Hewlett-Packard Business Model, Strategy & Competitive Forces
This paper examines Hewlett-Packard's business model and competitive positioning in the global IT industry. It reviews HP's product and services portfolio, key industry relationships, and the competitive forces shaping the company's environment using Porter's Five Forces framework. The paper then evaluates cost leadership and diversification strategies, including outsourcing to Central and Eastern Europe, and assesses HP's sustainable competitive advantages — notably its broad product portfolio and financial stability. Finally, it proposes a forward-looking evolution of the business model toward software solutions, enterprise IT management, and expanded online presence.
- Business Model Overview: HP's portfolio, revenues, and growth drivers
- Industry Relationships and Competition: Key partnerships, auxiliary markets, and competitive pressures
- Competitive Forces and Challenges: Porter's Five Forces applied to HP's environment
- Competitive Strategies: Cost leadership and diversification in response to economic crisis
- Sustainable Competitive Advantages: Portfolio breadth and financial stability as long-term strengths
- Business Model Evolution: Online expansion and enterprise ERP solutions as future directions
- Best IT-Supported Strategic Proposal: Integrated recommendation combining outsourcing and diversification
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What makes this paper effective
- Applies a recognized analytical framework (Porter's Five Forces) directly to a real company, grounding abstract theory in concrete business context.
- Maintains a logical progression from description to analysis to strategic recommendation, giving the paper a clear argumentative arc.
- Connects short-term challenges (the economic crisis) to long-term strategic directions (software diversification, online expansion), showing multi-horizon thinking.
Key academic technique demonstrated
The paper demonstrates applied strategic analysis: it introduces a theoretical framework (Porter's Five Forces and competitive strategy options), systematically applies each component to HP's situation, and synthesizes findings into an integrated strategic recommendation. This approach — describe, analyze, recommend — is the core pattern of business case writing at the undergraduate level.
Structure breakdown
The paper is organized into seven numbered sections. The first two sections establish context (HP's portfolio and industry relationships). The third section applies Porter's Five Forces. Sections four and five address competitive strategies and sustainable advantages respectively. The final two sections turn forward-looking, proposing how HP's business model should evolve and concluding with a combined IT-supported strategic proposal. Each section builds logically on the previous one.
Business Model Overview
Hewlett-Packard is considered by many to be the largest IT company in the world. Its impressive revenues surpassed the $100 billion mark in 2007, when the company reported revenues of $104.3 billion — a 14% increase compared to the previous year.
Founded as an electrical company in the late 1930s, Hewlett-Packard evolved into one of the leading computer and IT companies in the world. Its vast product portfolio ranges from computers, laptops, and notebooks to printers, peripheral instruments, and accessories.
All of these products are backed by an extensive services framework under the HP umbrella, referred to as HP Enterprise Business, which includes "Technical Services, Enterprise Services (formerly known as EDS), HP Software & Solutions, and Enterprise Storage and Networking Group (ESN)." Growth was fueled both by internal research and development and by an extensive acquisition campaign, while portfolio diversification became a key instrument in ensuring that the company retained its leadership position on the market. Through the acquisition of several software developers, Hewlett-Packard ensured that its business encompassed as much of the software market as possible, while simultaneously continuing its leadership in hardware and related markets.
Hewlett-Packard has helped shape the evolution of IT and continues to partner with many important governmental and private entities. It is also an innovative company that continually reinvents its business model and adapts it to the current economic and societal environment in order to remain competitive in the medium and long term.
References
BR Staff Writer. (2007). HP reaches $100 billion revenue mark for the fiscal 2007. CBR Online. Retrieved November 4, 2009, from
Wikipedia. Hewlett-Packard. Retrieved November 4, 2009.
Pui-Wing, T. (2002, September). For Hewlett-Packard, the real competition doesn't make printers. The Wall Street Journal Europe.
2008 Annual Report. Hewlett-Packard. Retrieved November 4, 2009, from http://media.corporate-ir.net/media_files/irol/71/71087/HewlettPackard_2008_AR.pdf
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