Input diagnosis and classification methods

Input Diagnosis

According to the 2007 Annual Report for Palm, the corporate strategy of the company was identified as "develop market-defining products that deliver a great user experience"

With the acquisition of Palm by HP in April 2010, one can safely say that this will remain the corporate strategy for Palm even within HP, with the important mention that, after the acquisition, more important resources can be allocated towards fulfilling this objective. The aim of this paper is to use the Nadler-Tushman Congruence Model in order to analyze the overall congruence between the different inputs and the corporate strategy.

As mentioned, the strategy that Palm has declared before its purchase by Hewlett Packard was a proactive one, where the products that the company developed would create new and better user experiences. Focusing on the clients' response, the main strategic objective that Palm had promoted was one that would maximize consumer satisfaction.

With its purchase by HP, this strategy has not changed, but it has been amplified, in order to best reflect the new resources that HP has brought in and that could now be allocated towards fulfilling the amplified objective. Within HP, the company strategy will also aim to increase market share and to acquire as much of the growing, $100 billion mobile market. At the moment of acquisition, the HP brand had about 1.5% of all smartphones, with no growth

. This would be an area that HP would aim to improve in the short and medium term.

Following this brief description, one may conclude that Palm's strategy within HP will be unchanged from what had been previously proposed and this strategy can be identified as a differentiation strategy. According to this strategic approach, Palm aims to develop new products that can provide added-value to the consumer and a better experience than other products in the smartphones and mobile industry can. This, however, will also be complemented by the presence of Palm within HP and will have a cost leadership component to it as well: with its presence in a company the size and power of HP, Palm will be able to benefit from economies of scale and keep its costs down, to the degree to which these economies can be reinvested in research and development and can help the primary corporate strategy, product differentiation on the market.

Key organizational inputs

1. Environmental. The most important environmental input to be taken into consideration are the clients. As in any market that is based on innovation, creativity and technology, the client has a very important say in what products are to be developed, what can be sold on the market and what the general trend of the industry will be. From all these perspectives, one can assume that the mobile and smartphones market is a client-driven one. With Palm, this is especially true, with a notable impact of the business category of clients, those who have initially used the Palm as an organizational tool and who are still to be considered when creating new Palm models, given their business and organizational needs.

The second important environmental input that Palm will need to seriously factor into any strategic decision is the other competitors. With the likes of iPhone, Blackberry or Motorola, as well as some of the newcomers in the industry, such as Google's Nexus, Palm will need to calibrate its approach so as to consider strategic moves by the competitors. One such example would be, for example, the timing of new launches for Palm. Is it a good idea to launch a new product the same day or within the same timeframe that Apple would be launching a new version of the iPhone? Probably not. Palm will also need to consider the new developments that competitors' products are bringing into the market and analyze what response it needs to give out.

The third important environmental input that Palm will need to analyze and consider is the technological elements. Other than being a consumer-driven industry, this is also a technology-driven market and achieving the declared corporate strategy depends a significant deal on whether Palm can deliver new technological solutions for its users, solutions that will allow the clients to benefit more efficiently from the products that Palm offers.

Other important environmental inputs that can be considered are the socioeconomic factors, notably the way that the global economy is likely to evolve in the future. An economy that will continue its recession is likely, at an aggregate level, to diminish individual incomes as well, which will leave a lesser portion of one's total income be allocated for investment in technologies such as Palm smartphones or other mobile devices.

2. Resources. With the acquisition of Palm by HP, the resources category of the key organizational inputs has become significantly more solid than when Palm was an independent company. With the acquisition, one can assume that most of the human resource that has helped develop the Palm solutions and technology will be absorbed within HP. However, to this, one will now add the new resources that HP will be able to invest into Palm, including in developing new technologies that will help target the corporate strategy. According to different sources, before Palm's acquisition, HP benefited from $13.5 billion in cash, this in a time of economic difficulties in which credit has become more expensive. One can assume that a portion of those funds will be spent on integrating Palm into HP.

Another resource that should also be considered is the HP technology. Joint Palm and HP teams can analyze the degree to which some of the HP technology could be integrated with Palm, which would lead to new economies of scale and increased performances with the clients.