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Report On Hewlett Packard Hp Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 5393 words Published: 1st Jan 2015

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Hewlett-Packard (HP) is founded by Bill Hewlett and David Packard on 1st January, 1939 in Palo Alto, California in USA. Its headquarters is in California in USA. As Hewlett-Packard (HP) is multinational American hardware and Software Company, it provides softwares, technologies, solutions and services to customer, small and medium sized business. Hewlett-Packard (HP) is world leading PC manufacturing company that is specialized in manufacturing data storage devices, computing and networking hardware’s and in designing softwares.

As HP major productlines are Personal computer (PC) devices, industry servers, diverse range of printers and other imaging products. HP markets its product to household users, SMEs through online services and through vendors.

As HP history from 1940s to 2010, HP is mergering with different organization and bought other organization and increasing their technology and workforce.

As in this report we do different analysis such as PORTERs five forces model, PEST analysis, SWOT analysis and give recommendation, suggestion, and conclusion about all organization.



Hewlett-Packard (HP) is founded by Bill Hewlett and David Packard on 1st January, 1939 in Palo Alto, California in USA. Its headquarters is in California in USA. As Hewlett-Packard (HP) is multinational American hardware and Software Company, it provides softwares, technologies, solutions and services to customer, small and medium sized business. Hewlett-Packard (HP) is world leading PC manufacturing company that is specialized in manufacturing data storage devices, computing and networking hardware’s and in designing softwares.

HP major product lines are Personal computer (PC) devices, industry servers, diverse range of printers and other imaging products. HP markets its product to household users, SMEs through online services and through vendors.


As Hewlett-Packard (HP) was established in Packard’s garage with an initial investment of US$538 on 1ST January 1939, and HP was incorporated on 18th August, 1947 and went to public on 6th November, 1952.

As both electrical engineers worked on many projects but their first financially successful product was a precision audio oscillator model (PAOM) (HP200A), whose initial cost is just $54 while their competitor were selling such product at $200.

As from 1940 to 1990, company is concentrated on making electronic test equipment like signal generator, voltmeter, oscillator, thermometer, frequency modulator, time standards, wave analyzer and many more electronic types of equipment. As a distinguishing feature of HP products are that they are more accurate, sensitive and precise than other comparable equipments.

In 1960s Hewlett-Packard (HP) recognize itself as a founder of Silicon Valley as they developed semi-conductor devices primarily for internal use. Hewlett-Packard (HP) partnered with Sony and Yokogama Electric companies to produce high quality products in Japan.

As a joint venture is formed with Yokogama named as (Yokogama- Hewlett-Packard, HP) in 1963 to markets HP products in Japan. Hewlett-Packard (HP) spun off a small company called Dymec (Dynac), to specialize in digital equipments and experimented in digital equipments corporation to forms mini computers with their instruments. Hewlett-Packard (HP) entered in computer market in 1966 with HP 2100 / HP 1000 series of minicomputer. These used accumulator based designed that is similar to Intel X86 that were using today also.

In 1970s, Hewlett-Packard (HP) introduced HP 2640 that is formed based interface and also introduced Screen labeled Function Keys that were used now-a-days in gas pumps and Banks ATMs. When HP2640 is combined with HP 210021MXT series for display graphics formed first presentation program, BRUNO, that program later draws on HP3000.

As Hewlett-Packard (HP) was identified by wired magazines as world’s first mass produced personal computers, introduces in 1968, Hewlett-Packard 9100A series computer. But they called it a desktop calculator because at that time manufacturing computers without IC(integrated circuit ) is like a nonsense concept so that’s whys they called them a desktop calculator.

As Hewlett-Packard (HP) company earned global respect for a variety of innovate products like, in 1972, they introduced a first handheld Scientific Electronic Calculator called (HP-35), in 1974, a first handheld programmer (HP-65), 1979 a first alphanumeric, programmable and expandable (HP-41C) and first symbolic and graphic calculator (HP-28C). The 98X5 series of technical desktop computers started in 1975 with a cheaper 80 series and these machines were using a basic programming language. Hewlett-Packard (HP) computers are much more similar than in capabilities with IBM, but limitation of technological advancement forces them to high prices of HP PCs.

