information needed.

Lastly, our parents, brothers, sisters and friends for their

constant encouragement without it this case study analysis would

not be successful.

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I. Executive Summary

Hewlett-Packard (HP) is a major supplier of personal systems,

visualization, and printing products, technologies and

solutions. The Corporation is one of the key players on PCs,

servers, printers, storage solution and IT services sectors in

particular. The active position in various segments of the

market provides economies of scale for the company, but also

enhances its ability captivating customer. Nevertheless, the

decline in the late market, the company may have an impact on

its performance in the immediate future. HP came from the two

surnames of great business men. Bill Hewlett and David Packard.

They are the most important person behind HP. But before they

become the most known means they had faced different problems,

like how their business fit to the rapid changing world and how

they can persuade their clients to buy their products. Well as

stated communication is the key. It’s all behind the success of

the HP Company and also their ingredients towards innovation and

quality. And also other aspect why HP became successful is they

focused on their goals or primary objective and they are

committed to it. And also it was viewed as ongoing w/continual

product improvement as a major role. Those are the key or the

ingredients of the HP Company that’s why they have made to be

one of the greatest companies in the world.

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II. Statement of the Problem

How the so called “HP WAY” management can adapt a new focus and

keep pace with most of their clients that were operating in a

rapidly changing world?

III. Areas of Consideration

1. External Environment

PEST Analysis

 Political Legal Factor:

HP may not use its corporate funds or assets for U.S. federal

political contributions. The HP Political Action Committee (HP

PAC) makes contributions to U.S. congressional candidates (and

in limited cases, contributions to state candidates where

corporate contributions are not allowed) who share HP's public

policy views. The HP PAC is a separate legal entity from the

company. Voluntary personal contributions to fund the HP PAC are

solicited from selected employees in compliance with federal

election laws. Company funds may be used, where legally

permissible, to participate in the election of state officials

who share HP's public policy views, as well as passage or defeat

of state and local ballot measures having an impact on the

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company and the quality of life in HP communities. In rare

instances, HP will consider contributions to local candidates.

 Economical Factor:

With more than seven billion people seeking greater prosperity

worldwide, balancing economic growth with environmental

sustainability calls for innovation and leadership. Working

towards a more sustainable world, HP Living Progress responds to

this challenge by improving the efficiency of their products and

solutions, supply chain, and operations. By combining the

expertise of their people, their innovative technology

portfolio, and collaborative partnerships, they are working to

create solutions that reduce environmental impact and expand

opportunities. They are working with their customers, suppliers,

and other stakeholders to develop and share solutions that

streamline and replace resource-intensive processes. But in

2012, HP says that their earnings has fall by more than 10

percent the next year. Whitman says she inherited a bloated

company that hasn't been innovating quickly enough in any of its

divisions, which span from personal computers and printers to

software and data storage. The headaches are so severe that

Whitman believes HP's revenue growth might not accelerate again

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until 2015.

 Socio-cultural Factor:

HP has the local US consumer base well captured but it seems

that there is very little to be done here in terms of attracting

the incoming young generation of IT zealot and unless there is a

stress upon updating the models of its hardware for printing and

PC’s to catch up with the hype created by HP and Intel who

unveil new models almost every other month.

 Technological Factor:

HP went “cyber” for almost many years ago, which is fairly

recent in comparison to its 70 year long market presence (HP,

2009). In fact, the turning point of HP’s luck came in 1940’s to

1990’s because of their continuous development and innovation of

their software, printing products, solutions, technologies and

PC’s that booms their sales and company.

2. Internal Environment

SWOT Analysis

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 Strengths:

- Brand name

- Low debt

- Wide range of innovative products

- Developing of own hardware and software

- Web technology used for product awareness & sale

 Weaknesses:

- Lack of in-house management consulting division

- Intellectual capital is underestimated

- No aggressive investment in R & D

- No good people retention policy

 Opportunities:

- Expansion of retailed stores for customer convenience

- Participation in joint venture

- Make easy to use product for upcoming retirees

- Computer and cell phone software & hardware

 Threats:

- Competitor’s technology & pricing

- low compatibility with non- HP product

- Availability of substitute

- Less global coverage than competitor

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IV. Assumption

If HP still continues to be the way they manage their business

and employees for the past years because of their excessiveness

in focus of vying with the rapid upgrades of technologies, even

if they replace their higher board officials they will fail just

like what happened to them before. So a proper course of actions

must be proposed to the problem in order to help HP in

prosperity.

