HP Palm
Generic Strategy
Porter's generic strategy typology highlights that firms succeed either by being a cost leader, a differentiated producer or by being a niche player, again with either a cost or differentiated focus (QuickMBA, 2010). Palm's approach is mass market, and the company is essentially competing as a differentiated player. With its proprietary operating system and lack of ultra-low price points, Palm is clearly adopting the same differentiated strategy with which it had considerable success in the handheld computer industry.
Key Input Factors
The three input categories are environment, resources and history. To be a differentiated producer in the smartphone industry, Palm needs to have a strategy that is congruent with the key factors in each. The most important environmental input is the competitive environment; the most important resource is marketing ability and the most important historical factor is the company's brand. These three key inputs will be analyzed in the context of Palm's smartphone, which while only a couple of years old, has experienced significant volatility, leading to its current poor state.
The competitive environment is difficult and volatile. Competition is largely based on operating system rather than device manufacturer, although three of the major players are both. These producers are all competing with a differentiated strategy -- Apple, RIM and Palm. The other producers use either the Microsoft or Android operating systems. The industry is driven by both marketing and technological innovation. The pace of innovation is rapid, and market share changes rapidly as a result of innovation. Palm has had difficulty carving out a niche as a differentiated player in part because it competes in both the business and consumer markets. RIM and Apple compete in business and consumer respectively, with little crossover....
Five Forces Analysis of Palm Palm's Strategy Palm's corporate strategy is what Michael Porter would call Cost Leadership. According to Gavin Reid, "Cost leadership is often driven by company efficiency, size, scale, scope and cumulative experience (learning curve). A cost leadership strategy aims to exploit scale of production, well defined scope and other economies (e.g. A good purchasing approach), producing highly standardized products, using high technology." In the first element of its
The greater product focus will eliminate a key weakness of not being strong at any one market. Professionals and consumers have distinctly different needs, and Palm needs to figure out which of these it is more likely to meet and then pursue that to the detriment of the other. Pursuing both has left it vulnerable. The only real opportunity in smartphones is with innovation, as the market has tended
In the short run, the company has an uphill battle to establish itself in a tough market -- Palm's past successes in the industry are almost irrelevant at this point -- but in the long run the potential exists for HP/Palm to develop game-changing technology. The overall strategic fit therefore is only partially congruent. Internally, the three factors are congruent with each other. The resources, environments and histories of these
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