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New venture international or domestic
New venture: international or domestic
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There are three key considerations that I will make before deciding whether to take my business to the international level or to operate in the domestic market. There are many benefits that company reaps by expanding its operations to the international market compared to operating in the domestic market only. However, this decision should be made carefully since there are certain factors that must be put into consideration, to ensure that the intended expansion is successful (Moore, et al, 2000). The first criteria I will use in deciding whether to go global is asking my self whether i am familiar with the target market. This includes the cultural beliefs of the people there as well as well as the prevailing market conditions. This will help me assess whether my new venture stands any chance of winning a share of the target market. Taxes and government regulations will also be put into considerations since directly affect the profitability and operations of a company.
The second consideration that I will make before deciding whether to take my new venture into the global market is whether I have the necessary resources to support the venture. Venturing into the global market requires the company to have enough resources and also to come up with an export department responsible for overseeing the operation of the foreign markets (Campbell, 2007). This will require me to have a sales manager who will oversee all the operations of the international. Such undertakings are extremely expensive and risky especially when considering liability and overhead.
The availability of companies willing to enter into a joint venture with my company is another criterion that I will consider before expanding my operation sin to the global market. Companies that go it alone when venturing into markets find it exceedingly hard to win over customers and establish a sizeable market share. Partnerships are highly effective since they counteract any political or cultural issues that may arise, as new companies are usually viewed suspiciously. By entering the market through a local company, the firm establishes itself more quicker, as the task of sales and marketing is shared with a local enterprise already in the market. Great considerations should be made when choosing a partner to ensure that the partner sufficiently fits into the goals and beliefs of the company and its customers (Campbell, 2007).
Advantages and disadvantages of taking my business into the international market
The first advantage of expanding into the international market is that it brings about faster growth. Going global brings new customers to the company and this means increased sales. With increased profitability, the company grows quickly and may expand into more new markets. Compared to companies that operate in local markets, multinationals grow at a faster rate and are more stable. The second advantage of expanding into new markets is that it enables a company gains access to cheaper inputs. When companies operate locally, they are sometimes at risk of buying inputs at inflated prices (Thill, et al, 2007). This is because their main source of inputs is the local supply which may be susceptible to occasional fluctuation of prices. By the nature of their operations, multinational companies can source for labor or raw materials from any market in the world. Expanding into new markets offers businesses new market opportunities. In turn, this transforms into new opportunities for expansion increased income and growth. More to this, bigger markets mean larger customer base, increased earnings and larger profit margins. Finally, expanding to international markets, enables a company diversify its market, therefore, making it less vulnerable to fluctuations in demand in the local market. This enables the company to maintain its sales and profitability, thus ensuring that it remains stable.
Disadvantages of taking my business into the international market
One significant disadvantage of expanding into the international market is that it requires a lot of money. A company that needs to venture into new markets need to set up new facilities abroad, hire new employees, set up information and communication systems and pay for new licenses among other expenses. Raising this money can be quite a challenge to some companies especially new and small ones (Hall, et al, 2008). The second disadvantage of expansion into global markets is that it comes with new foreign regulations and standards. As a firm expands, it is forced to work under new rules and standards compared to what it is used to. This may force it to change some of its operations like production, packaging and marketing resulting in extra expenses. Multinational companies have a complex organizational structure compared to national ones. This means that as a company expands, it will be required to retrain its management to enable it deal with new challenges brought about by expansion into the international market. This in turn, leads to increased expenses. Finally, operating in the international market is immensely complex , and it sometimes may lead to delays in payments. If nothing is done, such delays could affect the cash flow of the company involved.
As my business is new, I will concentrate on the local market first. This is because the company is not yet financially stable to support expansion into overseas markets. More to this, there is a lot of untapped potential in the local market that I feel I must tap into first before thinking of expansion into international markets.
The first law that would affect the operations of my business internationally is the US trade laws. These laws inflict sanctions on countries that are judged to violate certain U.S laws. Such laws could make it impossible for my company to offer its services in the United States. The second law that could affect the international operations of my business is the consumer privacy law. As an insurance company, it will be mandatory for me to ensure that all data and information about my clients is kept safe. This law will require me to invest heavily in information technology to ensure that all client data is kept safe.
References
Dave Hall, et al (2008). Business Studies: Fourth Edition. Pearson Education, Limited.
Campbell, D. (2007). Comparative Law Yearbook of International Business. Volume 29. Kluwer Law International.
