Post on 21-Dec-2014
description
Team 9: Hewlett-PackardAshvin Jasvantlal ∙ Yizhao Tan ∙ Aniket Patankar
MS&E 274 – Final Presentation
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Current HP
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Causes of Stagnation – Personal System Segment
Two sided network effect reduced to zero
Many similar competing platforms carried by Retail channels
Supporting Ecosystem Shared with Competitors
No disruptive innovation. Incremental innovation can be easily imitated
Desired Form Factor Rapidly Changing
Platform: HP
Laptop/PC
Users
Software / OS
Developerse.g.
Microsoft
Chipset manufacture
rse.g. Intel
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Causes of Stagnation – Printing Segment
Value Chain Business Model
Diminishing Value for Downstream Customers w/o rapid Innovation
Old Vision + Weakening Holder -> Eroding revenues
Shrinking Customer Base
HP Printers
Cartridges Vendor
Printer PageManufacturers
Distributors/Retailers customers
upstream
Value toDownstreamcustomers
Value added by agents within the value chain
Supply chainlogistic
Continue improvingAlong this pathLeads to stagnation
Printer PartsManufacturers
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Core Competencies - VRIN
HP’s Core Competencies
Valuable Rare In-imitableNon-substitutable
Personal Systems Group
• Profits & Revenues.
• High Quality. • Broad portfolio.
• Unmatched products.
• PSG’s R&D Capabilities that is underutilized
• Knowledge in markets.
• Portfolio is diverse• Knowledge is well kept
and acquired with industry experience.
• Diverse products and partnerships are unique.
• Printers have little substitutes.
Enterprise Systems
• Major share of revenue and growth rate of 11%.
• Valuable direct sales channel.
• High Efficiency and client satisfaction.
• Strong Holder.
• Strong technical and knowledge base.
• Direct sales of products to partners are also more streamlined than competitors.
• ES’s technical knowledge base is accumulated with years of industry experience.
• It will take years for an outsider to gain these knowledge and intellectual capital.
• Strong support network to enterprise customers
• ES: Enterprises continue to rely on vendors like HP’s ES to provide solutions , systems and troubleshooting.
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Bright Side for HP PC & Printers
One of the top performing product lines still are from Personal Systems & Printing
Desktop Sales UP 10% Y/Y, Consumer Grade Printers Revenue UP 15% Q/Q
Continuing Product Demand & Recognizable Value in the Market
Perhaps the only company that offers products in every segment of computing from data center to devices
Customer’s feedback: Want to see HP as a single / un-split company so long as they prove “Together is better”
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Knowing Your Customer’s Changing Needs
Personal Computing
Printing
Tablets, Portable Smart Devices
Books/Content on Demand
Current PCs to become commodity PC, like TV
Integration With Digital Content for publishers
Wearable Devices, information appliances
Flexibility, permitting last minute changes
High Customization, Embedded Computing in
appliances
High definition Media / 3D
Gesture Based I/O, Advanced Human
Computer Interaction
Growing multimedia printing footprint
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SWOT Analysis
Strengths Weaknesses
ThreatsOpportunities
Inte
rnal
Ex
tern
al
• Globally Recognized Hi-tech Brand • Expertise in developing personal
systems, printing & enterprise hardware
• Well established supply chain • Web technology based product
marketing and sales• 24/7 Customer support
• Volatile Management & historically wrong business decisions
• Lack of in-house management consulting division
• Underutilized intellectual capital
• No aggressive investments in R&D
• Less global coverage• Growing demand for smart devices & information appliances
• Need for one stop shop for integrated software & hardware
• Target the aging market segment – their generation knows HP
• Joint Ventures in new areas
• Incumbent Competitor with lead in time & customer base
• Competitor’s superior technology and pricing
• High availability of substitutes• Ecosystem Partners turning
competitors e.g. Microsoft
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Recommendations
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Maintain HP as One
Two different strategies:
A. Maintain HP as single company and further develop new areas (Whitman)
B. Split HP Personal Systems Group and Enterprise Systems (UBS Analyst)
Current strategy by Meg Whitman is “Together is better”
Our team agrees on:
Recommendation A – Keep HP as One
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Strengthening Grabber-Holder Structure
Leverage Strategic Assets to provide Pivot• Financial Strength : $40 Billion in cash• Industry Knowledge & Expertise, Large Workforce• Infrastructure: buildings, equipment, production facilities• Extensive pre-sales & post-sales support
Keep Committed Agents• Ecosystem Partners with Strong relationships e.g. chip manufacturers,
suppliers and software vendors: Intel, Microsoft, others• Trusted Suppliers, Distribution Channel Partners, production
Incentivize Opportunistic Agents• Build New Customers: Brand Aware customer base outside of US • Build New Suppliers: New Chipmakers, Other OS Vendors• Provide Platform for New Software Developer Community
New Value Proposition based on Innovations• Disruptive Innovations in design based on new chips and new OS e.g.
