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How can a company that generates $111 billion in computing. For a company like HP that earns much of annual sales be considered a laggard in its industry? its revenue from hardware like computers and printer Well, if that company is Hewlett-Packard (HP for short), those trends collectively were not a welcome develop the answer is when that company loses roughly half its ment. Their competitive responses over the past serere market value since 2010, when that $111 billion sales years seem confusing, for example, their flip-tlocs or figure represents a 7.4 percent decline from the pre- whether to be in or out of the PC business. vious year, and when many of that company's main products are considered old and unappealing by a vast ship. In an effort to change its fortunes, a few years ago majority of customers. Needless to say, HP has many the company hired former eBay CEO Meg Whitman. strategic challenges ahead as it strives to regain cus- Determining how the company will reach its growth tomers, market share, and profits. Actually, HP has a proud history of being one of the Whitman and her leadership team. Regardless of the top technology firms in the world, The company liter- strategy they ultimately implement, how HP is able to ally was founded in a California garage in 1939 on $538 adjust its strengths and weaknesses to take advantage of investment capital by Bill Hewlett and Dave Packard. Over the years, HP has introduced some of the most innovative products in several different industries. The company's very first product was purchased by Walt position as a technology leader with innovative prod- Disney Studios to produce the film Fantasia. Other ucts and services that are preferred by customers. product innovations by HP include a cesium-beam standard clock in 1964 that helped maintain interna- Questions for Consideration tional time standards, the first desktop calculator in 1968, the first scientific hand-held calculator in 1972, the first desktop mainframe computer in 1982, and the amazingly successful line of HP laser jet printers. Despite this prior product innovation history, the company found itself in deep trouble in the late 2000s. A situation analysis at that time would have revealed an 2. What strengths does HP have that they can use to economy that was not very conducive to new invest- ments in technology. The recession that began in 2008 was one of the steepest in U.S. history, with fallout effects for years with sluggish economic growth and 3. Given what you know about HP and its situation, relatively high unemployment. The sociocultural envi- ronment was one in which consumers began heavy use of smartphones and tablets as the primary access to social media and other electronic resources. Fur- thermore, today's consumers were becoming more interested in maintaining and sustaining the natural environment. Finally, the technology and competi- William Hewlett and David Packard: 1995 Lemelson-MIT Liletime tive situation had changed as companies like Google, Achievement Award Winners" Lemelson MIT, http://web.mit.edu/invent/ Apple, IBM, and Microsoft shifted to software and cloud Clearly, HP has much work ahead of itself to right the targets in the future is of paramount importance for Ms. of opportunities and minimize threats in the external environment will heavily impact the trajectory of their success in returning the venerable firm to its former 1. As HP continues to make changes to its overall strat- egy, what other aspects of the situation analysis beyond those elements mentioned above should Meg Whitman and other leaders pay special atten- tion to? take advantage of various opportunities or minimize threats in the external environment? what product-market strategy or strategies would you recommend the company adopt to improve its performance and retun on investment? Sources: Sam Gustin, "Why Hewlett-Packard Suddenly Doesn't Look So Bad, Time Magazine, October 10, 2013, http://business.time. com/2013/10/10/why-hewlett-packard-suddenly doesnt-look-so-bad/; a-winners/a hewlettpackard.html.