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In 1980s, Hewlett-Packard (HP) introduces for its desktop computers a Laser and Inkjet printers. With Hewlett-Packard (HP) scanners product line HP developed a multi-function products where a single unit is a complete printer/ copier / scanner/ and a fax machine. The print function of laser printer depends on Cannons components i-e a Xerox developed technology. On March 3rd , 1986, Hewlett-Packard (HP) registered HP.COM a domain name and become the ninth internet domain to be registered.

In 1990s, Hewlett-Packard (HP) expanded its product line of computers to universities, researchers, business users and household consumers. Also HP bought Apollo computer in 1989 and Convex Computers in 1995. In 1999, all of the business is spun off from the HP to form a Agilent which is the largest IPOs (Initial public offering) in Silicon Valley. This spin off created a $8 billion for the company and created 30000 jobs that were manufacturing semiconductors, optical networking devices, electronic test equipments and scientific instruments.

On September, 3rd, 2001 an announcement of Hewlett-Packard (HP) is that HP is going to merge with Compaq, and after that HP is officially merge with Compaq on May, 2002. This merges starts from Bill Hewlett son’s objection on its merger. As before this merger, Compaq already bought Tandems computer and Digital Equipment Corporation, and Only Hp is the major player in the market. So after this merger of HP a new symbolic name called HPQ (Hewlett-Packard and Compaq) is established. In 2004, HP released a DV1000 series and starts his campaign, The Computer is Personal Again” to highlight the fact that PC is a personal product. In May, 13, 2008, HP announced that they purchased Electronic Data System (EDS) and on August, 26, 2008, a public announcement that EDS is a Re-branded as EDS on HP Company and as of September, 23, 2009 EDS called as Hp enterprise services. On November, 11th, 2009, Hewlett-Packard (HP) is acquiring 3.COM for $2.7 billion in cash and on April, 12th 2010, Hewlett-Packard (HP) complete acquisition at an enterprise value of $2.7 billion.

On April,28th ,2010, Hewlett-Packard (HP) announced to acquire Palming , that is a smart phone manufacturing company for $1.2 billion and that deal was completed on July, 1st 2010, so that would phase out the Compaq brand. As Palm adds its current iPod mobile to HP product line to increase their sales when HP own sales is not good. Also Palm gives HP a well mobile operating platform called WebOS, and the WebOS build HPs own ecosystem, so that HP launched its first tablet called HP Touchpad on 1st, July, 2011, and bring WebOS to tablet devices.

On 18th ,August ,2011, Hewlett-Packard (HP) announce that it will exit from the Smartphone and tablet computer business and focused on high-margin on manufacturing and providing solutions and software and stress on customer in firms, commercial and government market. Hewlett-Packard (HP) also focusing on making seven segments to an entire division i-e the Personal Systems Group (PSG), Services, the Imaging and Printing Group (IPG), Enterprise Servers, Storage and Networking (ESSN), HP Software, HP Financial Services (HPFS) and Corporate Investments.

On 31st, October, 2011, Hewlett-Packard (HP) owned an 99% equity interest in Autonomy Corporation plc. And in December 2011, the Company acquired Hefley Software GmbH

On 23rd, May, 2012, Hewlett-Packard (HP) announced plans to lay off 30,000 employees, after a decline of 31% profit in the second quarter of 2012 that is because of growing popularity of smart phones, tablets, and other mobile devices, that slowed the sale of PC.

The seven segments are describing the HP divisions:


1.3.1 Personal Systems Group

PSG provides commercial personal computers (PCs), consumer PCs, workstations, calculators and other related accessories, software and services for the commercial and consumer markets. The Company groups commercial notebooks, commercial desktops and workstations into commercial clients and consumer notebooks and consumer desktops into consumer clients. Commercial PCs include the HP Pro-Book and the HP Elite Book lines of notebooks and the Compaq Pro, Compaq Elite, HP Pro and HP Elite lines of business desktops, as well as the Touch Smart and Omni PCs, HP Mini-Note PCs, retail POS systems, HP Thin Clients and HP Slate Tablet PCs. Consumer PCs include the HP and Compaq series of multi-media consumer notebooks, desktops and mini notebooks, including the Touch Smart line of touch-enabled all-in-one notebooks and desktops. PSG provides workstations that run on both Windows and Linux-based operating systems.

