Case Study Description of Hewlett-Packard: Manufacturing Productivity Division (A)
In late summer 1986, the management of the Manufacturing Productivity Division (MPD) of Hewlett-Packard (HP) was in the process of making major market selection and product policy decisions. MPD is a small division which develops and markets manufacturing productivity software (materials management, MRP, etc.). The product policy decisions included degree of product customization and choice of operating systems (UNIX or not?). The relationship between the marketing and research and development functions is a major issue.
Swot Analysis of "Hewlett-Packard: Manufacturing Productivity Division (A)" written by Benson P. Shapiro, Lawrence B. Levine includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mpd Productivity facing as an external strategic factors. Some of the topics covered in Hewlett-Packard: Manufacturing Productivity Division (A) case study are - Strategic Management Strategies, Organizational culture, Product development, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Hewlett-Packard: Manufacturing Productivity Division (A) casestudy better are - – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, there is backlash against globalization, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Hewlett-Packard: Manufacturing Productivity Division (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hewlett-Packard: Manufacturing Productivity Division (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mpd Productivity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mpd Productivity operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hewlett-Packard: Manufacturing Productivity Division (A) can be done for the following purposes –
1. Strategic planning using facts provided in Hewlett-Packard: Manufacturing Productivity Division (A) case study
2. Improving business portfolio management of Mpd Productivity
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mpd Productivity
Strengths Hewlett-Packard: Manufacturing Productivity Division (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mpd Productivity in Hewlett-Packard: Manufacturing Productivity Division (A) Harvard Business Review case study are -
High brand equity
– Mpd Productivity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mpd Productivity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Mpd Productivity is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Mpd Productivity is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hewlett-Packard: Manufacturing Productivity Division (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Mpd Productivity is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Benson P. Shapiro, Lawrence B. Levine can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Sales & Marketing industry
– Hewlett-Packard: Manufacturing Productivity Division (A) firm has clearly differentiated products in the market place. This has enabled Mpd Productivity to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Mpd Productivity to invest into research and development (R&D) and innovation.
Innovation driven organization
– Mpd Productivity is one of the most innovative firm in sector. Manager in Hewlett-Packard: Manufacturing Productivity Division (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Mpd Productivity is one of the leading recruiters in the industry. Managers in the Hewlett-Packard: Manufacturing Productivity Division (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Mpd Productivity has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mpd Productivity has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Mpd Productivity has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Hewlett-Packard: Manufacturing Productivity Division (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Mpd Productivity has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hewlett-Packard: Manufacturing Productivity Division (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Mpd Productivity digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mpd Productivity has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Mpd Productivity
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mpd Productivity does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Mpd Productivity has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hewlett-Packard: Manufacturing Productivity Division (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Hewlett-Packard: Manufacturing Productivity Division (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hewlett-Packard: Manufacturing Productivity Division (A) are -
Slow to strategic competitive environment developments
– As Hewlett-Packard: Manufacturing Productivity Division (A) HBR case study mentions - Mpd Productivity takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Mpd Productivity products
– To increase the profitability and margins on the products, Mpd Productivity needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Benson P. Shapiro, Lawrence B. Levine suggests that, Mpd Productivity is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Mpd Productivity supply chain. Even after few cautionary changes mentioned in the HBR case study - Hewlett-Packard: Manufacturing Productivity Division (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mpd Productivity vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Mpd Productivity has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Mpd Productivity even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Mpd Productivity needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Mpd Productivity has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hewlett-Packard: Manufacturing Productivity Division (A), in the dynamic environment Mpd Productivity has struggled to respond to the nimble upstart competition. Mpd Productivity has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mpd Productivity 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Mpd Productivity, firm in the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Mpd Productivity has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hewlett-Packard: Manufacturing Productivity Division (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Hewlett-Packard: Manufacturing Productivity Division (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hewlett-Packard: Manufacturing Productivity Division (A) are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mpd Productivity to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Mpd Productivity to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mpd Productivity in the consumer business. Now Mpd Productivity can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mpd Productivity can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Mpd Productivity can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Mpd Productivity can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mpd Productivity can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Mpd Productivity has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Hewlett-Packard: Manufacturing Productivity Division (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mpd Productivity to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Mpd Productivity can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Mpd Productivity has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mpd Productivity is facing challenges because of the dominance of functional experts in the organization. Hewlett-Packard: Manufacturing Productivity Division (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Mpd Productivity can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hewlett-Packard: Manufacturing Productivity Division (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Mpd Productivity has opened avenues for new revenue streams for the organization in the industry. This can help Mpd Productivity to build a more holistic ecosystem as suggested in the Hewlett-Packard: Manufacturing Productivity Division (A) case study. Mpd Productivity can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mpd Productivity can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Hewlett-Packard: Manufacturing Productivity Division (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hewlett-Packard: Manufacturing Productivity Division (A), Mpd Productivity may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
High dependence on third party suppliers
– Mpd Productivity high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mpd Productivity can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hewlett-Packard: Manufacturing Productivity Division (A) .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Mpd Productivity can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Mpd Productivity needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Consumer confidence and its impact on Mpd Productivity demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mpd Productivity.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Mpd Productivity business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mpd Productivity in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mpd Productivity will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Mpd Productivity is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Hewlett-Packard: Manufacturing Productivity Division (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hewlett-Packard: Manufacturing Productivity Division (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hewlett-Packard: Manufacturing Productivity Division (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hewlett-Packard: Manufacturing Productivity Division (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mpd Productivity needs to make to build a sustainable competitive advantage.
