SWOT ANALYSIS OF HP, 2016

Presented by TOOBA FATIMA

DIHE Sukkur campusPrinciples of Management

CEO,HP

Company OverviewHP Inc. (HP), formerly Hewlett-

Packard Company, is aninformation technology (IT) company, which provides a

comprehensive range of products, technologies, software,solutions and services.

Strengths WeaknessResearch and DevelopmentActivities

Operations in DiverseRegions

Personal Systems Portfolio

Patent Infringement Concerns

Business Performance:Printing Segment

Opportunities ThreatsProduct Launches

Strategic Collaborations

Global Printing Inks Market

Rapid Technological Changes

Competitive Environment

Growing Trend of PaperlessWork

SWOT ANALYSIS

Research and Deveolpment ActivitiesStrength

HP focuses on research and development (R&D), which helped it maintain and enhance its competitive position.

HP Labs primarily focuses on the development of cloud,security and information optimization solutions.

It also works on several major areas such as mobility, content and printing, sustainability, and future computing platforms and capabilities.

In FY2015, HP incurredexpenditure of US$3,447 million on its R&D activities, which as a percentage of revenue stood at 3.1%.

Operations in Diverse RegionsHP is one of the leading global providers of products and services.

The company offers its products and services worldwidethrough a strong network of channels.

The company operates its major product development, manufacturing and data centers in several countries.

In FY2015, the company reported 63.6% of revenue fromoutside the US and 36.4% from the US.

Strength

The company offers a robust Personal Systems portfolio, which provides it a competitive edge over its peers.

HP’s Personal Systems portfolio comprises a comprehensive range of commercial PCs, consumer PCs, workstations, thin client PCs, tablets, retail POS systems, calculators and other related software and accessories.

An established Personal Systems portfolio enabled the company to become one of the top three vendors in the global PC market.

It has been ranked among the top five in the laptop market in China for several years.

StrengthPersonal Systems Portfolio

WeaknessPatent Infringement Concerns

The company is involved in patent infringement issues, which led to litigations.

HP is also one of the several defendants in patent infringement lawsuits filed by e.Digital asserting its US Patent No. 5,839,108.

Patent infringement litigations are expensive to defend and can result in the award of damagesand injunctions that could prevent the manufacture and sale of products

WeaknessBusiness Performance: Printing Segment

The Printing segment is one of the major contributors to the company’s revenue. It accounted for 19.8% of the company’s total revenue in FY2015.

Declining sales from this segment hampers the growth of the company.

OpportunitiesProduct Launches

HP continues to develop innovative products to meet the growing needs of its customers.

HP is well positioned to deliver unparalleled value throughinnovative products and solutions.

In 2016, the company launched HP Chromebook 11 G4 Education Edition (EE), a durable, lightweight Chromebook for students and educators.

It also announced enhancements to its consumer premium PC portfolio.

Strategic CollaborationsOpportunities

The company maintains strategic collaborations with leading industry players which give it a competitive edge.

These collaborations generate capital for the company and strengthen its research and development activities.

Digital printing is one of the fastest growing segments in packaging with a projected annual growth rate of 17% in a market expected to be reach US$19 billion by 2019.

The collaboration with HTC enhances gaming user experience.

OpportunitiesGlobal Printing Inks Market

The global printing ink market is expected to reach US$18.19 billion by 2017.

Geographically, the US, Europe, Asia Pacific, China, and India are expected to be the fastest growing market for printing inks.

Such potential market for printing inks could help HP undertake expansion and improve its revenue in the future.

ThreatsRapid Technological Changes

The introduction of products using new technologies or the adoption of new industry standards can make the existing products or products under development obsolete or unmarketable.

In order to remain competitive and in order to increase its sales, the company needs to adapt to the rapidly changing business environment.

ThreatsCompetitive Environment

The major competitors in the Printing segment include Canon USA, Inc., Lexmark International, Inc., Xerox Corporation, Seiko Epson Corporation, Samsung Electronics Co. Ltd., and Dell.

In most of the segments, competitors resort to price cutting measures, as a means to expand their market share.

Such fierce competition in the markets served by the company could affect its business and market position.

ThreatsGrowing Trends of Paperless Work

Paper-related systems and products are being replaced by digital content.

Emails and digital documents are increasingly replacing traditional means of sending and storing information.

The shifting trend to digitization of information could become a major challenge to companies such as this.