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 - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, technology disruption, increasing commodity prices,
there is increasing trade war between United States & China, increasing transportation and logistics costs, 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 -
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Mpd Productivity are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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.
Strong track record of project management
– Mpd Productivity is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Mpd Productivity is present in almost all the verticals within the industry. This has provided firm in Hewlett-Packard: Manufacturing Productivity Division (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Mpd Productivity in the sector have low bargaining power. Hewlett-Packard: Manufacturing Productivity Division (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mpd Productivity to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Mpd Productivity has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Mpd Productivity has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
No frontier risks strategy
– After analyzing the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A), it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A), it seems that the employees of Mpd Productivity don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hewlett-Packard: Manufacturing Productivity Division (A), is just above the industry average. Mpd Productivity needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 -
Manufacturing automation
– Mpd Productivity can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mpd Productivity can use these opportunities to build new business models that can help the communities that Mpd Productivity operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mpd Productivity can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Hewlett-Packard: Manufacturing Productivity Division (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Mpd Productivity can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mpd Productivity in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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.
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 -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mpd Productivity can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mpd Productivity needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mpd Productivity with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing wage structure of Mpd Productivity
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mpd Productivity.
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.
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.
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.
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) .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mpd Productivity in the Sales & Marketing sector and impact the bottomline of the organization.
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 .
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.
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.