John V. Thill, et al (2007). Excellence in Business Communication. Pearson Prentice Hall.
Michael L. Moore, et al (2000). U.S. Tax Aspects of Doing Business Abroad. American Institute of Certified Public Accountants.
The habit of consuming alcoholic beverages is common in the society
The habit of consuming alcoholic beverages is common in the society. Currently, one out of six people have a drinking problem (U.S Dept., 2014).Sadly, the habitual use of alcoholic beverages results in physical dependency on this drug. The term alcoholism refers to continual use of alcoholic drinks that results in being preoccupied with alcohol and may lead to lack of control. The physical dependency could become chronic resulting in health problems, for example, liver cirrhosis. Also, it may lead to family issues, interferes with work or other societal problems. Alcohol is a depressant that affects the central nervous system. Moderate intake of alcohol leads to poor judgment, poor coordination and loss of balance. High concentrations of alcohol results in long-term health complications People indulge in alcohol intake for various reasons, for example, to socialize with friends, to relax or to forget about certain unpleasant issues. A drinker tends to feel relaxed, more confident and even talkative after consuming some amounts of alcohol and a continual intake of the same amount may not have the same effects on the person thus encouraging increased intake. In DSM-IV, alcohol abuse refers to a psychiatric diagnosis where a person consumes alcohol despite the consequences accrued to this consumption. In alcohol abuse, the individual is already facing the consequences of their actions and is dependent on alcohol.
The causes of alcoholism are quite unclear. Current research states that genetic, social, environmental and psychological factors influence alcoholism. The symptoms identified are such, as when person drinks more than planned, has tried to reduce or stop drinking and failed.Also,where a person has cravings for alcoholic beverages, develops withdrawal symptoms, for example, nausea or continues to drink even when this habit has a negative impact on their relationships with friends, family or workmates(NIAA,2010).In an environment where alcohol is socially acceptable, is available and marketed both nationally and locally or the public policies promote alcohol consumption, issues such as alcoholism and alcohol abuse are likely to occur. Psychological factors such as issues relating to personality traits learned cognitions and behaviors amongst others, for example, anti-social behaviors. Research shows that there are certain genetic components that influence alcoholism (NIAA, 2010).
Consequences attributed to alcoholism can be short term or long term. Short term symptoms include hangovers, blackouts or memory loss. Long term consequences are cancer, stomach problems, memory loss, liver cirrhosis or brain damage (NIAA, 2010).Alcohol poisoning occurs when there is excessive intake of alcohol in a short period and it may lead to loss of balance, because of the effects of the drink on brain functions, stomach irritations that result in vomiting, affects the nerves, dehydration or lowering of blood sugar levels (NIAA, 2010).Alcohol intake can also cause cancer, for example, liver cancer, mouth cancer, breast cancer or bowel cancer. In 2010, there were 3789 deaths as a result of liver cancer in the UK. Liver cirrhosis is the scarring of the liver that leads to poor functioning of this part of the body. Infectious diseases can also result from the intake of alcohol, for example, HIV due to the impact of alcohol on the brain that leads to loss of control (U.S.Dept, 2014).In women, the effects are worse, even when they drink similar amounts as men, this is because women’s bodies process alcohol at a slower rate than men. Recently, the alcohol consumption gap between men and women has decreased (), resulting in women consuming larger amounts of alcoholic drinks than they used to traditionally. Alcohol consumption increases the risk of breast cancer, affects fertility and increases the negative effects of menopause(Drinkware,2014).The physiological differences between men and women make women more vulnerable to the effects of alcohol, for instance, women’s bodies have more fat to water ratio than men making them less able to dilute alcohol in their bodies. Also, they have lower levels of Alcohol dehydrogenase, and as a result, alcohol takes longer to metabolize than in men. Lastly, women have less tissue to absorb the consumed alcohol. Pregnant women should not drink because alcohol consumption may lead to fetal alcohol syndrome, low birth weight and also, it increases the risk for premature labor (NIAA, 2010).
