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Hp Compaq Environment Analysis

715 words - 3 pages

HP is one of the largest companies in the world but despite its success and multinational reach, it is still subject to forces beyond its control. Hence, in order to properly defend its empire and plan for growth, management of HP have to understand the way the external world works, where it is progressing towards and how it all affects HP. Three broad and different categories form the external environment of HP and these are the general, industry and competitor environments. The more relevant and significant aspects of each will be delved into for the purposes of this analysis.
General Environment
The general environment affects HP’s operating landscape as well as the markets it ...view middle of the document...

Since societal needs drive technological growth and technology is capable of restructuring society, HP’s strategy should include an assessment of its own impact on the world and how it can turn that to its benefit.
Another segment of the general environment that cannot be ignored is the economy. In the current downturn, sales will be negatively affected by the decreased disposable income by customers and tight cash flows of companies. Plans for expansion may have to be rescheduled or downscaled and it is an opportune time for management to consider restructuring in order to better meet customer demand when the economy recovers.
Industry
When considering the attractiveness of an industry or how it should strategise its approach and organise its defence, HP has to keep the following factors in mind:
Threat of new entrants
Buyer Power
Supplier Power
Substitutes
Intensity of rivalry
Consumer markets contain numerous players and since suppliers tend to be the same for certain components, products can seem homogeneous if not for cosmetic differences and co-branding initiatives. Costly actions like price cuts and inflated selling expenses may have to be added to strategic decisions. The next section on...

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