V. Alternative Courses of Action (ACA’s)

1. Make a proper decentralized communication with their

employees from top management instead of eliminating massive

number of jobs.

2. Strategic management must be made when making a decision in

their overall management and on changing their focus in

business.

3. Proper cooperation and adaptation must be done in all its

divisions.

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VI. Analysis of ACA’s

1. Advantage: By implementing decentralize communication,

skilled employees can share their thoughts and ideas, it’s

not a bad idea to give opportunity for those who have skills

and experience. It may broaden the new idea, way of thinking

and imaginary ability of the company.

Disadvantage: If this happens, there will be a big change and

everyone must adjust to it and adapt to the change of plans.

2. Advantage: In strategic management it includes the strategies

of every division and a strategy as a whole and also critical

decision-making, the minimization of all the hiring and

eliminating of jobs, giving opportunities to the employees to

open up their ideas that could help the company, watching

every expenses of their capital and using it wisely and

making proper rules and regulations in each division of their

company in all terms, cooperation of each and every

individual there is needed for HP’s success.

Disadvantage: It may take time and money for the huge change

and it may affect every branch worldwide to adapt.

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3. Advantage: With this, HP’s divisions can work and innovate

quickly enough for them to have a progress and have a

competitive advantage.

Disadvantage: It may affect the divisions of other branch in

other countries in the change.

VII. Recommendation

With the above analysis we therefore recommend Alternative

Course of Action Number Two (2) that recommends Strategic

management must be made when making a decision in their overall

management and on changing their focus in business.

VIII. Plan of Action (TABLE FORM)

IX. Conclusion

X. Appendix

1. Case Study

Hewllet Packard (HP) is an American multinational operating in

most major countries of the world. It was founded in the late

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1930’s in Palo Alto, California, by Bill Hewllet and Dave

Packard, both of whom have had considerable influence on company

philosophy, although Dave Packard died in 1986 (Bill Hewllet

died in 2001). Traditionally the firm has operated in four main

divisions each representing different product groupings. These

divisions are: the Computer Systems Group, The Measurement

Systems Group, the Medical Products Group and the Analytical

Instrumentation Group. The company now employs over 120,000

people in more than 110 countries worldwide and has

manufacturing and R&D in 52 of them. Its philosophy as a global

company is based around a unified corporate culture irrespective

of location.

By the end of the 1990’s the management had become aware

that as a company they needed to change their focus. They

recognized that most of their clients were operating in a

rapidly changing world. They wanted more than the purchase of

hardware systems. Rather, they needed someone to guide them

through a period of rapid and confusing change, of which e-

commerce was but one element. HP decides to offer a complete

service to customers, which they called “HP Consulting”. This

required a change in approach not just HP employees, but for

their customers as well. The methods they used in effecting

these changes were based on a central element in all their

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activities they had used since the beginning. This central

element became known as the “HP Way”.

The “HP Way”, a set of beliefs, objectives and guiding

principles, is described by Bill Hewllet as follows:

… The policies and actions that flow from the belief that

men and women want to do a good job, a creative job, and that if

they are provided with the proper environment they will do so.