1.3.2 Services

HP provides consulting, outsourcing and technology services across infrastructure, applications and business process domains. Services delivers to its clients by leveraging investments in consulting and support professionals, infrastructure technology, applications, standardized methodologies, and global supply and delivery. Services are divided into four main business units: infrastructure technology outsourcing, technology services, applications services and business process outsourcing. Infrastructure Technology Outsourcing services encompass the data center and the workplace (desktop); network and communications; and security, compliance and business continuity. It also offers a set of managed services. Technology Services provides support and consulting services, as well as warranty support across HP’s product lines. HP’s technology services offerings are available in the form of service contracts, pre-packaged offerings (HP Care Pack services) or on an individual basis. The Company’s Applications Services encompass application development, testing, modernization, system integration, maintenance and management. Applications Services also provides technology consulting and systems integration solutions and services that use cloud computing, hybrid delivery, enterprise mobility, information management and real-time analytics. Business Process Outsourcing services includes both industry-specific and cross-industry solutions. Its cross-industry solutions include a range of enterprise-shared services, customer relationship management services, financial process management services and administrative services.

1.3.3 Imaging and Printing Group

IPG provides consumer and commercial printer hardware, supplies, media and scanning devices. IPG is also focused on imaging solutions in the commercial markets. These solutions range from managed print services to capturing high-value pages in areas, such as industrial applications, outdoor signage, and the graphic arts business. Inkjet and Web Solutions delivers HP’s consumer and SMB inkjet solutions (hardware, supplies, media, web-connected hardware and services) and develops HP’s retail publishing and Web businesses. It includes single function and all-in-one inkjet printers targeted toward consumers and SMBs, as well as retail publishing solutions, Snappish and ePrint Center. LaserJet and Enterprise Solutions delivers products, services and solutions to the medium-sized business and enterprise segments, including LaserJet printers and supplies, multi-function devices, scanners, Web-connected hardware and services and enterprise software solutions, such as Extreme Software and Web Jetadmin. Managed Enterprise Solutions provides managed print services products and solutions delivered to enterprise customers partnering with third-party software providers to offer workflow solutions in the enterprise environment. Graphics Solutions provides large format printing (Design jet and Scitex), large format supplies, Web Press supplies, Indigo printing, specialty printing systems and inkjet high-speed production solutions. Graphic Solutions targets print service providers, architects, engineers, designers and industrial solution providers. Its printer supplies offerings include LaserJet toner and inkjet printer cartridge , graphic solutions ink products and other printing-related media.

1.3.4 Enterprise Servers, Storage and Networking

ESSN provides server, storage and networking products in a number of categories. The Company’s Converged Infrastructure portfolio of servers, storage and networking combined with HP Software’s Cloud Service Automation software suite creates HP’s Cloud System. This integrated solution enables enterprise and service provider clients to deliver infrastructure, platform and software as a service in a private, public or hybrid cloud environment. Industry Standard Servers offers primarily entry-level and mid-range ProLiant servers, which run primarily Windows, Linux and Novell operating systems and Intel Corporation (Intel) and Advanced Micro Devices (AMD) processors. The business spans a range of product lines that include pedestal-tower servers, density-optimized rack servers and HP’s Blade System family of server blades.

The Company’s Business Critical Systems delivers Converged Infrastructure with a portfolio of HP Integrity servers based on the Intel Itanium processor that run the HP-UX and OpenVMS operating systems, as well as HP Integrity Nonstop solutions. Business Critical Systems also offers HP’s scale-up x86 ProLiant servers for scalability of systems. In addition, HP continues to support the HP9000 servers and HP Alpha Servers by offering customers. The Company’s storage offerings include storage platforms for high-end, mid-range and small business environments. Its flagship product is the HP 3PAR Utility Storage Platform, which is designed for virtualization, cloud and IT-as-a-service. The Storage business has a range of products, including storage area networks, network attached storage, storage management software and virtualization technologies, Store Once data reduplication solutions, tape drives and tape libraries. Its switch, router, wireless local area network (LAN) and Tipping Point network security products deliver solutions for the data center, campus and branch networks. Its networking solutions are based on HP’s Flex Network architecture.

