| Name | Hewlett Packard |
| Industry | Computer and Technology |
| Founded | January 1, 1939 |
| Headquarters | Palo Alto, California, U.S. |
| CEO | Enrique Lores |
| Revenues | $62.070 Billion (FY 2021) |
| Profit | $12.831 Billion (FY 2021) |
| Competitors | Lenovo, Apple, Dell, ASUS, Samsung, Acer, Microsoft, Huawei, |
Company Overview
Hewlett Packard Co., established by William R. Hewlett and David Packard, is one of the world’s leading technology companies. In 2015, it was separated into two publicly traded entities: Hewlett Packard Inc. and Hewlett Packard Enterprise. HP Inc. continues the consumer-facing and printing business line, while HPE focuses on the enterprise technology infrastructure and services. Most of HP Inc.’s revenue comes from the PC business as the printing line faces bigger challenges. Despite the COVID-19 pandemic, HP Inc. continues to thrive. According to Macrotrends (2021), HP’s revenue for a year ending July 31, 2021, was $62 Billion, a 9.3% increase from last year, while the gross profit increased by 20% at $12.8 Billion. Let’s go over the SWOT Analysis of the company.
Table of Contents
HP Strengths 2021:
- Brand equity and brand image.
With 8 decades of service, HP Inc. continues to have a strong market presence in over 170 countries through its quality products and customer experience. There is an easy brand recall from the consumers because of HP’s logo, which conveys the company name well. HP Inc. was in the Top 100 for both Forbes 2020 Most Valuable Brands and Fortune 500 (2021). There is a strong and sustained demand for HP devices. - Sustainability.
HP gained consumer trust as it consistently focuses on the environment and sustainability. According to HP’s CEO Enrique Lores’ Sustainable Impact Report (2020), they will focus on climate action, human rights, and digital equity as the years progress. The goal was to create technology that inspires human progress. HP’s Sustainable Impact agenda helped them gain more than $1B in sales in 2020. - Workforce.
HP promotes a culture of diversity, equity, and inclusion starting from the leaders down to employees and even suppliers. There are approximately 53,000 employees at HP Inc., according to Statista (2020). - Free cash flow.
As stated in the HP Inc. Fiscal 2020 report, HP generated $4.3 billion in net cash provided by operating activities and $3.9 billion of free cash flow. It’s a positive sign for the company as it means they can invest in new products and programs. - Product variety.
HP is one of the strongest and leading PC brands because of its wide variety of products, including laptops, desktops, printers, and other peripherals, at varying price ranges. HP has always produced and is widely known for its sustainable and high-quality products.
The larger part of the company’s revenue comes from notebooks or commercial workstations. Despite the decline in the printing business, more than a quarter of the company revenue comes from this line (Statista, 2020). - Research and Development.
HP constantly innovates to emerge on top of technology trends and competitive pressure. The HP Labs was established as a venue to develop technologies that will define the future of HP. They invest billions of dollars yearly in R&D. In 2020, HP’s expenditure on research and development amounted to about 1.48 Billion (Statista, 2020).
HP Weaknesses 2021:
- Struggling printing business.
During the pandemic crisis, where there is a shift towards work from home and paperless workplaces, much of the revenue comes from PCs, and the printing line struggles to keep afloat. The highest net revenue for HP’s printing business since the split was in 2018 at $20.8 Billion (Statista, 2020). In 2020, it fell to $17.6 Billion. - The decline in PC demand.
The demand for personal computers has been hit by competition from tablets and smartphones. According to Gartner, Q1 of 2020 showed a 12.3% decline in comparison to Q1 2019. This has been the sharpest decline since 2013 caused by the Covid-19 pandemic. - Long-term debt.
HP’s debt has grown even more in 2020 at $5.5 Billion, which was a 16% increase from 2019 (Macrotrends, 2021). As of July 31, 2021, HP Inc., long-term debt is at $6.9 Billion.
HP Opportunities 2021:
- Product Development.
Since the pandemic, consumers have favored notebooks more than desktop computers. With high demands for innovative and efficient solutions, HP should continuously and strongly invest in its research and development. Modern society deems technology as a necessity. This is an opportunity for HP to produce more products and programs that would create a demand from the people. - Focus on marketing.
Digital marketing drives better revenues and better branding. Without strategic digital marketing limits growth opportunities. Lenovo promotes their brand as durable and high quality, using known personalities as ambassadors. HP should focus and invest in digital marketing, especially since the trend these days favors smartphones and cloud technology. Their innovation and marketing strategies should maintain the demand for PCs, laptops, and printing devices. - Newer technologies.
As a technology company, HP should seek opportunities where the business can grow and expand. HP has already adopted the 3D printing technology, and they could develop it more so they can remain the top player in this category. Machine learning and Artificial Intelligence are the future of technology. A big part of their R&D investment should be put into these areas as these will help grow their business.
HP Threats 2021:
- Competition and Rivalry.
Dell and Lenovo continue to be the top competitors of HP, and other brands such as Apple, Acer, Asus, and Samsung are not far behind. The intense competition will continue as these manufacturers invest more in innovation to grow their sales. While HP should continue investing in R&D, it should also polish a strategic marketing plan. HP should increase brand awareness on digital platforms. - Fast-changing consumer behavior.
The effects and restrictions caused by the pandemic accelerate the market dynamics and consumer behaviors. Most consumers would choose to transact online for convenience and safety. HP should be able to adapt to the times and address its role in societal change (Adobe, 2020). It should continue to develop its technology and strengthen its brand marketing.
HP SWOT Analysis Conclusion:
Overall, HP Inc. will continue to be one of the top players in the computer and technology industry. Backed up by decades of experience, innovative solutions, resilience, and creative marketing, they can expand their business into more than just computers and peripherals. The new normal effect caused by the global pandemic opens a lot of opportunities for HP to accomplish its vision of reinventing technology for everyone’s benefit.
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References:
Forbes, (2020). The World’s Most Valuable Brands. Forbes.
Fortune, (2021). Fortune 500. Forbes.
Macrotrends (2021). HP Revenue 2006-2021 | HPQ. Macrotrends.
HP, (2020a). Sustainable Impact Report 2020 Executive Summary. HP
HP, (2020b). HP Inc. Reports Fiscal 2020 Full Year and Fourth Quarter Results. HP.
Statista (2020a). Hardware: Hewlett-Packard’s net revenue from the printing segment from 2008 to 2020. Statista.
Statista (2020b). Hardware: Number of employees at HP Inc. (Hewlett Packard) worldwide from 2001 to 2020. [online] Statista.
Statista (2020c). Hardware: HP Inc’s (Hewlett Packard’s) expenditure on research and development from 1998 to 2020. [online] Statista.
Sun, L. (2020). Don’t Be Fooled: HP Still Faces the Same Old Problems. Fool.
Gartner, (2020). Gartner Says Worldwide PC Shipments Declined 12.3% in the First Quarter of 2020 Due to Coronavirus Pandemic. Gartner.com
Cardona, M. (2020). 7 consumer trends that will define the digital economy in 2021. Adobe.
