Yet, they are also illustrating how they face tremendous amounts of competition in the industry. Part of the reason for this is because, of shifts in demand and the ability of new rivals to quickly enter the field. As a result, the company must be able to capitalize upon these changes, in order to maintain their domination.
Framework for Strategic Analysis
In the case of HP, there are a number of different issues that must be analyzed to determine the overall strengths of the company (strategically speaking). This involves, examining various elements to include: the nature of the product / service, the degree of integration within the value chain, the degree of geographical and industry diversification. These different elements are important, because they will tell you how quickly the company is adapting to the underlying challenges that they are facing.
The nature of the product / service is when you are looking at the overall amounts of demand from customers and how this will have an impact upon the company. As the branding of the product and the ability to remain competitively priced, will determine how successful a company will be in the future. In the case of HP, they have been offering a number of different products, at host of price ranges. This is important, because it has allowed the company to be able to maintain its dominance in the sector. While at the same time, helping them to: reach out to variety of consumers and businesses. When you put these different elements together, it means that the company has been able to keep up with the changes in markups and maintain their strong brand image.
The degree of integration in the value chain is when the company has control over the production process through vertical integration. This is when the number of competitors will decline, by one company purchasing another. In the case of HP, they have engaged in vertical integration with their purchase of Compaq. Even though there were a number of different challenges during the process (such as: integrating the two companies together). The reality is that this merger, allowed the company to be able to maintain its dominance, by using Compaq's distribution / manufacturing process and their focus on the low to medium end markets. This helped HP to be able to redefine itself, by offering a wide variety of electronic to consumers. While at the same time, they could be able to focus on their core markets. Once this took place, it meant that the company would be able to increase their domination of sector through: having multiple product channels. ("Case Study")
Geographical diversification is when you are spreading out the risk by not over investing in a particular region. The idea is that by limiting exposure to one area will help to protect the company against adverse events that could occur. In the case of HP, they are been embracing geographical diversification, by focusing on creating a host of different manufacturing facilities around the world. This has helped the company to be able to keep up with changes in demand and prevent adverse impacts from volatility in the currency markets. A good example of this can be seen with the company focused on offering variety of services to Asian markets. As they have built a number of different manufacturing facilities and sales offices in these regions. Where, they would establish a host of manufacturing plants in countries such as: Vietnam and China. This would help the company to maintain its dominance, while ensuring that they are maintaining low manufacturing costs. As they do not have to import the different product to the region and can use various regional free...
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