HP Software

HP Software provides enterprise IT management software, information management solutions and security intelligence/risk management solutions. Solutions are delivered in the form of software licenses or as software-as-a-service. HP Software solutions enables IT organizations to manage infrastructure, operations, application life cycles, application quality and security, IT services, business processes, and structured and unstructured data.

HP Financial Services

HPFS supports HP’s global product and service solutions, providing a range of financial life cycle management services. HPFS enables its worldwide customers to acquire IT solutions, including hardware, software and service.The Company offers leasing, financing, utility programs and asset recovery services, as well as financial asset management services for global and enterprise customers. HPFS also provides an array of specialized financial services to SMBs and educational and Governmental entities.

Corporate Investments

Corporate Investments includes business intelligence solutions, HP Labs, WebOS software and certain business incubation projects. Business intelligence solutions enable businesses connect and share data across the enterprise and apply analytics. This segment also derives revenue from licensing specific HP technology to third parties.

The Company competes with Dell, Inc., Acer Inc., ASUSTeK Computer Inc., Apple Inc., Lenovo Group Limited, Toshiba Corporation, IBM Global Services, Computer Sciences Corporation, Accenture Ltd., Fujitsu Limited, Wipro Limited, Infosys Technologies Limited, Tata Consultancy Services Ltd, SAP, AG, Oracle Corporation, Microsoft Corporation, Canon U.S.A., Inc., Lexmark International, Inc., Xerox Corporation, Seiko Epson Corporation, Samsung Electronics Co., Ltd., Brother Industries, Ltd., International Business Machines Corporation, EMC Corporation, Net App, Inc., CA, Inc., BMC Software, Inc., Cisco, McAfee and IBM Global Financing.

1.4 HP’s Vision statement:

“At HP, we believe diversity is a key driver of our success. Putting all our differences to work across the world is a continuous journey fuelled by personal leadership from everyone in our company. Our aspiration is that the behaviors and actions that support diversity and inclusion will come from the conviction of every HP employee – making diversity and inclusion a conscious part of how we run our business throughout the world. Diversity and inclusion are woven into the fabric of our company”

1.5 HP Mission:

Customer loyalty: Earn respect and loyalty by providing highest quality and value

Profit: Attain sufficient profit for finance growth, value for shareholders’ investment and corporate objectives.

Growth: To seize opportunities to growth and achieve, build on strengths and competencies.

Market leadership: To lead in the marketplace by developing and delivering useful and innovative products, services and solutions

Commitment to employees: To demonstrate our commitment to employees by promoting and rewarding based on performance and by creating a work environment that reflects our values.

Leadership capability: To develop leaders at all levels who achieve business results, exemplify our values and lead us to grow and win.

Global citizenship: To fulfill our responsibility to society by being an economic, intellectual and social asset to each country and community where we do business.

HP’s mission statement recognizes that its needs to earn the respect and loyalty of its customers; to be a market leader; to commit itself to the welfare of its employees and engage in corporate social responsibility

1.6 Objective Evaluation:

HP’s objectives are geared towards achieving its mission. This it does by providing its customers with high value and quality products; developing and delivering useful and innovative products, services and solutions; promoting and rewarding employees based on their performance and by creating a work environment that reflects its values and by being an economic, intellectual and social asset to each country and community where it does business.

1.7 Company Culture:

HP is moving fast that’s why we have to move even faster. We’re driving the world’s IT revolution armed with passion, curiosity and a global team of visionaries who never stops at impossible.

Our team is made up of optimists who know technology can empower the world. We’re filled with talented achievers who understand what our customers need even before they do. We attract the type of person who believes “no” is a challenge-not an answer. 

It isn’t a coincidence that HP is a magnet for this kind of ingenuity. Our people are drawn from all over the world by our infinite opportunities and career development. The best minds in the business convene here, energized by global collaboration and the chance to propel their career past ordinary to extraordinary.


