Hewlett Packard
Hewlett Packard started in 1939 in a garage by
two people, Bill Hewlett and
David Packard with just $538 of working
capital. After a string of failures,
their company’s first successful
product, an audio oscillator better than
anything on the market, earned a
U.S. patent and an order from Disney Studios
for eight units to help produce
the animated film Fantasia. From 1940 to 1950
they moved from their garage to
a rented building on Page Mill Road in Palo Alto
and then constructed their
first HP-owned building that was 10,000 square foot.
In 1957, HP had
their first public stock offering November 6, 1957 and net
revenues were $30
million with 1,778 employees and 373 products. In the
1960’s, HP was
listed on the New York and Pacific exchanges as HWP and had its
first listing
on Fortune magazine as of one of the 500 U.S. companies. HP in
1967
started operations in Boeblingen, Germany introducing a non-invasive
fetal
heart monitor that helps babies by detecting fetal distress during
labor. In the
1970’s revenues increased to $365 million with over 16,000
employees. ( HP.com
) In the 1980’s revenues again increased to $6.5 billion
with over 85,000
employees. They introduced their first personal computer,
the HP-85 and
introduced HP LaserJet printers, the company’s most successful
single product
ever considered a standard for laser printing today. HP moves
to the top 50 on
Fortune 500 listing - 1 - at No. 49. Finally in the
1990’s, HP opens research
facilities in Tokyo, Japan with net revenues of
$13.2 billion and over 91,000
employees. ( HP.com ) HP also introduced
portable computers that lasted on
batteries that would last a flight across
the U.S. All these products moved HP
to the No. 2 position in the U.S.
market. Today HP has ballooned into a
multinational company with 104
divisions, 123,000 employees worldwide, 19,000
products and sales over $47
billion. ( HP.com ) Great products ultimately come
from the minds of
motivated and capable employees, the second key to HP’s
success. After the
Second World War, the company began to hire talented engineer
and scientist
that were no longer working in the war that were from other
technology
companies and government funded labs. These were high priced
experienced
workers that helped HP’s development of different successful
products. (
personal Journal ) The company structure looks like a pyramid. At
the top are
the board of directors followed by President and Vice President.
There
are Presidents and Vice Presidents in different divisions of the
company.
Finally, there are general managers, middle managers, lower
managers and
employees. Hewlett Packard’s Mission statement is to improve the
ways
individuals and organizations around the world create, access, use
and
communicate information on the road or from the desktop, in the office
and in
the home. HP is a worldwide leader in personal computing; setting new
standards
in such areas - 2- as Mobil computing network management, 3-D
graphics and
information storage. Computer products include eight
manufacturing divisions in
North America, Europe and Asia, with sales and
support in more than 110
countries. These divisions are separated in Mobile
Computer Division, Business
Desktop Division, Home Products Division,
Asia Pacific PC Division, Workstation
Systems Division and information
storage group. ( Information Week ) As
explained above HP global market place
allows the company to expand in different
countries and people in two ways.
First HP.com allows virtually anyone with
Internet access to log on under
the URL and actually order online. One problem
that some companies are having
is that 65% of the Internet cites are only in
English. (
www.firstsearch.com ) On Hewlett Packard’s website you only need to
choose
the country that you live in and the pages will translate the text into
that
language. There is product information about you future or present
purchases,
software updates of the product, and also technical support through
email.
Finally HP has 24 hours a day 7 days a week of customer support
throughout
the countries that have operators to assist you on the product.
People
are more willing to buy products and services from a manufacture that
can
provide both the support and the opportunity to buy easily from Hewlett
Packard,
and HP provides this! One example is that Dell a online company that
build
computer as they are order from the customers and the business offer
one of the
best support and - 3 - warranties in the computer industry. HP is
following
their online strategy closely to Dell’s way of operating the sales
and
customers. As this company expands in growth it leaves other smaller
companies
behind that can’t compete with this computer giant. These smaller
companies
have trouble to match HP’s prices and customer support. One example
of this is
a local owned family shops in a country that are not able to
compete with they
type of products and services offered by HP and these
companies either have to
stop selling or move away from the competition. With
communication and
technology growth, it will be easier to climb the cultural
boundaries that other
companies had trouble overcoming in the past. This
would be in having other
countries buying an American made product. The
Internet is helping in crossing
those boundaries by offering global support
and products. With the support and
products offered by HP, other companies
may have troubles trying to match or
outperform. This leads to closing down
of shops and other smaller retailer that
can affect jobs in that country.
