Applied Business Project International Business - Coursework Example

? Applied Business Project – International Business (HP USA) Hewlett Packard Hewlett Packard or more commonly known as HP is a company that has deep and humble roots. The company was founded by Bill Hewlett and Dave Packard way back in 1939. These two are both from Stanford University. These two classmates started their business empire from a humble garage which is now prominently displayed by the company as one of its most prized estate. The first ever product of the company was an instrument that is of strong importance for sound engineers, the audio oscillator. Indeed, among the first customers of the company is no less than Walt Disney himself who bought eight of these oscillators in order to help make his movies (HP Website, HP History 2011). The company’s International Activities Basically the company has long grown leaving behind a trail of rich history. When the world war broke out, Bill even joined the army. After moving out of their HP garage, the company has taken their business to greater heights opening up larger office spaces and then incorporating in 1947. As the company’s business grew, they finally went for bigger markets and went global in 1959. From then on, HP penetrated into different fields, even going into the medical field. Soon after, HP opened its laboratory and developed their first computer which helped them enter into the business of computing in the early 70’s. Coinciding with the birth of the Silicon Valley, HP developed its first wrist instrument a year prior to Bill’s resignation as CEO in 1978. By the 1980’s, it became apparent that computers were the growing trend and the company developed its desktop mainframes as well as their laser printers. However, their growth has also made them aware of their need to make their business sustainable as well as to be good corporate citizens. The propagation of the printers has been aligned with the recyclability of the cartridges used therein. At the turn of the century, even with the HP founders gone, the company continues to thrive going into mergers, developing and innovating and basically continuing the legacy of Bill Hewlett and Dave Packard (HP Website, HP Timeline 2011). No wonder the company boasts of a diverse line of products such as computers, both desktops and laptops; printers and monitors as well as smart phones. Moreover, the company even develops software products and ensures their customers of the availability of parts and accessories for their computing needs. HP even gives support and consulting services, the cloud computing which is a revolutionary way of saving data as well as business and IT outsourcing (HP Website, HP Products and Services 2011). The company has indeed come a long way from the humble beginnings of the HP founders. Now, almost every office in the world has HP products. The brand has been a worldwide name and its products and services continue to help shape businesses and even lives all over. Also, the HP way has been scattered across many countries not just in the Americas but across Europe, the Middle East and even across Asia Pacific (for the complete list see Appendix 1). However, the company also experiences many challenges. Moreover, with the advent of globalization, there has been increasing pressure both in and out of the organisation. This is expected though since there will be many more competitors in the global arena much more the diverse customer base that companies operating globally have to satisfy. As aptly reported in the 2010 annual report of the company, HP products are sold globally and their services are exposed internationally. Hence, the company’s thrust is fuelled by a diverse global network of business and technical experts that powers the operations of the company and makes the global presence of HP formidable. Hence, it is important that the company is able to manage their diverse global workforce. The cultures of different countries play greatly into the capability of the company and the employees to work harmoniously with each other. It is therefore important to ensure that the manpower management strategies of the company capture this very important facet of the employees that they hire (Adler and Gundersen 2008). As echoed by Casico (2009), being able to capture this can enable to the company to more effectively manage the people that work under them in order to make them more productive. Of course along with this is the work life of the employees which, to some degree, ought to be at par with the image being brought forward by the company. It is therefore of no use to brag about being number one in the business yet the employees that make this possible do not feel it in their workstations and their day to day toiling in the company. Moreover, the company has also tried to contribute to the betterment of the global society. The company anticipates the changing needs as well as the growing demands of the burgeoning population. Moreover, the company recognizes the robust growth of emerging economies which seem poised to take the helm of the global economy. Nevertheless, the company also recognizes that along with this burgeoning population comes the problem of the supply of energy. Hence, the company has made conscious efforts not just to include better features in their product innovations but to make their products more energy efficient as well (HP Global Citizenship Report 2010). However, it is important to remember that the company is not merely a seller or an employer. HP is also a buyer and the company usually buys from third party suppliers. Therefore, it is important for the company to be able to manage their resources as well as their suppliers (HP Annual Report 2010). Broad versus Focused Moreover, it is also important for the company to continuously innovate in order to keep themselves ahead of the competition. The need to ensure that they are able to meet their clients’ needs seem to be inadequate especially in the fast-paced business environment that technology intensive