Wearable Devices• Incremental Innovations in production & distribution of new products
Beach head to validate the idea: HP Slate 7 Chromebook
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(1) Latecomer's Strategy: Tablets, Smart Devices
Strength of Apple Trademark Design World Class User Experience High Price Point for Exclusivity Closed Platform: iOS High end hardware features
Strategic assets to support Design, Engineering
High Production Cost High Operational Expenses on
Marketing, Sales, Retail High Requirement to improve
rapidly Market Share, Brand value
High Market Visibility & Subject to constant scrutiny
Huge Expectations, High sensitivity towards product defects
High fluctuation
Flip Side of Incumbent's Strength Customizable Designs, Variety of
form factors Platform for Software As A Service Low cost, Lightweight Open for Multiple OS Support
Strategic assets to support Strong partnerships
Integrate services from various vendors
Become Marketing, Sales for each other
Build New Suppliers, Customers relations
Unknown suppliers that make quality chipsets
Help them to design and distribute new products suitable to your platform
Leverage knowledge in traditional PC customers to create excitement
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(2) HP Personal Computing:New Vision, New Platform
HP PC
Microsoft Windows, Intel
(Old Platform)
USConsumers
HP Personalized /
Wearable Devices
(New Platform)
New Vision: Platform For Software As A Service
Stagnant
Old Vision: Desktop, Notebooks For Consumers
Global Consumers,Enterprises,IT Decision
Makers
+HP Services
Multiple OS Vendors
Multiple Chipsets
App Developer Community
+
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HP PC : Dynamic Support and Push Cycle
Chip producer(performance) Pivot
(Assets inPC, Notebooks)
Growing Market Interest + Investment in Tablet, Wearable computing chipset startups
Applications Developer
Community
Supporting
Applications Developer
Community
Tablet peripherals,Touchscreen, Camera
Electrical components
Multi Vendor/ Open Source
OSSupporting
Growing Market Interest + Investment in operating systemsFor smart, personalized devices
HP Smart Devices
Supporting
HP Investment in R&D forIncremental innovation inPersonalized tablets / smart devices
Wearable Devices(performance and
coverage)
Repeat cycle
Supporting
HP Investment in R&D forHuman Computer Interaction To design gesture oriented / Wearable devicesDisruptive Innovation
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(3) Develop 3-d Printing
Forbes predicts this to be a $ 3.2 billion industry by 2016.
Existing infrastructure could allow HP to reduce retail price (effective grabber)
Reduce stagnation by entering the growing segment
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Optical component
makers
Software suites
Multimedia enhancers
suppliers
HP Smart Printing Platform
HP 3D Printers
Manufacturing Industry
Personal users Retailers
(Customization)
HP Printing Business Model Transformation
Two Sided Market
HP Printerssuppliers customers
Media
Personal users
Film productions
Multimedia
personal
High Def/ Special effect
Value Chain
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Applying Grabber-Holder to 3-d printing
Vision:Bring 3-d
printing to the mainstream
Brand recognition
in an unproven market
Effective ecosystem between
designers and customers
Use existing infrastructur
e to keep price
relatively low
Decreasing price will encourage
investors to enter certain segments
of industry
Strong Grabber
Holder structure
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HP Printing : Dynamic Support and Push Cycle
Chip producer(performance) Pivot
(Assets in HP Printers)
Investment in Tablet chipset, Wearable computing startups
HP 3D Printers
Supporting
Investment by IBM
HP Smart Printing Platform
Repeat cycle
SupportingInvested by IBM
Software vendor(applications)
Supporting
Microsoft andVC investors
PC peripheralsPC board, etc.)
VC investorsElectric companies
3D Printing Technology(functional)Supporting
Investment By Multimedia,Manufacturing Industry
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(4) Merger as last resort
Consider merging with other companies
If no turnaround within 18 months after acquistions
List of targeted companies:
1. Dell
2. IBM
3. Accenture
Benefits of Merger:
Grow value chain
Reduce stagnation
New large customer pool
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Accenture as Merger Target
Currently, Accenture best fit
Leveraging HP systems as Accenture consulting solution
Synergies
Complimentary expertise/skills set and core competencies
Accenture customer base: large market for HP
Could be turnaround pivot – bundling consulting and server/printer solutions
(from just consulting to consulting and implementation for Accenture)
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Thank you