Learning is an endless journey; so is blogger!

        HI everyone!

As mentioned in my introduction, majority of the posts here is a summary of lessons learnt in my class. However, the semester has come to an end, which brings us to the end of business policy and strategy. Blogging was quite tasking but an exciting experience; I love sharing knowledge with people, and this provided me with an opportunity to do so. I would like to say a big thank you to Professor Jelena Zivkovic for introducing me to blogger, and the beautiful people that saw it necessary to view my blog against all odds. 

These days, the use of internet has globaly replaced seeking information via other mediums, it is now a much more easier and convenient research tool. For this reason, majority of people use the internet to share their insights and experiences in order to reach a larger population. 

Although this is my last "Strategy" post, I don't intend to stop using blogger. I will continue enlightening people on my interesting discoveries and ideas; i encourage YOU to start blogging too!   

HP Case-Study (Continued): Leadership

• Then it gives a summary of the rationale behind HP’s changes in the scope of its business activities.

This could be simply attributed to its leadership. Over the past years, the strategic activities in HP have seen a lot of variation and displeasure as a result of the unfortunate reactions and decisions stirred by its board members.  This was either caused by absence of cooperation, wrong leadership choices, poor accountability, or both.

These activities ball down to Carly Fiorina’s regime (HP’s CEO), which instated the acquisition of Compaq. Unity was split among the board members as a result of opposition, which established a political setting. This also crippled the secrecy of the organization; key information and decisions began to leak. After series of investigation, the felons were pointed out; the CEO was reportedly involved and exiled. 

Mark Hurd took over the throne, and his five years tenure brought a favourable success to HP. However, the reason of his departure from the company remains very unclear, but it is renown for contributing to the increased conflict among the board. 

Leo Apotheker became the new head of HP; he vowed to transform and recover some of the losses the company faced as a result of Marks exit. This seemed very difficult, but Leo remained persistent. During this battle, his tyranny coupled with some outrageous decisions he made, pushed board members over the edge. The politics reverted against him, and he was dismissed, and replaced by Meg Whitman.

In my opinion, the leaders were too carried away fighting for their personal interest, rather than construct and enforce a rigid strategy that will guide and motivate the company's employees, foster unity, and encourage collective growth.  

•  And finally, it gives reasons for and against the decision to exit PC manufacturing which contributed to the departure of the last CEO Leo Apotheker.

 For: the PC business didn’t seem promising, the returns were not profitable.

Against: It will create financial loss and lead to the eventual exit of investors.

This study of Hp emphasizes the relationship between strategic planning and leadership. Hewlett Packard might have had great strategic plans, but its poor leadership management made it impossible to implement the strategies.

HP (Hewlett Packard) Case-Study

This article presents the results from a study and analysis of both the corporate and business strategic activities of the famous HP (Hewlett Packard) Company.

• It begins by defining some key strategic terms (including vision, mission, and stakeholders), that are used in this article. 

A corporate mission answers the question of “What we do?” It defines the purpose of a business, as well as its present capabilities. It is intended to give the employees and customers a genuine but concise description of what an organization does. It also serves as a roadmap to the vision.

A vision answers the question of “Where we want to go?” The vision can only be achieved over a long period of time, and other times it is completely unattainable and instead serves as a motivating factor for an organization to reach greater heights.

Stakeholders include a group of people or an individual affected by an organizations decisions or activities such as the customers, employees, investors, and even its immediate environment.

• It states the companies mission and vision statement, and how the companies objectives meets the need of its stakeholders. 

Mission Statement: “We are a leading global provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses, and large enterprises, including customers in the government, health and education sector.” (Professor Ahmed)
Vision Statement: “We believe diversity is a key driver of our success. Putting all our differences to work across the world is a continuous journey fueled by personal leadership from everyone in our company. Our aspiration is that the behaviors and actions that support diversity and inclusion will come from the conviction of every HP employee - making diversity and inclusion a conscious part of how we run our business throughout the world.” (hp)

Customers: providing products of high quality and value
Shareholders: ensuring organizational growth and maximizing profit
Employees: rewarding performance, creating a comfortable work environment, and empowerment
Society: its contribution to technology, economic growth, and social responsibility.

• It spells out the businesses the company operates in and how it seeks to achieve competitive advantage. 

