THE GENERAL ELECTRIC AND THE HEWLETT PACKARD (HP) - Essay Example

? Business The General Electric (GE) and the Hewlett Packard (HP) A Comparative Study (College) Knowing the strategiesof other companies within the same industry would help one to achieve a competitive advantage by counteracting it. The competitive advantage refers to an advantage gained over competitors either by providing greater value to consumers, by lowering the prices, or by offering more benefits and service which justifies the higher price. Corporate strategies are the central point of achieving the competitive advantage by making assumptions on an organization’s external environment and its resources, and by creating policies on how the organization should operate. General Electric and Hewlett Packard are the two most influential companies in the technology market. A comparative study of the strategies used by GE and HP reveals that both have formulated analogous strategies in the various aspects of their business operation. ----------------- Introduction The Hewlett-Packard Company, commonly known as the HP, is a well established and very large global firm founded in 1939 by Bill Hewlett and Dave Packard and headquartered in California, United States. Their products focus mainly on technology like computer, printing, digital imaging, and also software services. General Electric (GE) is the producer of diversified technology, media, and services, and was incorporated in 1892. It offers products and services ranging from aircrafts engines, power generation, technology in medical imaging, business and consumer financing, and many more over 100 countries. The GE has a long history of success in their technological trade and their achievements prove the value of their view, “why predict the future when you can create it?” (Our history). The Economical Environment The economical environment of the business consists of four elements, they are Political, Economic, Social, and technological. The economic environment today is moving through vibrant and unstable phases due to globalization and increasingly competitive markets. However, the Hewlett Packard Company takes advantage of exploiting new markets all around the world, engaging with other multinational corporations. A big advantage to the company is their product diversity which helps them to survive the recession. At the same time, the GE is faced with many social issues regarding environmental pollutions. It has become a topic for controversies with regards to the immense ownership and control over the media sources. The company has been alleged for spending millions of dollars on commercial ads and television program sponsorships to ensure its environmental friendly image. The General Electric Company performs its functions in micro and macro environment. The micro-environment consists with customers, suppliers, and other stakeholders of the business. The GE treats its customers as an integral part of the company in the successful running of the business. The GE has taken higher efforts to integrate the company’s view with the customers’ view rather than considering them as mere investors. As customer service has been considered as the vital part of the performance, it maintains three crucial components regarding the quality offered to customers; the employees, the process, and the customers themselves. On the other hand, the organizational culture of HP is built up progressively over a time, which helps the employees to define how they feel about their job. The HP has succeeded in creating a positive influence of the culture on their employees. A positive culture helps to stimulate commitment towards the job and to achieve the proposed goals. Decision Making The General Electric Company employs some basic strategies in their decision making. One among them is to invest and tap the internal market within the reach of the company. This strategy seems to have utilized the principle that ‘a business must be employee-oriented if it wishes to be customer-oriented’. However, the HP strategy is based on the external market of the organization. This strategy requires the review of the general economy as a whole and about the most suitable market for its products. They also formulate policies to retain the existing consumers and to build a long term relationship with the targeted segments of customers. Critical evaluation and decision making are the most important managerial functions in today’s business environment. Firms use various methods and tools in making important business decisions and further reflect if the decision they make would meet the challenge. The comparative study between the GE and the HP reveals the regular changes the companies have been taking in their decision making styles. Their decision making processes often consisted nine steps, such as identifying the problem, defining criteria, setting goals and objectives, evaluating the effect of the problem, identifying the causes of the problem, framing alternatives, evaluating impacts of the alternatives, making decision, implementing the decision, and measuring its impacts. Management Styles The General Electronic management style forecasts a vast multinational technology and services conglomerate; and the management style or strategy of GE can be quoted as, ‘be first or second in your global market, or else’ (cited in Slater, 2003). However, the management style of Hewlett Packard is based on the idea that it is important to recognize the team and the people who contribute a great job to the business growth. Therefore, human resource management is considered as an important part of their management style. The HP’s past acquisition of Pergrine created the company’s portfolio even more diverse, though their Open Views lacks management capabilities. Evidently, both the companies had difficulty in taking managerial decision on some of the cases. They had likely identical chances of creating a potential decision regarding the issues such as; Whether to choose members for skills or for availability If they should focus on ideas or should focus on tasks Whether the work should be assigned individually and remotely Whether proper attention should be given to the average customer or should only address the difficult customer. The HP selects the most suitable leadership style in their business to achieve high-margin products and to win competitive battles by creating new market opportunities. Their research team, packed with thousands of researchers in the Global Research Centers is connected with the market and the customer needs. In contrast to HP, the General Electric Company has a strong technical leadership creating massive installed base, which can provide high-margin services for decades. For example, the GE has sold over 100,000 long-lived get engines, power turbines, locomotives, and medical devices which increased its profit margin. SWOT analysis The SWOT analysis tool is the structure for analyzing the internal strengths and weaknesses of an organization. It is also useful in identifying the external opportunities as well as the threats to a firm. The SWOT analysis of Hewlett-Packard reveals that after the merger with the Compaq, it has become the largest computer hardware and peripherals company in the world, with the 20th position of the Fortune 500 list. They would use the analysis to improve the competitiveness and cost advantages of products and services to maintain a skilled brand leadership in the industry. A proven track record of cutting-edge technology would ‘increase the customer satisfaction and loyalty in the market leadership’ (SWOT analysis template). On the other hand, the General Electrics use the SWOT analysis to find out better opportunities to move into new markets with increased customer support. They draw decisions over the issues of acquiring other organizations and capitalizing new technologies. The company can quickly react to the market responsiveness by utilizing such methods of analysis. Leading companies like Intel and Cisco think that considering the economy today and the likely global recession, the amount spent by customers on technology would turn down rapidly affecting corporate purchase. However, Hewlett Packard on the other hand, has expressed rather an optimistic forecast. They expect a significant growth in the purchase of their products. HP holds the optimism that it will be able to meet its expected growth of 5 percent in recent quarters. During the economic gloom, it has done at least well competitively and will come out from the present economic ambiance with even stronger face. On the other hand, GE’s success is predicted on the ‘accurate assessment of dynamic forces’, which are reshaping the world and on the well placed strategy that makes the best use of the opportunities presented by such dynamic forces (Our viewpoints). Conclusion The emergence of increasingly competitive markets could be attributed to Globalization and new technological environment to a great extent. The economic changes in the global market have forced both GE and HP to make immense changes in their management to withstand adverse situations. Today, as the business environment is moving unsteadily through dynamic and turbulent stages, it is too hard for a firm to formulate efficient solutions to equilibrate the profitability. References ‘Our history’. (n.d). Imagination at Work, General Electric Company. Retrieved from http://www.ge.com/company/history/index.html ‘Our viewpoints’. (n.d). Imaginaton at Work, General Electric Company. Retrieved from http://www.ge.com/news/our_viewpoints/index.html Slater, R. (2003). Jack Welch and the Ge Way: Management Insights and Leadership Secrets of the Legendary CEO. India: Tata McGraw-Hill Publishing Company. ‘SWOT analysis template’. (n.d). HPInvent. 1-2.Retrieved fromhttp://h41112.www4.hp.com/wfm-docs/SWOTAnalysis.pdf Read More