Hewlett Packard: company history and operations

HP Value Chain Analysis

To a casual observer, the importance of informational technology to a computer company like Hewlett Packard may seem obvious. After all, the company is based upon the production and dissemination of informational technology for its very lifeblood. The predominance of the World Wide Web in modern culture has caused HP to explode, through its purveyance of digital camera, as well as the hardware of printers, desktops, and laptop computers. It might seem more difficult to delineate how, for example, the increased use of new forms of informational technology have benefited non-technical companies in all the nine areas of value chain analysis such as transforming the products sold, the direction and pace of change in the industry, changing the nature of the playing field of competition, the changing nature of the industry structure overall, creating a competitive advantage for the industry in the field, lowering the costs of production, enhancing company name and product differentiation, changing the company's competitive scope, and spawning new businesses and business opportunities for the company.

However, in addition to merely making it easier, through disseminating technology, for other companies to benefit from the enhancement of their own value chain, HP's own managerial business operations have benefited from the company's technical innovations. For instance, the direction of the company has been skyrocketed into the future at an almost alarming pace, because of its deployment of the advertising potential of World Wide Web. The Internet allows companies such as HP to eliminate middle aspects of the value chain, and to reach the customer directly with specific and targeted advertising. For instance, type in HP into one's AOL's Internet browser, and immediately one is taken to HP shopping. A consumer is greeted with the image a smiling girl, happy and delighted with her new HP digital camera. One need not go to a store and be confronted with a sea of potentially confusing images of the new technology -- the camera, attractively displayed and specifically deployed by the company is only a point and a click away.

Informational technology's deployment of the web has thus fundamentally changed the nature of competition between technical companies like HP -- it is not simply a question of what one uses at work, but now that people have more flexibility and use more technology in their daily lives, companies like HP can and must project an image as well as merely provide a service. The changing, more diverse industry structure within the computer industry, partly spurred on in recent years from new encroachments from non-proprietary software companies, unlike Microsoft, which HP has allied itself with has created additional problems and forced it to explore new solutions.

HP has been able to distinguish itself, despite the increasingly pluralistic industry structure, to stress its ability to provide helpful advice to home customers and small and medium size businesses, thus enhancing its differentiation in the industry, and creating a friendly yet professional image for itself in the minds of consumers. This makes consumers specifically look for HP products, rather than relying on middleperson's advice, and other aspects of the value chain that increases cost and necessitates more advertising dollars to be spent on the part of the company.