Michael porters a Ph.D scholar in business economics from Harwad Business School, designed Five forces model in 1979, for industry analysis and business development strategy and analyze five forces such as; threat of substitute products, the threat of established rivals, and the threat of new entrants, the bargaining power of suppliers and the bargaining power of customers .Porter five forces analysis determines the company competitiveness and overall profitability of the industry. Porter five forces model was described for Hewlett-Packard (HP)

2.1 Threat of entry of new competitors:

The profitable markets will attract new firms because of high return, and will decrease profitibilty for whole industry. The attractive thing for the entry barriers is that entry barriers are high and exit are low so few firms can enter while maximium can leave it.

2.1.1 Barriers to Entry: (moderate)

There is moderate level for threat of new entrants in HP industry because of economies of scale achieved byexisting players which becomes their competitive advantage. The second barrier to enter in this industry is that new player need more capital to enter in this market. The third barrier for new entrant is that in such industry their is constant need for advancement of technology is required to grab the market. The forth barrier for new companies is that as standardization of computer components, their is a moderate switching cost to customer as they easily change their PCs.

2.2. The intensity of competitive rivalry:

In old economic model concept,a competetion can made a firms profit to zero, but the competition id not as perfect and firms are not unsophisticated passive price takers. So firms try for competitive advantage over its competitor and focus on competition intensity.

2.2.1 Barriers to Entry: (high)

In setup of new manufacuring units can increased fixed cost which makes difficulty for existing player to exit from the industry

Loe switching cost can increase the rivalry because when customer can easily switch from one product to other their is more difficulty for customer to retain the customer.

A high level of rivalry among firms should be associated with low level of product differentiation such that brand idenification, same level of product satisfication that create low market position of the firms.

A high exit barriers can assure that a firm will remain in the industry even a firm is not earning any profit.

Their is constant changes in product and prices that makes a strong competition between same category product such as the two cmpanies hold top market share in computers hardware industry.


Strong R&D and marketing

Gave rise to PC industry with Microsoft Windows OS

IBM Global Services – strong customer assistance


Direct business model

Low inventory costs, introduce new technology quick

Close customer relationships built loyalty

Ranked 1 in global PC market share in 2001.

2.3 The threat of substitute products/ services:

As the threat of subsititute in HP Company is moderate because switching cost for consumer is very high and frequent innovation and continuos advanmcement in technology also cause a threat for the company.

Relative price performance of substitute creates a threat for HP.

Buyer switching costs is high because low prices of HP laptops indicate that its target to middle class and upper middle class people as it is difficult for them to move from one product to other.

As number of substitute products available in the market creates a moderate threat between HP and other hardware industry.

As Quality depreciation, HP product gain more market share than any other computer hardware industry.

As new technology and advancement shakes industry and is a threat for them.

2.4 The bargaining power of customers (buyers):

The bargaining power of buyer is also important factor as a buyer is sensitive to prices and product design, so it easily makes a firm under pressure and completes his demand.

Buyer switching costs is relative to firm switching costs as the standardization of computer components it become easy for buyer to change their laptops.

As there is less number of supplier which are providing HP products to customer, so the bargaining power of buyer is moderate. So that HP customer depend upon existing channels of distribution

The reason behind few suppliers of HP products is that they are supplying products for high cost.

As HP a regularly advertized report on quarterly basis to give complete information to its buyer and dealers.

Buyers are more prices sensitive, so that HP are providing product with customer affordability.

As HP provides its customer a differential advantage (uniqueness) of the products.

2.5 The bargaining power of suppliers: (High)

The bargaining power of supplier is important input factor in every industry such as providing raw material, labor, and expertise services. As supplier refuses to work with them and charges more on providing unique services. As we know that supplier are charging more on providing services because there are very few supplier on which firm trust on them and provide a good quality raw material.

As supplier are bargaining more from the firms because customers are highly fragmented throughout the world

As there are very few large supplier which are trustable, recognizable, and provide a good quality raw material such as Foxconn, Intel, and Hitachi. Degree of differentiation of inputs

Firms bargain with those entire supplier who has a strong distribution channel.