Adult men and women are not the only victims to alcoholism and alcohol abuse.In the U.S.Studies have shown that out of the 14 million people in the States, who are independent on alcohol, are between the ages of 18-29, and persons above 69 years make up the group of least alcohol users. The effects of alcohol vary with ages. In teenagers, misuse of alcohol can lead to binge drinking, unsafe sex, impaired brain development or death, particularly when teenagers drink and drive. Binge drinking refers to consuming large amounts of alcohol over a short period so that you get intoxicated(Rockville,2007).Elderly people, or rather people above the age of 69, are more sensitive to the effects of alcohol, because their elderly bodies metabolize alcohol more slowly than in younger people. An older person can develop problems with alcohol even if they do not have a drinking problem or they have not changed their drinking habits.Excessive alcohol consumption worsens some health conditions such as high blood pressure or diabetes. In addition to this, alcohol intake reacts harmfully with a variety of medications, for example, arthritis medications and alcohol intake can increase stomach complications(U.S.Dept,2014).Withdrawal symptoms occur in people who have been drinking for a significantly long period and suddenly stop or significantly reduce their intake. These symptoms can occur within two hours after stopping or persist for weeks. They range from mild anxieties to severe complications such as delirium. Alcohol withdrawal symptoms can be severe and lead to health conditions such as heart disease, seizures or lung disease (NIAA, 2010).
The government has set up guidelines in an attempt to regulate alcohol intake and thus mitigate its impacts. In U.S., for example, Women are advice not to drink more than two or three units a day, that is abouta175 ml standard glass of wine, whereas, men are advised not to drink more than 3-4 units a day, regularly. ABV found on alcoholic beverages, refers to the average beverage intake that a person is supposed to take, and it varies differently on different alcoholic beverages.The guidelines based on scientific research and evidence is so as to promote safe drinking in the country (NIAA, 2010).
Alcohol abuse causes a lot of social problems. It can lead to family issues and may result in divorce, and may negatively affect children. Other personal relationships are also affected, and this may lead to disagreements and frustrations between the abuser and other people in the society. Dependency on alcohol leads to changes in personality behavior and thus strains the relationship between an alcoholic and their personal, financial and workplace relationships (WHO, 2009).
In conclusion, it is important for each person to take individual responsibility regarding alcohol consumption. The intake of alcoholic beverages is a choice and, therefore, responsible drinking is a decision only made by the individual. In cases, where one suffers from any of the symptoms, then they should seek medical attention, guidance or counseling on the issue. However, Prevention is surely better than cure and, therefore, it is of paramount importance that parents set good examples on their children regarding alcohol use. It is important to note that alcohol is a great contributor to diseases globally, and it contributes to other societal harms to the drinker and to others. Research has shown that alcohol can also influence suicide, cases of homicide and may result to death.
Hewlett-Packard Company
Hewlett-Packard Company
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Hewlett-Packard Company
Hewlett-Packard is one of the few technological companies that share an interesting storyline of commencing from limited fortunes. The HP Company is a US multinational technological entity that specializes in a range of products such as laptops, tablet desktops, printers, monitors, and All-in-One PCs. In an overall sense, the company provides technologies, products, software, services, and solutions to consumers. Consumers are individual product buyers, large enterprises, SME’s, and the government. In the current technological trend, HP has manifested an interest towards mobile handsets. This occurs in the case of Android phones that involve advanced software and exquisite exteriors. In spite of the idea that the HP Company spreads around the world, the corporation’s headquarters occurs in Palo Alto, California, US.
Strategic changes over the years
Bill Hewlett and Dave Packard founded the HP Company in 1939. The Stanford University classmates founded the company in a car garage and developed their first product for Walt Disney Company. The company has shared a history of growth from modest beginnings in the Great Depression. With a primary investment of US $538, the company began as a partnership. In the August of 1947, the company became incorporated, and went public ten years later. It is crucial to highlight that one of its first products was a precision audio oscillator. This was the beginning of innovations that cut down on the prices of sound technology products at that time. The Walt Disney productions was one of the first initial companies that set the reputation of HP company by buying their audio oscillator at a price that was less than the market figure.
It is crucial to highlight the beginnings of the company into projecting the future capability of the company. This is because the business gradually grew through challenges and alterations that made it appeal to the given market. Given the uncertain and ever-changing nature of the technology industry, the company had to adapt ad risk different trials into gaining the market. As the markets evolved in their needs, the company had to reestablish their nature of products in meeting given demand. However, the company did not thrive on following trends. The company instigated trends that the other companies had to follow. For instance, Hewlett and Packard made their first audio oscillator from simple elements such as the small incandescent light bulb. By utilizing cheap products the company was able to produce quality products at low costs. In this sense, the company could allow cheap prices for customers who would then purchase the products in large numbers.