It is the tradition of treating every individual with respect

and recognizing personal achievements . . . You can’t describe

it in numbers or statistics. In the last analysis it is a

spirit, a point of view. There is a feeling that everyone is

part of a team and that team is HP. As I said at the beginning

it is an idea that is based in the individual. It exists because

people have seen that it works, and they believe that this

feeling makes HP what it is. (Quoted in Peters and Waterman,

982, p. 224)

 Communication is the key underlying theme behind all

activities in HP and is an important ingredient of the

company’s attitude towards innovations and quality. Informal

communication is encouraged between all employees of different

levels and functions. The physical layout of the offices and

works station has been deliberately created to encourage ad

hoc meetings and brainstorming. The use of first names is

12
 almost obligatory and is the norm, even the German operations

where employees are used to a much greater degree of formality

in personal relationships. Management assists the informal

processes by engaging in what HP term MBWA (management b

wandering around). At a more formal level there are frequent

announcements to the workforce on such matters as company

performance and all employees are given a written statement of

the company goals stressing, as they do, the contribution that

individuals can make. Regular team meetings are obligatory for

groups within the organization and once a week all employees

meet for a briefing session by senior management. Less formal

channels of communication are still guided by the company, in

that employees are encouraged to participate in coffee breaks

signalled by a bell. The communication policy is assisted by

the company’s commitment to decentralization.

An important aspect of communication in HP is the various

stories and myths that are continual feature of management

training, retirement parties, company speeches and in-house

journals. These stories generally tell of key moments in the

company’s history, or recount the exploits of the corporate

heroes, usually Bill Hewlett and Dave Packard. These stories

serve an important purpose of stressing a collective identity

and underlying the goals of the founders.

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 Quality according to Peters and Waterman is pursued with

zealotry. The company certainly sees its prime objective as

a commitment to the design, manufacture and marketing high-

quality goods. Commitment to quality is viewed as on going

with continual product improvement as a major goal. All

employees are involved in the definition and monitoring of

quality, a process reinforced by procedures such as MBWA

and ceremonies to, reward and publicize good work. The

company has a stated policy and associated methodologies of

continuous improvement.

 Innovation, like quality, is regarded as the responsibility

of all employees. Following the espousal to ‘stick to the

knitting’ there is a clear commitment to products related

to electrical engineering and the company’s existing

product portfolio. Openness is encouraged and prototypes

are often left for other employees to test and criticize.

Employees are free to take company equipment home with

them. In relations with their customers the company is

guided by yet another principle and mnemonic, that of LACE

(laboratory awareness of customer environment). A central

strategy in R&D is the design of products to customer

specifications and the LACE programmer gives customers the

opportunity to make presentations to the company. Such

procedures stress the strong emphasis on customer service.

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 The ‘HP Consulting’ initiative is a further attempt to link

new developments with the needs of customers. It is also an

attempt to assist customers to deal with innovations

occurring in their business environment, such as e-

commerce.

 Personnel policies are carefully designed to reinforce the

HP Way as well as ensuring that it works. Most HP employees

have no requirement for clocking-on and many operate on

flexible working hours. All employees attend a detailed

induction programme with communication of the HP Way as a

key ingredient. In terms of selection, care is taken to

select only those who meet the criteria of being high

caliber and processing flair, adaptability and openness.

Most recruits are young. As we have seen, considerable

attention is paid to the environment and the general well-

being of employees is a major consideration. Employee

commitment is reinforced by a highly structured system of

objective setting. Objectives are mutually set at all

levels and are cascaded down throughout the organization.

Salaries are reviewed every three months for each employee

through an evaluation based on the achievement of

objectives.

 There is a somewhat traditional and conservative approach

to finance and accounting. There is an emphasis on careful

15
management of assets, self-financing investment, and

minimal long-term borrowing.

The overall impression is often that HP is too good to be

true.

Certainly on most measures of performance and employee

satisfaction, HP emerges as a highly successful company.

The net profit has never been less than 3 per cent of net

turnover and R&D expenditure never less than 10 per cent of

turnover. More than 50 per cent of the turnover is

generally attributed to products developed in the previous

two years. A measure of the employees’ commitment occurred

in1970 when, in the middle of a recession and bad time for

the company financially, a 10 per cent pay cut was agreed

rather than lay people off.

The downturn in the computer industry towards the end

of the 1990s and the early part of the new millennium had a

serious impact on HP sales and profits. Other established

firms were also affected and HP announced a merger with

Compaq. The two products would continue to be marketed

separately but the future impact on the distinctive HP

culture will be interesting to observe.

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2. Curriculum Vitae

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