SWOT Analysis of Hewlett Packard (HP)
Hewlett Packard (HP) SWOT Analysis 2019.
Table of Contents
|Name of the company||Hewlett Packard (HP)|
|President & CEO||Dion Weisler.|
|Headquarters||Palo Alto, California, United States.|
|Number of Employees||55,000.|
|Net Revenue||$ 58,472 Million.|
|Net Income||$5,327 Million.|
|Competitors||Dell, Apple, Microsoft, Acer, Asus.|
HP is a leading brand of PCs and laptops. In 2015, HP and HPE became two separate divisions and HP became the division that runs the PC and printer businesses. It has been leading the PC industry for years with the highest sales in the market. Apart from being an innovative brand, HP is also highly popular around the world. This swot analysis lists its strengths, weaknesses and challenges.
HP is among the strongest PC brands which has successfully retained its leadership position in the market. A sizeable chunk of its revenue comes from notebooks and desktops. However, in the printer market too it has maintained its strong position. This has led to stronger financial performance. Its revenue has climbed steadily over the past three years having reached 58.5 Billion dollars in 2018.
One important reason behind HP’s leadership position in the market is its consistent focus on research and innovation. It’s products are most popular because of their productivity and performance. The company invests a significant sum each year in research and innovation. In 2018, it invested around $1.4 Billion in R&D.
Brand equity or how customers overall perceive a brand which includes its image and customer experience as well as the level of trust and loyalty it enjoys, is also an important strength of HP. Due to its focus on product quality as well as customer experience and brand image, the company is among the most trusted PC and laptop brands.
Strong portfolio of computing products:-
HP offers a large range of laptops, desktops and related peripherals. The company has brought products to the market in varying price ranges. This has helped the brand tap into both the lower and higher end segments. From affordable to premium, it has brought models of laptops in all ranges. A large product portfolio is also a key strength of Hewlett Packard.
Declining PC market:-
The PC market has kept declining over the recent years. Rising sales of smartphones and mobile devices have led to reduced sales of PCs and laptops. After having declined for several years, the PC market is seeing stagnant growth. This is affecting the sales and revenue of leading PC brands like HP negatively.
Growing operational costs :-
With time the operational costs of HP have also kept growing fast. In 2018, total costs & expenses of HP grew to $54.4 Billion from $48.5 Billion in 2017. (HP Annual Report 2018).
Diversification can help HP find faster growth and grow its sales and revenue. By entering new businesses and markets, the company can grow its sales and revenue as well as customer base globally.
Marketing and customer engagement :-
The rise of new technologies like digital technology and AI has brought fresh opportunities for large and global brands like HP in terms of marketing and customer engagement. HP can use these opportunities for connecting with its users and to grow its customer connection stronger.
The level of competition in the PC industry is high. There are several major rivals of HP in the market including lenovo, Dell and Apple which are also intensely focused on innovation. Overall due to the high level of rivalry, the battle for market share is intense leading to higher costs of research and development as well as marketing.
Like the entire technology industry, the PC industry is also facing higher government control and regulatory pressure. Apart from the rising compliance related costs, the level of oversight is also making it difficult for businesses to find faster growth or to diversify. Regulatory pressures add to operating costs of HP and can have a negative impact on bottom line performance.
Rising costs of raw materials and labor:-
The costs of labor and raw material have continued to grow rapidly leading to higher operational costs. This creates pressure on the profits and profit margins of brands like HP.