The company’s current scenario is critical in projecting a future for both the industry and the company. It is notable that the company carries out its activities through seven distinct segments. This includes the Personal Systems Group (PSG), Enterprise Servers, Storage and Networking (ESSN), HP financial services (HPFS), HP software, Corporate Investments, Imaging and Printing Group, and Services. This is an easier way of approaching a complex market. The HP Company realized that it was facing a market that possessed segments of distinct needs. In this perspective, it had to articulate its services according to the requirements of each segment. For instance, it is notable that the individual consumer market values trends and superficial features over functionality of computers. In turn, enduring desktop computers would be preferable to exquisite laptops that present a high probability of attaining damage. This is a tricky concept that businesses can rarely integrate in providing unified services to all segments of clients.
The company has a wide array of offerings that seek to exhaust every type of consumer. This includes multi-vendor services, personal computing, business process outsourcing, technology support and maintenance, infrastructure technology, imaging and printing products, and consulting services. Besides, it provides networking products and solutions, enterprise server and storage technology, security risk solutions, and information technology management software.
By 2012, the company had succeeded into integrating its IPG and PSG services. This integration is an element that has continued in areas such as the transfer of business intelligence services unit to Application and Business Services segment (Dubrin, 2011). In 2012, there was the transfer of Scitex and Indigo units to TS business that occurs in the IPG segment. The company has been participating in realignments that help in harmonizing their products and services towards smooth management and operations. It is notable that some of the initial hardware businesses had a considerable part of their operations in software segments. In ensuring quality production, the units have to move into software segments.
Segments
The seven segments further divide into distinct units and product lines that differentiate along brand lines and names. In the Personal Systems Group, there is the provision of workstations, personal computers, services and software for consumer and commercial markets, calculators, and other accessories. The commercial clients’ group includes commercial desktops, commercial notebooks, and workstations (Oliver, 2012). On the other hand, the consumer clients’ products include consumer notebooks and consumer desktops. The commercial personal computers comprise the HP EliteBook notebooks’ line, HP ProBook, Compaq elite, Compaq pro, HP Elite and, HP Pro lines of business. Besides, the business unit entails the Omni and TouchSmart PCs, HP Thin Clients, and HP Tablet PCs. Consumer personal computers entail the Compaq and HP series that further comprises notebooks, desktops, and the TouchSmart line of products.
As a strategy of dealing with possible future scenario, the company has recently emphasized on raw services. The services’ business deals with elements that do not concern with physical product offer. Services are tricky business operations that require dexterity and complex customer needs. In this view, the HP Company has engaged in outsourcing and technology services. Outsourcing, as a business activity, is an instrumental practice of fetching revenues over long distances without actual physical presence in given places. In the company’s scenario, it offers two approaches to outsourcing. To begin with, it involves its professionals in giving expertise to related companies towards making their products. In addition, it targets the informed consumer markets who share technological problems that relate to hardware and software products. The typical infrastructure technology outsourcing elements comprise the workplace and data center services (Egner, 2009). The workplace services involve compliance, security, network and communications, and business continuity services. These technology services avail in pre-packaged offerings, service contracts, and individual basis-provisions. It is crucial to highlight that the company has employed its brand and reputation into providing additional outsourcing services in unrelated sectors such as finances and administrative issues. Most emergent companies face problems, not in their industrial activities, but in propping services such as administration and finances. For instance, a large company presents additional challenges of strategizing on finances across operational branches and various departments.
Outsourcing is a critical strategy towards the technology industry that presents significant operation costs. In order to set up new companies in other countries, the company undergoes rigorous procedures and cost incurrence that involves taxes and plant set-ups (Dickie, 2006). In addition, there is the requirement for new employees who may not present additional profits that correspond to respective costs. In this regard, the company set up communication hardware and software that comprises contacts that stretch over long distances. Technological solutions that comprise consultancy are relevant in the outsourcing business since they do not depend on presentations of physical products.
The services segment extends across applications, business process domains, and infrastructure. These services prop on leveraging investments in global supply and delivery, support and consulting professionals, and standardized methodologies. In the applications’ services, there are offerings on maintenance and management, system integration, application development, and modernization.