People of other diversities may have problem
accepting these changes and may
not want to make the change. The older
generation that is not ready or unable
to use computers may have troubles
adapting to buying over the Internet.
Another problem is not all people from
other countries are financially able
to pay for a computer like people in the
U.S. This could be another
problem that HP is not yet ready to overcome.
Eventually as time goes on
technology will be - 4 - available to all and these
problems might be solved
but new problems will replace the old and there will be
other obstacles to
avoid. Hewlett Packard’s Response to a Globalizing Economy
HP now has a
strong commitment to women's advancement. One prime example of this
would be
its biannual Technical and Women's Conference, which last year
brought
together 2,000 female HP scientists, engineers, professionals and
managers from
26 states and 12 countries, in order to discuss business
issues, especially as
they relate to gender. HP picked up the tab for
employee travel expenses, too.
Work and family issues remain on the front
burner as well. Last year the company
was listed as an ABC Champion, leading
to the funding of 25 child and elder care
projects in HP communities. The
other news here is the ongoing redesign of work
schedules to provide more
flexibility. Managers have been trained to be
receptive to these needs while
employees have been encouraged to try new
options. As a result, HP has some
big numbers to show for its efforts. Nearly
3,000 people work at a
"virtual office"; 500 share jobs and 1,450
employees are on compressed
workweeks. HP announced on February 28, 2000 that it
would be supplying
computers for its "Wired Workforce" program in which
computers are made
available for all Delta Air Lines employees at a substantial
discount through
PeoplePC. - 5 - The Wired Workforce program was announced
February 4 in a
joint presentation with PeoplePC. The San Francisco based
company will be
responsible for order fulfillment and technical support for the
program. Over
the next few months, Delta Technology and PeoplePC will work
closely to test
all aspects of the program, including secure access to the
airline's
intranet. HP will provide multiple configurations from its HP
Pavilion
desktop line, the No. 1 selling retail PC. HP is moving rapidly
forward with
implementation of their 'Wired Workforce' program and look
forward to the
advantages their people will gain. In 1997, the HP established
a dedicated task
force to address the issues raised by the introduction of a
European single
currency (the Euro) for early performance as of January 1,
1999 and during the
transition period through January 1, 2002. HP’s primary
focus has been on the
changes needed to deal with a mix of Euro and local
denomination transactions
from the first day of changeover - January 1, 1999.
Since the beginning of the
transition period, product prices in local
currencies are being converted to
Euros as required. At an appropriate
point during the transition period, product
prices in participating - 6 -
countries will be established and stored in Euros,
and converted to local
denominations. System changes were implemented to give
multi-currency
capability to the few internal applications that did not have it
yet, or to
ensure that external partners facing systems processing euro
conversions be
compliant with the European council regulations. ( Advertising
Age ) The
HP has developed plans to support display and printing of the Euro
character
by impacted products. Most products are currently able to do these
functions
while plans are still in process for a few remaining products. HP does
not
presently expect that introduction and use of the Euro will materially
affect
the Company's foreign exchange and escaping activities or the Company's
use
of derivative instruments. HP management does not expect that
the
introduction of the Euro will result in any material increase in costs to
the
Company and all costs associated with the introduction of the Euro
will be
expensed to operations as incurred. While the HP will continue to
evaluate the
impact of the Euro introduction over time, based on currently
available
information, management does not believe that the introduction of
the Euro
currency will have a material adverse impact on the HP's financial
condition or
overall trends in results of operations. - 7 - Hewlett Packard’s
Response to a
Globalizing Political Environment Economic, political and
other risks associated
