HPTC Case Has HPTC Been a \"Success\"?

HPTC Case

Has HPTC been a "success"? In what terms has it been successful? For whom has it been successful?

HPTC was a success in regards to its performance relative to competitors. The case mentions that HPTC was responsible for developing leading edge supercomputers for the commercial and government markets. These developments were far superior to those of competitors who have outdated product offerings. In addition the alpha processor can run on multiple platforms including Linux and Windows.

HPTC was not successful in regards to economic benefit to the company. The group overall took nearly 4 years to make a profit. Furthermore, the markets most often dictate prices not the business itself. This created difficulty for the HPTC group to maintain margins it the midst of a competitive environment. In fact, the business that the HPTC operates in is characterized by low margins and low profitability. In many instances, the group must bid for large government contracts which further strain margins and profits. In fact, the case indicates that margins are reduced by nearly 70% with government contract bidding. Another problem not presented in the case but is worth mentioning is that of customer relations. The bidding process occurs nearly every year. As such, there is very little brand loyalty embedded within the bidding process. Governments and other large institutions base their decisions solely on price relative to performance. With little brand loyalty, the HTPC groups are missing the most profitable consumer segment-repeat customers. Repeat customers require less money to attract but are also the most profitable in regards to overall business. By not marketing to this segment, margins and sales will subsequently be realized through the bidding process, which is only marginally profitable.

2. What are the core capabilities of the HPTC group? What sets of capabilities do they have that provide competitive advantage? How did they develop these sets of capabilities?

The core capabilities of the HPTC group are their expertise, product know-how, financial stability, brand awareness and innovative culture. The HPTC group has expertise in the field of computer products and development. They have experience manufacturing high quality and consumer driven products. The HPTC is very skilled at listening to consumer demands and responding appropriately to those demands. The alpha chip, for instance was designed with the consumer in mind. As such, the chip is ubiquitous as it can operate on both Linux and Windows software. Furthermore, the HPTC group has acquired expertise and product know-how through its developments of computer products. This product expertise will allow the company to produce products more efficiently as older products become obsolete. These efficiencies will allow the company to maintain margins as it can produce goods cheaply. Brand awareness is an important competitive advantage for the HPTC group. Brand awareness is essential as consumers can resonate with your product offerings and the value it provides. As consumers are more familiar with a particular product, and are satisfied with its value proposition, the consumer is then willing to purchase more. This in term reduces the expenditures needed to attract new clients with the savings transferred directly to the bottom line. Brand awareness provides a means of building a loyal client base that will provide future profits for the business. Finally, an innovative culture is a significant advantage for the technology sector in general. Technology is an industry characterized by rapid innovation and changing consumer sentiments. Successful companies must be able to align their product offerings with those of the consumers to be successful. As such, innovation is needed to address these changing sentiments. The HPTC group does an excellent job of providing innovative solutions to changing consumer sentiments. All of these capabilities were developed through time and research. The alpha chip was developed through consumer research. The bids that the HPTC group won were fostered by consumer research as well.