Management system
In its propping structures, the company has employed a decentralized system that has served to keep its flexible in spite of the ever-burgeoning size. The company is an assortment of more than 50 operation divisions that share the global responsibility for particular product lines. The company established this system for notable reasons. To begin with, the strategy strives to reinforce and enhance creativity in the company. Technology companies operate in a tricky environment whereby products do not establish enduring brands. Creativity, in employees, accords the innovation that establishes new products in the strict consumer markets. In addition, the centralized system was instrumental for reduced bureaucracy. Reduced bureaucracy is critical for a large company in quick decision-making and reduced costs in procedures and protocols. Since technology companies apply to given markets, it is critical to enable quick decision-making in particular markets (Zell, 2007). Each market share specific challenges that require unique strategic decisions in realizing optimum revenues. Besides, the decentralization would help in problem solving at the lowest levels and departments. By encouraging decision-making at such levels, the upper managements do not face the constraints of many decisions that suffocate fast operations.
It is observable that the company possesses vertically-integrated divisions that own critical departments such as R&D, marketing, manufacturing, controllership, personnel, and quality assurance activities. It is notable that the company further keeps low number of employees in these divisions. With an employee base that does not stretch beyond the 1500, there are limited bureaucracies and quick decisions. In this perspective, the company also creates a division when particular product lines become sizeable to prop continued growth from its returns. Divisions that entail related products usually share a link in common strategies. These groups comprise respective field sales organizations that enable offerings on customers’ integrated solutions and consolidated marketing g efforts. This is because activities, such as marketing, involve expensive procedures such as advertising. Since advertising consumes significant finances, it is efficient to make adverts as packages that involve numerous products. Once the products are related, marketing becomes an efficient venture.
Corporate culture
The current HP’s success is attributable to the corporate culture that it invented long ago. The initial managers developed a management philosophy and relationship systems that defined the American way of running businesses. This system passes on through subsequent managers and employees through an acculturation process that gradually convinces participants of its benefits. These relations’ philosophy comprises virtues such as respect and trust for all individuals.
The US-located company has principal features that may contribute towards its future success or failure. To begin with, it is notable that the company operates in two technological industries. Unlike the oil industry, it is counterproductive to view the whole technological industry as a single entity because it involves various activities. This suggests that the company lies in the two technological industries of IT services and consulting and computer software and hardware. HP’s main competitors include Apple Inc., Lenovo Group Limited, Dell Inc., Microsoft Corporation, Samsung Electronics, and many others.
Comparison to market and industry
The company presents a low price-earnings’ ratio that indicates two possible things. To begin with, the entity might be a sterong company that investors undervalue in relation to the industry’s competitors. On the other hand, it could be a weak company that market analysis has properly discounted for its 2011 performance. The price-to-book ratio presents a similar case since it presents a low figure, of 1.49, as compared to the industry’s median value of 5. 03. While the respective industry’s and market’s price-to-cash flow median ratio measures 12.61 and 10.29 respectively, the company’s given value is 4.89. This means that the company is not worth the assets and cashflow that it generates.
Recent perfomance
The company has presented an inconsistent and shoddy growth pattern in the recent past. Over the past few years, the company has struggled against fruitless acquisitions, such as Palm’s purchase at a cost of $ 1.2 billion, and continual ineffective strategies. HP has faced reductions in its PC market share. In close relation to the same, the company has faced a new competition from smart phones and tablet computer which are the current preferable mode of computing. These new elements are quickly replacing laptop computers and desktop computers as computing platforms. Due to a slump in PC sales, the company’s stock has considerably fallen. It is notable that the entity has faced an ever-shifting management that fails to align the company’s strategy towards the markets’ demands.
In 2011, the company stated that it would exit the tablet computer and smartphone business. Thereafter, the company would strategize on cloud computing, software and solutions, which emphasize on enterprise, and government and commercial markets. This is a decision that sprung from HPs TouchPad tablet’s failure in competing with the Apple’s iPad. As the company cut back on research and development and large acquisitions, the net income dropped to $200 million. This was a 91 percent drop that disappointed shareholders by cutting back on share values from $ 1.10 a share to 12 cents a share.
Prognosis
The future is an element that presents notable challenges for the company and the HP Company. To begin with, it is crucial to realize that unrelated issues such as the employee management, corporate responsibilities, and customer care will serve towards a prominent future. When the Apple Company launched its sleek I-phone, there were no initial thoughts of competition from rival companies. As time progressed, it was evident that other companies were determined to produce alternative products. One of the initial alternative products to the Apple’s Smartphone was the Google-enabled Android phones. These Android phones availed prominent features at much lower costs to the lower-end customers. The HP Company has produced tablets and Android-phones in the new phenomenon of reacting to a possible monopoly by the Apple Company (Ulph, 2011).