firms are operating in (HP Annual Report 2010). As mentioned, the company offers a myriad of products and services which means that their resources are basically stretched greatly across these product lines and different service offerings. Moreover, the top management of the company must oversee all of these operations and though they do not need to do these in strict detail, having many things to look after tends to affect the effectiveness of even the best management team in the world. Also, since the company operates globally, there are various competitors not only from the US but from other countries as well. To exacerbate the situation, not all the competitors of the company are as diverse as HP. Some focuses more on one or two segments wherein these can target specific segments of HP’s products and or service offerings to dislodge them and take away market share. This is a very real concern since the huge portfolio of business being handled by the company can hamper them and prevent them from investing in all of their product lines on the same level. This then can be targeted by competitors focusing on that product line enabling them to successfully eat out at the market share of that particular HP product. The company tries to compete on the lines of technology and performance necessitating HP to have the capability to innovate to ensure that their products and services are not only up to date but are proactive enough to anticipate the market’s possible demands. Of course the HP brand is there and through decades it has always boasted of quality at a price that customers can afford. In operating globally, the company has also come to depend on strategic alliances to enable them to gain strong foothold on different markets abroad as well as to be able to have the necessary components for their production needs. Quite ironically, due to the magnitude of HP’s business portfolio, some of these companies that provide vital strategic partnerships can actually bring in competition in other facets of the company’s business operations (HP Annual Report 2010). Also, there is the risk that the company may be put at a disadvantage in a competitor’s home turf. Although global trade is more regulated nowadays eliminating restricting trade barriers and protectionist policies, there is still the very real advantage of home players that may be hard to overcome for some of the company’s products and services. Inadvertently, the company might fall into the trap of having a competitor with the home advantage focusing on a segment of HP’s diverse product lines and eventually eating up at that product’s market share. Hence, it would be important for the company to heed Limao and Mortensen (2005) to ensure that their global operations and strategic partnerships can get the opportunities presented by global trade by having the capability to access various infrastructures and avoid being at a disadvantage from the home grown competition. Among the possible threats come not just from competitors but from the environment as well wherein some geographical locations may cater to low cost products in which prices play a much stronger role than quality preventing HP to compete effectively against their competitors (HP Annual Report 2010). The company’s International Activities Strategizing, Innovating and Anticipating As mentioned, the very nature of HP’s business which is technology intensive requires large amounts of research in order to ensure that they are able to capture the needs and wants of their customers. Moreover, it seems that it is not enough nowadays to give the customers what they want know but rather to anticipate what they would like and need in the foreseeable future. Hence, it is very important for the company to be able to pour in research funds to their large business portfolio in order to ensure that all of these product lines and services move forward and remain competitive (HP Annual Report 2010). Moreover, the company has really spread out their research and development activities from different countries with HP labs in both sides of the world (for the complete list see Appendix 2). It is therefore important that the company aptly strategize in order to ensure that they are able to foresee these needs. Also, according to Drummond and Ensor (2001) marketing strategies must continuously try to capture and anticipate the possible demands coming from their diverse clients but they must maintain a certain level of control so that their products and services will enjoy the incessant patronization of their customers. However, another big challenge facing not just HP but all companies that mass produce is the increasing demand of customers of have their products and services tailor-fit to their various needs and wants. Not Really All About Surging Ahead Nowadays, companies that are mass producing are facing a seemingly contradicting challenge, to tailor fit. Customers are increasingly demanding that they are provided a mass number of production units but that these products be customized to their needs as well. Hence, companies that are trying to cater to these customers are put in a predicament since it is quite hard to customize at the same time produce so many units. However, being the innovative company that has grown and succeeded through decades, HP manages to solve this problem not by pedalling the accelerator of production but by doing a little postponement right at the last probable moment in their production process (Fetzinger and Lee 2009). By integrating their product’s design and recalibrating it with the specific needs of their client, the company is able to continually benefit from the economies of scale of their production networks while including and refitting the changes and improvements in their design in order to capture the demands of their clients for tailor-fit products. Moreover, thanks to the innovative nature of HP, the company has been able to offer new and much improved ways of saving much needed data. Baker, Keeton and Martin (2005) have shown that the storage