HP and Compaq Combined: In Search of Scale and Scope SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of HP and Compaq Combined: In Search of Scale and Scope
Describes the strategic analysis that went into identifying Compaq as an acquisition target to help HP achieve its objective of becoming the leading technology company in the world. Through in-depth interviews with HP senior executives, including chairman and CEO Carly Fiorina and others, the case describes the planning and execution of the merger and the actual processes created to achieve the strategic, administrative, and cultural integration of the two companies.
Swot Analysis of "HP and Compaq Combined: In Search of Scale and Scope" written by Robert A. Burgelman, Philip Meza includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hp Compaq facing as an external strategic factors. Some of the topics covered in HP and Compaq Combined: In Search of Scale and Scope case study are - Strategic Management Strategies, Mergers & acquisitions, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the HP and Compaq Combined: In Search of Scale and Scope casestudy better are - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is backlash against globalization, wage bills are increasing, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
technology disruption, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of HP and Compaq Combined: In Search of Scale and Scope
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in HP and Compaq Combined: In Search of Scale and Scope case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hp Compaq, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hp Compaq 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 HP and Compaq Combined: In Search of Scale and Scope can be done for the following purposes –
1. Strategic planning using facts provided in HP and Compaq Combined: In Search of Scale and Scope case study
2. Improving business portfolio management of Hp Compaq
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hp Compaq
Strengths HP and Compaq Combined: In Search of Scale and Scope | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hp Compaq in HP and Compaq Combined: In Search of Scale and Scope Harvard Business Review case study are -
Highly skilled collaborators
– Hp Compaq 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 HP and Compaq Combined: In Search of Scale and Scope HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Hp Compaq 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.
Training and development
– Hp Compaq has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in HP and Compaq Combined: In Search of Scale and Scope 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hp Compaq digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hp Compaq 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.
Low bargaining power of suppliers
– Suppliers of Hp Compaq in the sector have low bargaining power. HP and Compaq Combined: In Search of Scale and Scope has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hp Compaq to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Hp Compaq is one of the leading recruiters in the industry. Managers in the HP and Compaq Combined: In Search of Scale and Scope are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Hp Compaq
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hp Compaq does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Hp Compaq in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Strategy & Execution field
– Hp Compaq is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Hp Compaq in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Hp Compaq is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Hp Compaq has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Hp Compaq is one of the most innovative firm in sector. Manager in HP and Compaq Combined: In Search of Scale and Scope Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses HP and Compaq Combined: In Search of Scale and Scope | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HP and Compaq Combined: In Search of Scale and Scope are -
Capital Spending Reduction
– Even during the low interest decade, Hp Compaq 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.
Aligning sales with marketing
– It come across in the case study HP and Compaq Combined: In Search of Scale and Scope that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case HP and Compaq Combined: In Search of Scale and Scope can leverage the sales team experience to cultivate customer relationships as Hp Compaq is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study HP and Compaq Combined: In Search of Scale and Scope, it seems that the employees of Hp Compaq 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.
Slow decision making process
– As mentioned earlier in the report, Hp Compaq 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. Hp Compaq 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the HP and Compaq Combined: In Search of Scale and Scope HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Hp Compaq has relatively successful track record of launching new products.
High cash cycle compare to competitors
Hp Compaq 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study HP and Compaq Combined: In Search of Scale and Scope, is just above the industry average. Hp Compaq 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.
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 Hp Compaq supply chain. Even after few cautionary changes mentioned in the HBR case study - HP and Compaq Combined: In Search of Scale and Scope, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hp Compaq vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert A. Burgelman, Philip Meza suggests that, Hp Compaq 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.
Need for greater diversity
– Hp Compaq has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Hp Compaq, firm in the HBR case study HP and Compaq Combined: In Search of Scale and Scope needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities HP and Compaq Combined: In Search of Scale and Scope | 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 HP and Compaq Combined: In Search of Scale and Scope are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hp Compaq is facing challenges because of the dominance of functional experts in the organization. HP and Compaq Combined: In Search of Scale and Scope 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hp Compaq to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hp Compaq to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Hp Compaq can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Hp Compaq can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. HP and Compaq Combined: In Search of Scale and Scope 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hp Compaq can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Hp Compaq 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 Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hp Compaq in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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 Hp Compaq 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hp Compaq can use these opportunities to build new business models that can help the communities that Hp Compaq operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Hp Compaq can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Hp Compaq can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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 Hp Compaq in the consumer business. Now Hp Compaq can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Hp Compaq 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 HP and Compaq Combined: In Search of Scale and Scope - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hp Compaq to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats HP and Compaq Combined: In Search of Scale and Scope External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study HP and Compaq Combined: In Search of Scale and Scope are -
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.
Environmental challenges
– Hp Compaq needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Hp Compaq can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Hp Compaq needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Hp Compaq.
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.
Technology acceleration in Forth Industrial Revolution
– Hp Compaq has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Hp Compaq needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Hp Compaq 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study HP and Compaq Combined: In Search of Scale and Scope, Hp Compaq may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hp Compaq 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 HP and Compaq Combined: In Search of Scale and Scope .
Consumer confidence and its impact on Hp Compaq 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hp Compaq can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hp Compaq in the Strategy & Execution industry. The Strategy & Execution 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.
Shortening product life cycle
– it is one of the major threat that Hp Compaq is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of HP and Compaq Combined: In Search of Scale and Scope 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 HP and Compaq Combined: In Search of Scale and Scope 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 HP and Compaq Combined: In Search of Scale and Scope 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 HP and Compaq Combined: In Search of Scale and Scope 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 HP and Compaq Combined: In Search of Scale and Scope 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 Hp Compaq needs to make to build a sustainable competitive advantage.