Businesses: It sells computing and technological products and services to homes and businesses.
Competitive Advantage: As emphasized in its vision statement, HP fosters a diverse and inclusive working environment, free from any form discrimination. This produces an innovative environment, such that it brings together a large number of employees of altered philosophies and brainpower, and provides each of them with an equal chance to participate in the company’s activities. “A diverse, high-achieving workforce is the sustainable competitive advantage that differentiates HP.” (hp)

• It also seeks to identify the companies Strengths, Weakness, Opportunities, and Threats, (also known as SWOT).

I N T E R N A L	STRENGTHS -Brand name: HP is famous for its products that are used in several countries and continents. - Diversified Products: It doesn’t focus in the production of one item, but specializes in a variety. - Technological contribution:  HP has been in the technology market for a long time, and has contributed to its development.	WEAKNESS - Inconsistency: the organization has an imprecise vision, which makes it difficult to know where its heading to  - Leadership Structure: the management system lacks accountability, and has slid off from the old inclusive tradition. - Conflict: The altered interests of the board members, and employees to some extent.
E X T E R N A L	OPPORTUNITIES - Research: It can explore future customer needs, and discover how to meet them. - Innovation: HP should think outside the box and establish new products and ways to out do its competitors. - Printer: Its global dominance in the printing sector will result to increasing profitability.	THREATS - Competitors:  Rival companies such as Apple can win over its potential customers - Technological innovation: when there is a change in time or advancement, and HP is slow to respond, it is likely to lose its position in the market. - Bankruptcy: If HP begins to lose its customers and investors, the company will continue to decline and declare itself bankrupt.

    

Competitive Advantage In Mature Industries

As explained earlier, the maturity stage is the highest level that can be attained, although very critical because it could eventually lead to the decline of an industry. In order to save a business from declining however, the following factors could be considered.

Cost Advantage: Traditionally, it is believed that minimized cost encourages an increase in investment or profit; this could be achieved by adopting the three elements introduced below.

• -       Low-cost Inputs: At the maturity stage, an industry should have explored the right quantity of materials needed to produce; this prevents it from buying in excess. Also, when an industry establishes a good relationship with a supplier, it is likely to receive a reduction in cost of materials. Therefore, an industry should seek ways to spend less on materials while it maximizes production.
• -       Low Overheads: These are expenses that a business takes care of that doesn’t directly contribute to the production process, such as rent and transportation. However, an industry that pays rent or constantly seeks outside help to transport its products should consider purchasing a building and/or vehicle for itself.  
• -       Economies of Scale: This is a discount enjoyed by the purchase of goods in a large quantity compared to its unit value. A good example of this is a manufacturer and wholesaler transaction. Apparently, a wholesaler that decides to buy in bulk spends less than a retailer or a consumer who buys in smaller units.

Segment and Customer Selection: The success of every business is dependent on its consumers, and this is why it is very necessary to investigate and discover their preferences and other means of satisfaction. Here are some helpful ways to win the pleasure of customers.

• -       Value Exchange: this involves a study in the transactions made by customers to determine the most desired product by a group of customers. Amazon makes use of this element; by suggesting books to customers based on other choices made by previous buyers or viewers of the same book.  
• -       Customer Relationship Management: here, a business builds a good relationship with its customers by providing extra benefits that are initiated by the level of transaction made. For example some casinos provide their top clients with hotels and other services for free.
• -       Crossover: this is the act of creating a new product by merging the features of two existing products.   

Quest For Differentiation: every business has an ambition to be ahead of its competitors, and the only possible way to do so is by doing things differently. This could be practiced by:

• -       Innovation: bringing in new ideas and different concepts of production.
• -       Augmenting Product and Services: could also achieve differentiation.

Mature industries that successfully implement these strategies will be able to resist falling into the unfavorable decline stage, and most likely stand out in the market.

Factors That Affect the Industry Life Cycle

In addition to the previous post on “Industry Life Cycle,” I would like to introduce the major factors that influence change in an industry’s life cycle.

Demand Growth: the pattern of demand and supply is responsible for the industries movement along various stages of the cycle. At the emergence of a business, there tends to be an increase in demand for products, which outweighs the supply level. As the business grows, the supply increases to meet up with the increasing demand level. During the stage of maturity, the supply level becomes higher as demand decreases. However, if the industry implements certain measures to enable it maintain a positive demand/supply pattern, it prevents it from declining.  The decline stage entails a decrease in both demand and supply.

Creation and Diffusion of Knowledge: An industries ability to innovate and modify products makes it stand out from competitors. This means that a business should observe consumer trends to improve its product design and function, ensuring that it provides the best quality of products and services, to prevent it from declining.