system the world has been accustomed to can no longer cater to the increasing need for secure storage system as well as to the pressing need to preserve these data and ensure their longevity. Hence, aside from giving more advanced laptops and data processors and softwares, HP has basically taught the customers their demand for these data storage in which the cloud system has been based upon. Defending All Fronts The magnitude of HP’s business portfolio has been its greatest strength but, as mentioned, can also bring about weaknesses especially with the very real possibility that some products and services of the company can come under focused attack from competitors focusing on those types of products. Therefore, the company must be able to properly analyze the business environment that they operate in so that they can anticipate the threats that may come along and at the same time guard against possible weaknesses. Hence, it is beneficial for the company to be able to analyze their situation. Traditional means of analyzing captures the basic factors of production such as land, labor, natural resources, geographical location and even the local population. However, for Porter it is more important for the utilization of clusters to be recognized since these tend to contribute more to the growth of the industry. Hence, HP could benefit from having a concise analysis of these different factors wherein the company can consider the forces of the government which of course factors in the politico-legal forces prevalent in that country that the company is operating in, factor conditions that might affect the company’s operation, related supporting industries such as suppliers and of course the demand conditions must be watched. Also, the firm strategies strongly come into play, the structure of the organisation as well as the intensity of rivalry between competing firms (Value Based Management.com 2011). As mentioned, HP has a wide variety of products which can be open to focused attacks from competitors which specializes in making certain products. The intricacies of operating globally can also take its toll on the company. It is very challenging to operate transversely among different cultures and various markets from all over the world. Indeed, the global market presents various opportunities but along with it are challenges that companies must hurdle in order to succeed and have sustainable operations. For HP, going global requires them to distribute since there has been opposition coming from the different areas. So, in an effort to decentralize, the company instead gave the different areas different targets which seem to have worked for them. Moreover, the company tried to capture their different processes, even those that are still being experimented on into the global equation so that they can determine the synergies that may arise from other regions and to avoid possible misfits within their operations (Executive roundtable series 2004). Moreover, operating globally requires HP to source out different suppliers. Thus, as mentioned, the company maintains different strategic alliances in order to move their operations forward. This is crucial for all companies operating globally and some even enter into joint ventures for special projects that will enable them to gain a foothold on their target market (UN 2006). Looking Beyond The company has effectively moved forward with their globalization efforts and has had monumental successes with their global expansion. The company has effectively captured markets from different parts of the world. This is due to their capability to innovate and proactively capture the demand. Hence, the company seem to have efficiently put into practice the preaching of Karr and Gabrielson (2007) to be able to fuel their global expansion. Hence, much of the products of the company have been able to effectively penetrate different markets as people tend to appreciate them more despite the high prices in which they are sold. Moreover, the company has also successfully pushed multiple products into different territories all over the world. However, as mentioned, it is also important to be able to provide tailor-fit solutions to the needs of the various customers that the company caters to. Hence, optimizing their product offerings and being able to handle the diversity of their business portfolio has been the critical to the success of their company (Ottaviano and Thisse 2009). Moreover, as mentioned, the company must be able to really invest in their research and development efforts so as to be able to maintain their position in the industry. Indeed, HP has been one of the most successful business ventures and its story is rich with important lessons and inspirations. In fact the company has boasted of its management principles that has nurtured the company’s growth through many decades and catapulted the company to be among the top in the world and making the HP a global name. In fact, the management principles of the company have been so successful it has even been dubbed the HP way. No less than Dave Packard teaches about the tenets of the company wherein he himself teaches about the importance of profit to bring about the strength of the company, the need for innovation for the sake of the customers and to be able to nurture the company and grow within their own capabilities. Moreover, it is also important to recognize the contribution of their employees. Hence, whatever successes HP has, it has also shared with its employees and has provided the latter with the securities of their employment ensuring that they are satisfied with their employment with HP. Moreover, the company ensures that it advances individuality and ensures that they are motivated enough to bring out their creativity to help the company reach its goals and objectives. Furthermore, the company continuously advances and tries to develop a strong and upright citizenship (Packard 2005). Conclusion HP has proven itself through the decades since its inception by its founders. The company has been