In presenting the possible future of the company, it is crucial to highlight the strength, opportunities, weaknesses, and threats that face the company. The opportunities and threats avail through the industry while the weaknesses and strengths describe the internal state of the company.
Strenghts
In term of strengths, it is notable that the company shares a robust presence in China. China is a new advanced economy that presents benefits from two fronts. To begin with, the Chinese market provides a strong market for HP products. This is due to considerable income that increasingly becomes available to the consumers. As income of individuals increase, their proportionate spending on basic foods recedes while their expenditure on luxuries surge.
The current China’s economic growth pegs at a value that ranges around 8 percent. The company has established its investments in the market and expanded its service and product offerings, especially, its service and enterprise divisions. It is notable that these segments provide the most profitable HP’s products in terms of enterprise solutions and cloud computing. As the company strategically expands into the Chinese market, it contributes into a robust competitive edge for the entity in the near future. Besides, China offers cheap raw products and labor that serves as a strategy of expanding profits. By establishing its operation in China, the HP Company will take advantage of the easily available and cheap raw products.
The HP Company is the world’s foremost PC vendor with more than 16 percent market share. Besides, the company is one the principal service network products. The company thrives on its huge presence all over the world thereby according the entity a robust brand reputation. This is a system that HP has created by offering products at different price levels for consumers. In the personal computers’ market, HP has become associable with quality products that last. According to Intraband, the entity was in the top 15 most valuable brands, in the year 2012, in the world.
It is notable that the company thrives on a diverse product portfolio. By encouraging a diverse product portfolio, the company caters for the unique needs of consumers. In this sense, the company captures all types of consumers. By respecting the state of the current technological industry, the company has shifted from its core Personal Systems business to more lucrative and profitable services business and enterprise solutions. Besides, the company has offered more concentration on the handset market that demands multiple applications and user-graphics. The mobile-handset market is a critical future outlook in a market whereby consumers are expressing more preference towards products that present less bulk. Furthermore, the handset market creates additional market on applications and related solutions’ business. The company has employed a strategy of creating numerous product and service lines. In this perspective, as some businesses face out, the relevant ones remain lucrative. The HP current’s diversification surpasses that of rival companies, and this makes the entity less susceptible to shifts in the different markets and industries.
Weaknesses
The company presents notable weaknesses against its future survival. To begin with, the company has expressed incompetence in its acquisitions. Acquisitions are critical towards tackling the future’s uncertainty in terms of product lines and revenue. By merging, companies avoid the competition that dictates the amount of revenues that technological products harness. In the last 10 years, Hewlett-Packard has acquired over 50 technology companies. While some acquisitions added new products and skills and enhanced revenues, the rest of the businesses either added no value or were detrimental to the company.
Besides, the company has manifested a dependence on PC sales which only contribute 29 percent of income. The market for personal computers has reached its peak. This means that it is high likely to either grow slowly or decline after a few years. Coupled with declining margins on computer hardware products, this division is a significant weakness for the company. In close relation to this concept, the company has manifested a mild presence in the tablet market. The tablet market is a growing filed that is high likely to present a double-digit growth in the next few years (Wildstrom, 2012). Most technology companies have established their businesses in the tablet market thereby attracting huge profit growth and income. Although the company launched its tablet model, it has failed in offering an attractive item for consumers. In turn, the company has experienced significant losses as it fails to compete with the likes of Apple and Samsung companies.
Apart from considerable bureaucracy, the company manifests a detrimental dependency on certain supply chains. The company relies on sole sources for short life cycle products, LaserJet supplies, and laser printer engines. The company uses Intel as the single provider of processors and the Microsoft Company as the sole source of software products. Certain hardware components are limited in supply and present volatile prices.
Opportunties
In order to ensure its future survival, there are numerous opportunities that the company can exploit. To begin with, the company can enhance its enterprise solutions and services’ division. The HP Company provides notable services, such as cloud computing, infrastructure and security. Enterprise solutions involve activities such as storage, networking, and servers. These are the most profitable units that the company can grow towards higher profit margins and better growth opportunities.