with international sales and operations, particularly
in Korea and Japan, could
negatively affect HP sales. They sell products
worldwide, their business is
subject to risks associated with doing business
internationally. HP’s net
revenue originating outside the United States, as a
percentage of our total net
revenue, was 54.4% in fiscal year 1998 and 54.9%
for the nine months ended July
31, 1999. They predict that revenue from
international operations will continue
to represent a large portion of our
total revenue. In addition, many of their
manufacturing facilities and
suppliers are located outside the United States. HP
does a substantial
portion of their business in Korea and Japan, which have been
subject to
increased economic instability in recent years. Their business has
declined
in 1998 when Korea and Japan experienced economic difficulties. The
return of
weakness in these economies or weakness in other international
economies
could and may have a significant negative effect on HP’s future
operating
results. HP is dealing with various rules and regulations, in
particular is
its compliance with the Food and Drug Administration regarding
regulations on
a wide variety of product activities from design and development
to labeling,
manufacturing, promotion, sales and distribution. - 8 - The medical
device
products produced by Hip’s healthcare solutions business are subject to
those
standards given by the United States Food and Drug Administration (FDA)
and
similar international agencies. HP has received a warning letter from
the
FDA in 1996 alleging non-compliance with the FDA's quality system
regulations at
one of our facilities. The FDA's quality systems regulation
includes elaborate
design, testing, control, documentation and other quality
assurance
requirements. HP had to apply considerable resources to address the
FDA's
concerns. HP has resolved the issues identified in the FDA's letter and
the FDA
is satisfied with our assessment If HP fails to keep up acceptable
compliance
with the FDA's quality system and other regulations, HP will be
forced to recall
products and cease their manufacture and distribution. (
Hoovers.com ) The
Global Industry The worldwide personal computer
industry grew 21 percent last
year, led by strong demand in the United
States. Increasing affordability of PCs
and the growing demand to get "
online ", the percentage of U.S. homes with
PCs advanced from 38.5% in
1995 to 52.7% in 1999. As a computer Industry as a -
9 - whole had to
compete for DRAM in late 1999 because of the Taiwan earthquake.
Prices
doubled 100% in August and then again in September. This suspended the
demand
in PCs during the holiday season. In entry-level computer HP was again
behind
IBM with 12% of market share compared to IBM’s 21%. HP has gained
market
share in the midrange PCs with 21% compared to IBM’s 23%. ( Standard
&
Poors ) HP grew in market share during the end of 1999 from 6.2% to
8.4%.
HP’s growth rate worldwide is 39.6%, which is the second fastest
growth rate
behind Dell computer. In revenues HP is 2nd behind IBM with $47
billion and 2nd
again in net income behind IBM with $2.9 billion. Under
operating profit margins
HP ranked 6th with 8.16%and with return in
capital of 15.51% also 6th in the
industry. ( Moody’s Industry Review ) One
thing that HP does lack in is in
computer sales in other countries outside of
the U.S., like Canada where they
are not even ranked in the top 5. Globally
HP leads the printer market with
their HP inkjet printers and is gaining
market share in the PCs. HP is growing
rapidly into the worldwide market and
is growing at a faster rate than before
because of the global access offered
to business and customers over the
Internet. - 10
-
Bibliography
Global Computer Industry, New York Times, New York;
Jan 29, 1999; Late
Edition; pg.C.18 Hoovers Online Business Network;
computer industry analysis;
hoovers.com Tobi Elkin; Advertising Age, Chicago;
Jan 31, 2000; Vol. 71, Iss. 5;
Midwest region edition; pg. 32, 3 pgs
Laabs, Jennifer J. (1993), " Hewlett
Packard’s core values drive HR
strategy, "Personal Journal, 72, 9 (February)
38-48 " History, " (2000),
http://www.hp.com (accessed 2-9-00) "Hewlett
Packard Company " (2000),
http://www.firstsearch.oclc.org (accessed 2-9-2000)
Korzenowski, Paul
(1999), " Hewlett Packard Makeover Starts Turning Heads,
"
InformationWeek, 761, 9 (February) 189-192 Moody’s Industry review
(1999), "
Comparative Rankings. " " Computer Hardware, " (1999),
Standards and Poors
Lazich S. Robert; Market Share Reporter, (1999) pg
190-192 - 11 -