Supplier concentration to firm concentration ratio

Supplier competition – ability to forward vertically integrate and cut out the buyer

As also there is difficulty for the supplier to reproduce a specialized technology which becomes their competitive advantage.



PEST or PESTEL analysis that stands for Political, Economic, Social, Technological, Ethic and legal analysis which shows the external environment that describes the macro-environmental factor used in environmental scanning component of strategic management. When we are doing market research, PESTEL analysis gives us an overview of all macro-environmental factors that gives an understanding of market growth or decline, business position, and potential for business.

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3.1 Political:

Political factors are that at what degree government makes intervention in an economy such as labor laws, environmental laws, polical stability, tax policy, trade tariffs, and trade restriction. The international IT and electronics industries have been characterized with intensive competition. Electronics and IT companies are constantly reviewing their achievements as well as the competitors’ in order to come up with better business strategies in an effort to best all other existing industry rivals. With the merger and acquisition strategy between HP and Compaq, members of the IT and electronics industry all over the world were threatened with the intensified effort that could result from the integration. Others were surprised because mergers and acquisition strategies may also result to negative implications on the part of the merging companies particularly when differences in the context of strategies, culture and goals fail to be fully integrated.

3.2 Economic:

As the economic factor include economic growth, inflation rates, interest rates, and exchange rates. As these factors effects business such as interest rates that affects cost of capital of the firm and that how firms expands or grows , exchange rates affect the costs of exporting goods and prices of imported goods in economy. For HP and Compaq merger, such merger will increase the competitiveness of these independent companies to compete with highly aggressive competitors. As both HP and Compaq merger means to add value to their existing products and services to increase the level of satisfaction among their clients and customers. When satisfaction levels were met among clients and customers, HP and Compaq expect better economic competitiveness within the international IT and electronics industry. After this when HP acquire Palm.inc shows a revolution in Smartphone manufacturing industry and gives economic development in the country.

3.3 Social:

The Social factor has emphasis on health, cultural aspect, growth rate, age distribution, career attitude and focus on safety. The change in social trends can have a direct impact on the demand for a firm’s products and the availability and willingness of individuals to work, such as in Uk for old age employees, firms gives more pensions and medical allowances, so that it cost more to firms.

As a merger between HP and Compaq will result more likely to better social activities as sponsor by both companies. As previously social and civic activities are independently supported by HP and Compaq now will be carried out in new perspective and will be beneficial for future.        

3.4 Technological:

Technological factors include technological aspects such as Research and Development activity, Automation, technology incentives and the rate of technological changes. Technological factor can minimize entry barriers, reduce minimum efficient production levels and influence outsourcing decisions. And furthermore, it can affect costs, quality, and lead to new creation. As new technologies innovate new products and processes such as MP3 players, new computer games, high definition TVs are all created new markets. As technological advancement can improve business such as online shopping, also reduce costs, and improve quality. So that these advancements benefits both consumer and organizations. As HP from its starts, try to improve its technologies that are why they are merging with different companies to get benefits from technology such as a merger with Compaq, buying Palm.inc, Electronic Data System (EDS), and Apollo Company. Also HP is going towards high R & D and at present the electronics products of HP is going towards revolution with support of Compaq.

Political factors

Government Stability

Taxation, employment and safety law

Social welfare policies

Foreign trade regulations

‘Green’ issues that affect the environment

Economic factors

Total GDP and GDP per head growth rates (trends)


Consumer expenditure and disposable income

Interest rates

Currency fluctuations and exchange rates

Investment, by the state, private enterprise and foreign companies

Business cycles


Socio-cultural factors

Shifts in values and culture

Change in lifestyle


Attitudes to work and leisure

‘Green’ environmental issues

Education and health

Social mobility

Technological factors

Government investment policy on research



SWOT Analysis is a useful tool by providing a framework for analysis of an HP company. As SWOT or TOWS stands for strength, weakness, opportunities, and threats and is a common tool for assessment in term of internal and external environment of an organization.

4.1. Strength:

The strength of HP is that it has strong market position such as according to NASDAQ in


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