In the increased demand for efficiency and convenient services, the market presents a surging demand for cloud-based services. In cloud-based services, a variety of applications and systems link to accord a unified direction. From the year 2011 to 2020, market analysts project that the cloud computing market is high likely to grow by an average annual figure of 22 percent. By 2020, the market analysts project that the market will reach a $240 billion value (Blauvelt, 2012). HP is providing cloud-computing related services that may see it harnessing sales from the burgeoning market.
As research and development becomes expensive and unproductive, there needs to be a strategic shift. The immediate solution is to purchase patents for other companies in the given market. HP has considerable amounts of funds that it can utilize towards acquiring and holding the required technology patents. With a robust patent portfolio, HP can favorably compete with its rival companies such as Apple.
Threats
There are notable threats that the company faces. This regards future possibilities that may cut down on future profits. To begin with, the technology industry relies on trends that may face out HP’s brand and reputation in the market. The most disadvantageous element in brands regards the idea that they, sometimes, do not depend on corresponding quality. There are significant profit margins in the market of enterprise software solutions. This suggests that incumbent firms, such as IBM and Oracle, might retaliate and usurp the profits that HP is thriving in.
Moreover, there is the threat of slowing sales in personal computers. In the near future, markets might attain saturation. This is coupled with competition from companies such as Acers, Dell, Apple, Samsung, and Lenovo. These companies have enhanced their services in terms of quality, price, distribution channels, range of products, and brand. Moreover, customer needs are shifting whereby they are keener in purchasing smartphones and tablets rather than laptops. This suggests that it will become difficult to compete in the PCs market and harness reasonable profits.
More essentially, there is the threat of rapid technological change that the industry is facing. Technology products manifest uncertainty in their continuity as trends. In this sense, perennial innovation and inventions release products that instantly capture their markets. For instance, the rise of social networking sites is a trend that has dominated the current market. In these trends, it necessitates that companies align their products and services towards the same (Newman, 2001). Technology companies face the pressure of releasing new products. Companies that cannot keep with this pace falls by as other entities thrive in trends. This is a worrying scenario for the HP Company since it lags behind in technological advancement, quality, and price.
Possible strategies
It is discernible that the company faces these challenges since it is a large company. As a company expands, there is unlimited capacity in opening up new operations and increasing its product portfolio. When the revenues expand, they reach a peak whereby a shrewd management has to take the company through technological uncertainties. As a 21st century company, HP should engage in support services that maintain the company’s revenues at profitable levels. For instance, the company can engage in sustainable supply chain management as a strategy of minimizing on costs and providing green products (Withey & Lancaster, 2013). In addition, the company should concentrate on customer service in terms of customized products. Besides, it is crucial to engage market analysts who project on trends. Anticipation of given trends helps the company prepare itself towards producing market-relevant products. Most essentially, the company ought to expand its enterprise solutions and services’ businesses.
References
Blauvelt, J. (April 15, 2012). Griffin consulting group. Hewlett-Packard. HYPERLINK “http://economics-files.pomona.edu/jlikens/SeniorSeminars/Likens2012/reports/HP.pdf”http://economics-files.pomona.edu/jlikens/SeniorSeminars/Likens2012/reports/HP.pdf.
Dickie, R. (2006). Financial statement analysis and business valuation for the practical lawyer. New York, NY: American Bar Association.
DuBrin, A. (2011). Essentials of management. Mason, OH: Cengage Learning.
Egner, T. (2009). Canon – Strategy analysis: analysis of a diversified company. New York, NY: GRIN Verlag.
Newman, L. (2001). Proposal guide for business development professionals. Farmington, UT: Shipley Associates.
Oliver, G. (2012). Foundations of the assumed business operations and strategy body of knowledge (BOSBOK): an outline of shareable knowledge. New York, NY: Darlington Press.
Ulph, C. (2011). Marketing strategies used by Intel to create a sustainable market position. New York, NY: GRIN Verlag.
Wildstrom, S. (October 3rd, 2012). HP’s Future: Apple, IBM–or Dell? Tech Opinions. Retrieved from HYPERLINK “http://techpinions.com/hps-future-apple-ibm-or-dell/10790″http://techpinions.com/hps-future-apple-ibm-or-dell/10790.
Withey, F., & Lancaster, G. (2013). CIM coursebook marketing fundamentals 07/08. New York, NY: Routledge.
Zell, D. (2007). Changing by design: organizational innovation at Hewlett-Packard. New York, NY: Cornell University Press.