able to expand globally and has banked on its brand name and quality that has been the result of sound management practices to be among the leading companies in the world. Hence, it is no wonder that among the greatest strengths of the company is its ownership advantage. This has enabled the company to play at par or even over its domestic counterparts from other countries. The HP way has indeed given rise to the HP name recognized globally. Hence, the company has been successful at competing with both foreign and local brands even though the prices can be lower from competitors. In effect, when people patronize their products, they are not merely buying laptops but are buying HP laptops (Investments and Income.com 2011). Another factor that must be considered is the location advantage wherein the firm ought to be able to ensure that they are able to fine tune their operations with their selected locale or vice versa whereas they choose the area which is more in tune to their preferences. Here, there are three advantages that must be considered. First is the economic advantage and this goes beyond the capability of buyers in that country to purchase their products. It also captures the important infrastructures that may support their business operations such as transportation, communication systems and the availability of materials and of course labor. It would be a waste of time for HP to set up business to set up shop in some dirt poor country that is void of infrastructure that will necessitate the utilization of the products and services that they offer. Also, any company would avoid countries with political conflicts which bring about the second advantage which is the political advantage. Countries that are boasting of good governance and respectable taxing institutions are usually the places to go that attracts foreign business strongly. Finally there is the social and cultural advantage wherein the culture plays a crucial role. As mentioned, HP is not merely an employer but a seller and buyer as well and the company ought to be able to fit in to the prevailing trends in their target country to ensure the sustainability of their business. Also, it is important that the company takes into account the internalization advantage that they may utilize wherein they can opt to use different forms of strategies to get into their target markets. HP has many subsidiaries in different countries and they ensure that the company’s strategies are aptly calibrated to the preferences of the host countries (Investments and Income.com 2011). Hence, the company ought to continue their innovative nature to continuously develop their products. The HP way has provided the company with the ways and means to do so but as Robinson and Chiang (2002) puts it, all companies whether they are neophytes or are already established must be able to ensure that their products are continuously patronized by their markets as well as the inherent need especially in the technology sector to anticipate these demands and act on them as swiftly as possible. References Adler, N. J. & Gundersen, A. 2008. International dimensions of organisational behaviour, 5th edn. South-Western, Mason, Ohio. Cascio, W. F. 2009. Managing human resources: productivity, quality of work life, profits. 8th edn, McGraw-Hill Irwin, New York. Baker, M., Keeton, K. and Martin, S. 2005. Why traditional storage systems don’t help us save stuff forever. HP Labs, June 27, 2005 Drummond, G. and Ensor, J. 2001, Strategic marketing : Planning and control. Elsevier. Executive round table series 2004, Managing the organisational impact of global operations. Center for Digital Strategies, Tuck School of Business and Cisco Systems, Inc. Feitzinger, E. and Lee, H.L. 2009, Mass customization at Hewlett-Packard: The power of postponement. Harvard Business Review, March 3 2009 HP website. HP History. [Online] Available at: http://www8.hp.com/us/en/hp-information/about-hp/history/history.html HP website. HP Timeline. [online] accessed on September 17, 2011 accessed from HP website. HP History. [online] Available at: http://www8.hp.com/us/en/hp-information/about-hp/history/history.html HP website. HP Products and Services. [online] Available at: http://welcome.hp.com/country/us/en/prodserv.html HP Annual Report 2010. [online] Available at: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzkyMjF8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 HP Global Citizenship Report 2010. A connected world: the impact of HP global citizenship in 2010 – and beyond.[online] Available at: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzkyMjF8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 Investments and Income.com. OLI Paradigm – the eclectic theory was evolved by John Dunning. [online] Available at: http://www.investmentsandincome.com/investments/oli-paradigm.html Kaplan R. & Norton D. 2005. Balanced scorecard: Measures that drive performance. Harvard Business Review. Karr, B. and Gabrielson, J.T. 2007. Market driven product development strategy. Blue Canyon Partners Inc. 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[online] Available at: http://www.valuebasedmanagement.net/methods_porter_diamond_model.html Appendices Appendix 1 Product Development and Manufacturing (HP 2010 Annual Report) Americas Aguadilla, Puerto Rico, Cupertino, Roseville, San Diego and Woodland, California, Fort Collins, Houston, Texas, Colorado, Boise, Idaho, Indianapolis, Indiana, Andover, Massachusetts, Corvallis, Oregon, LaVergne, Tennessee, Sandston, Virginia, Vancouver, Washington Europe, Middle East, Africa Herrenberg, Germany, Leixlip, Ireland, Kiryat-Gat, Nes Ziona, Netanya, Israel, Amersfoort, The Netherlands, Sant Cugat del Valles, Spain, Erskine, United Kingdom Asia Pacific ChongQing and Shanghai, China, Udham Singh Nagar, India, Tokyo, Japan, Singapore Appendix 2 Hewlett-Packard Laboratories (HP 2010 Annual Report) Bangalore, India Beijing, China Bristol, United Kingdom Fusionopolis, Singapore Haifa, Israel Palo Alto, United States St. Petersburg, Russia Read More