Competitive Strategy of Hewlett Packard †MyAssignmenthelp.com

Question: Discuss about the Competitive Strategy of Hewlett Packard. Answer: Introduction: Hewlett Packard started by two engineers William Bill Hewlett and David Dave Packard in 1939. The company has its headquarter in California. The HP is known as worlds largest technology provider. Its main activity is to manufacture storage devices, software networking, and many more. HP manufactured its initial computer named HP-85 in 1980. HP competitive strategy is explained through Porters 5 forces model. Competitive strategies by Porter 5 forces model are: Rivalry: In an economic setup, competition amongst rivalry companies decreases profit of company to negligible. In the IT industry competition is huge as there are various company offering identical services. In achieving the competitive advantage, HP has remained in top to innovate its products. This is attained by providing cost effective products in competitive world. For maintaining competitiveness companies are selling their products at low price resulting lower profits. Threat of substitutes: Substitutes means product from other industry that resemble the companys product. A threat in substitute happens when demand of companys product is affected by other industries product. HP believes in providing standards products representing chance to select product of choice. HP attempts to remove trade barrier by regularly updating software and representing brand new product in industry to remain at top. Buyer power: Bargaining power in case of IT industry is high. Consumers are price conscious as they prefer to purchase cheap and superior quality product (Porter 1998 pp 100-130). In case of HP the buyer power is low as demand of its product are high which means that company has power to monitor quantity of production and prices as well. HP has gained advantage over buyers power by stabilising prices which are user friendly. Supplier power: Every industry needs supplier for raw material and labour to manufacture its products. In the IT industry there are erroneous numbers of raw material supplier hence industry is not affected by suppliers. HP is not benefitted by economies of scale due to its low purchasing power (Kinyuira, 2014). However it manages to secure best deals in providing superior quality of raw material at best price. Barriers to entry: Threat of entry in case of IT industry is moderate. Customer usually examines prices of same product with different brands and purchases accordingly. HP and its competitors have low product differentiation (Martin, 2017). Due to absence of government regulation and lower economies of scale in manufacturing indicates threat of new entrants. HP is securing its market share by innovating regularly and opening new stores to reach potential customer. Conclusion: HP is having good competitive strategies. Strategies adopted by HP are helping it to enhance its popularity amongst people and increase sale. It is defeating its rival firms by adopting different strategies. References: Kinyuira, D., 2014 Effects of Porters Generic Competitive Strategies on the Performance of Savings and Credit Cooperatives (Saccos) in Muranga County, Kenya, Journal of Business and Management,16(6), 94-110. Martin, M., 2017, Porter's Five Forces: Analyzing the Competition, Business News Daily, [online]. Available at: https://www.businessnewsdaily.com/5446-porters-five-forces.html. [accessed 1st august 2017]. Porter, M.E., 1998, Competitive Strategy: Techniques for Analyzing Industries and Competitors,pp 100-130, Newyork: The free press.