Summary
This paper examines the strategies Hewlett-Packard (HP) implemented to remain competitive in the market and achieve long-term success. The paper will also include business-level strategies and corporate-level strategies adopted by HP Company. As the main HP’s competitor, the paper also discusses how Dell has adapted its strategies to remain competitive in both slow-cycle and fast-cycle markets. A comparison of both the slow-cycle and fast-cycle markets with regard to Dell is also provided.
Business-Level Strategies
There are several business-level strategies that firms can use to gain a competitive edge in the market. Differentiation business-level strategy is defined as a strategy that involves creating a product or service that is perceived as being unique in some way (Hitt et al., 2019). HP’s differentiation strategy involves creating a unique brand identity to provide superior customer service. It focuses on offering products and services with higher quality and is more innovative than its competitors. Moreover, the firm has invested heavily in research and development to create innovative products and services. This includes investing in technology such as artificial intelligence, machine learning, and robotics (Hitt et al., 2019). It also invests in developing software and applications that improve customer experiences.
HP’s strategy of differentiation has allowed the company to gain core competency skills in the marketplace. A company’s core competency is its unique set of skills that makes it successful in a variety of contexts and provides value to customers in all the companies it serves (Hitt et al., 2019). The company also uses such core competencies as the creation of a strong brand image for its products. The reputation of the firm’s brand has remained solid among its customers. Its dedication to quality and innovation has earned it a trustworthy recognition among consumers (Richter et al., 2021). Furthermore, from the lower to the upper end, its products in different price categories meet the demands of a broad client base. A powerful brand image in the technology business results in an increased strong competitive edge among its competitors.
Lastly, a product differentiation strategy is built from core competencies such as a strong focus on innovation based on research and development (R&D) capabilities. HP has prioritized innovation for brand and market share expansion (Gupta & Bose, 2022). The business has continued to invest in research and design to produce more popular models that are newer, more efficient, and more aesthetically pleasing, such as the Pavilion, Omen, ProBook, and Spectre. In a highly competitive industry, it is essential to maintain client engagement if a business wants its brand to expand rapidly. For instance, according to McCauley (2022), HP, using the differentiation strategy, has developed top-notch models, including budget models, business-oriented laptops, and premium workstations.
Corporate-Level Strategies
The corporate-level strategy of HP is to concentrate on its core competencies and to take advantage of its strengths to gain a competitive edge. The ability to develop cutting-edge products and services is one of HP’s core competencies, along with its strong brand recognition, extensive research and development capabilities, and global presence. Related constrained diversification strategy is one of the strategies that the Corporation uses to ensure that they have increased revenues from sales, hence, profits. The related constrained diversification strategy, according to Hitt et al. (2019), entails escalating the scope of the company’s operations by entering new markets or industries for increased sales and revenue for profits with the firm sharing resources and activities across its businesses. For instance, by purchasing Palm, Inc. in 2010, the Company diversified into the consumer electronics market (Cheng, 2022). With the help of this acquisition, the firm was able to break into the mobile device market and provide a variety of goods and services to its clients.
Additionally, the business has increased its market share in the enterprise sector by diversifying. The firm bought Autonomy, a software provider with a focus on enterprise search and analytics, in 2011 (Cheng, 2022). With the help of this acquisition, HP was able to provide its clients with a variety of enterprise solutions, such as enterprise search, analytics, and data management. Other businesses in the enterprise sector, including 3Com, Aruba Networks, and Vertica, have also been acquired by HP (Cheng, 2022). The corporation has been able to grow its enterprise market presence through these acquisitions and provide a variety of goods and services to its clients.
The firm also used diversification to increase its market share in the cloud computing sector. Cloud computing business Eucalyptus Systems was purchased by HP in 2013 (Raafat & Sciglimpaglia, 2021). With the help of this acquisition, HP was able to provide its clients with a variety of cloud computing solutions, such as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS) (Raafat & Sciglimpaglia, 2021). Other cloud computing market players like Cloud Cruiser and CloudSwitch have also been acquired by HP. Through these acquisitions, HP has been able to increase its market share in the cloud computing sector and provide a variety of goods and services to its clients. Furthermore, the business has adopted a diversification strategy to lessen its reliance on a single business model. By making investments in R&D and acquiring new technologies, the firm has also diversified its business model (Raafat & Sciglimpaglia, 2021). This has made it to expand its customer base by pursuing opportunities in new markets and sectors.
Competitive Environment Analysis
The market HP operates in is fiercely competitive and ever-changing. Dell, Apple, and Lenovo are HP’s rivals in the laptop industry. In 2016, the Company regained the top spot in the laptop market in terms of shipment volume, followed by Lenovo, Dell, and Apple (Pitt, 2022). Dell is perhaps the market’s most formidable challenger to HP as indicated in the below analysis. It was founded 33 years ago and has since been instrumental in generating a substantial number of computer and technology goods for the broad market.
In addition to focusing on the production of other hardware and software components through its diversification corporate-level strategy, it is gradually regaining the market share it formerly. As such, it had in the past decades, used the differentiation business-level strategy through production of high-end products that meets he demands of customers (Hitt et al., 2019; Bhasin, 2018). Using a diversification corporate-level strategy, Dell Corporation has participated in a number of acquisitions, which is a crucial fact to comprehend (Bhasin, 2018). Some of these actions had disrupted the company’s production and distribution operations, while others had strengthened the organization (Hitt et al. (2019). Dell derives a greater proportion of its income from the sale of computer hardware items, particularly PCs, Desktops, Scanners, and printers, and the confluence of these products makes it a formidable rival to HP.
