HP and Dell

Satisfactory Essays
Hewlett-Packard (HP) is a technology leader in United States and the world. It was founded in 1939 in Paolo Alto, CA by two Stanford graduates Bill Hewlett and Dave Packard. Forty five years later another student Michael Dell in Austin, TX found another company that will essentially become HP’s biggest competitor. These two companies are pushing each other in developing new products and services to its extremes in attempt to capture bigger market share and increase profit. Strong competition is the biggest reason for tiny profit margins in this industry. Both companies use strategy that they think is the right for the given moment. We will analyze strategic moves that both companies made recently or are still making. Overview of HP’s strategy For a few years HP tried to make strategic changes that will reposition the company on the market and give driving force to keep distance between them and competitors. Until 2011 when Meg Whitman took CEO role, HP struggled with problems such as too many employees, spiraling debt, poorly executed and expensive acquisitions and declines in every one of its lines of business. Two big acquisitions (EDS in 2008 and Autonomy in 2011) instead to have positive impact on the company, were painful when the HP had to write down combined value of 17 billion US dollars. According to Meg Whitman, HP’s CEO, company is focusing onto the major trends in the industry, IT investment—cloud computing, information optimization and data security. Gross Domestic Product is currently growing faster than HP’s revenue, however CEO expects that will change by 2016. So far company solved some problems such as repaying debt. Currently all divisions excluding finance has debt of zero. HP is in process of reducing n... ... middle of paper ... ... thing while being in the right time on the right place. Everything else is the history. Many stories were told about Dell. Dell was most famous for its customized products which they sold directly to customers. This strategy worked for some period, however to capture bigger market share Dell had to return to the retailers. Michael Dell is one of the biggest asset Dell has. His enthusiasm and hard work build a multibillion dollar company. He has promising outlook for the IT market and always make strategic decisions. Therefore Dell at the beginning made strategic decision to sell in the stores to capture market share, then they decided to sell directly to customers to avoid retailer margins, however, at the end they returned to retailers to capture market share again. Although these strategies contrasted each other, they were right strategies for the right time.
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