As a company, Dell has adopted a cost leadership approach that has proven to be very effective. The company’s success may be attributed to its ability to cater to individual preferences in terms of product configuration, timing of delivery, and pricing (Bhasin, 2018). Due to declining performance and the need of seeking out new growth prospects, a dual-strategic approach is being implemented to track the ever-evolving state of the industry. When it comes to creating value for its customers, Dell is able to take advantage of the rewards of an integrated approach by combining its cost leadership expertise with differentiated product attributes (Bhasin, 2018). More chances will present themselves as Dell evolves into a more diverse Technology corporation. Dell’s ability to adapt to the reality of its industry has been bolstered by the integration of business and corporate strategies.
From a business-level strategy, HP excels due to the dependability of the brand and its products, hence, the diversification strategy which is similar to Dell’s. As a result of its status as one of the largest corporations in the computer industry, it has relatively easy access to the capital and other resources it needs to operate (Raafat & Sciglimpaglia, 2021). Culture is seen as a major factor in innovation and a competitive advantage. However, a corporation’s scale might work against it if it slows down its ability to adapt to market changes and make key choices. HP’s reliance on a single CPU supplier, Intel, highlights the company’s narrow supply chain (Raafat & Sciglimpaglia, 2021). A conflict between them might hurt HP’s standing in the market.
Competitive Environment Conclusion
From the above analyses, Dell has the best chance of long-term success compared to HP. Due to its excellent R&D resources as a differentiation business level strategy, the firm can produce a wide range of products that are designed to meet the needs of its customers. For instance, HP uses related constrained diversification strategy as its strategy, which is similar to Dell’s because 65% are PC revenues and roughly 35% are in the infrastructure space (Tan, 2023). To this, Tan (2023) posits that, after the impact of such calamities as COVID-19, it is predictable that the infrastructure business will continue to grow at a faster pace than the PC business over the intermediate term. Therefore, with the infrastructure space, there is a long-term success overseen for the future. While HP’s products might not be as extensive, Dell’s wide range of products enables them to meet customer demands (Tan, 2023). In order to satisfy customer needs, the firm offers a wide range of products, from consumer electronics to business solutions (Cheng, 2021). As a result, it is able to serve a variety of clients, including business people and consumers.
At the corporate level, a crucial component of long-term success is having strong marketing and sales capabilities, which Dell possesses. The Company has made significant investments in digital marketing, enabling them to connect with customers all over the world. Additionally, it has established solid connections with retailers and distributors, which enables them to have a significant market presence. Furthermore, the Corporation has excellent customer service skills that enable them to provide customers with the best experience possible (Liu et al., 2023). Dell may benefit from the related diversification approach in at least two ways.
To begin with, when one of a company’s businesses has already acquired a core skill, it may be transferred to another without further investment. The intangible nature of resources provides a second source of value generation through interdependence among businesses. The management teams at Dell are committed to fostering growth and profitability, which enables it to maintain its position as a competitive player in the personal computer market (Cheng, 2021). In addition, the firm is able to provide its customers with the best possible experience thanks to its excellent customer service capabilities.
Market Cycles
In a slow-cycle market, Dell’s strategy would remain the same as HP’s. According to Hint et al. (2019), In slow-cycle markets, competitors have to work hard to imitate a firm’s successes, and prices rise and fall at a glacial pace. In this case, in the slow-cycle markets, the Dell’s acquired a merger with EMC and VMware would facilitate long-term success with reduced ability for imitations because it would be expensive to break the merger. As per Mitsis (2018), when it comes to enterprise-level database administration, EMC’s flagship provided a networked information storage system. In addition, VMware was an early leader in virtualization, which paved the way for users to deploy different operating systems on a single hardware platform simultaneously. Copying the capacity of VMware and EMC’s by competitors in the market would take a lot of resources for any successful take-over.
Moreover, since EMC was the best in the storage administration, any attempt to use its services meant, competitors would have to use a lot of resources to break the partnership with Dell; hence, it ensured that EMC would not partner with any competitor. The merger is a diversification strategy in the corporate level; therefore, the company would continue to focus on reducing costs and increasing its potential for growth (Mitsis, 2018). With regards to VMware acquisition, Dell added high-performing products to a rapidly growing business (Mitsis, 2018). For instance, VMware was an undisputed leader in virtualization, accordingly, in the slow-cycle markets, obtaining the services of VMware would be expensive as it would mean breaking their merger through EMC acquisitions. As such, in slow-cycle markets, Dell’s corporation would be the same as HP, since HP used the same acquisition strategies that would make them sustainable in the market in the long-run.
In a fast-cycle market, Dell’s strategy would not be the same as HP’s. Dell has a differentiation strategy with regards to the infrastructure solutions group (ISG) division. However, according to Hint et al. (2019), rapid price changes and the prevalence of easy, low-cost imitation make fast-cycle marketplaces a dangerous place for businesses to operate in need of a competitive edge. In this case, a company might quickly lose its edge.
To aid its clients in their digital transformation efforts, the firm uses ISG, which offers multi-cloud and big data solutions based on cutting-edge data center technology for its laptops. As such, this business-level strategy of differentiation allows Dell’s products to be designed to function in a hybrid cloud setting (Mitsis, 2018). Nevertheless, in the era of advancing technology, hybrid cloud setting is prone to imitation and copying as prices trends quickly. With risks of cloud migration to facilitate the quick price trends, the model faces competition with many companies trying to offer the best hybrid cloud technologies that meet the market prices (Mitsis, 2018). Fast-cycle markets would differ between Dell and HP because HP does not depend on a single advanced technology to meet the demands of such markets (Raafat & Sciglimpaglia, 2021). As such, Dell’s hybrid cloud technology would face reduced competitive advantage in the fast-cycle markets; hence, increased the possibility for imitation.
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