Hewlett Packard started in 1939 in a garage by two people, Bill Hewlett andDavid Packard with just $538 of working capital. After a string of failures,their company’s first successful product, an audio oscillator better thananything on the market, earned a U. S. patent and an order from Disney Studiosfor eight units to help produce the animated film Fantasia. From 1940 to 1950they moved from their garage to a rented building on Page Mill Road in Palo Altoand then constructed their first HP-owned building that was 10,000 square foot.
In 1957, HP had their first public stock offering November 6, 1957 and netrevenues were $30 million with 1,778 employees and 373 products. In the1960’s, HP was listed on the New York and Pacific exchanges as HWP and had itsfirst listing on Fortune magazine as of one of the 500 U. S. companies. HP in1967 started operations in Boeblingen, Germany introducing a non-invasive fetalheart monitor that helps babies by detecting fetal distress during labor.
In the1970’s revenues increased to $365 million with over 16,000 employees. ( HP. com) In the 1980’s revenues again increased to $6. 5 billion with over 85,000employees.
They introduced their first personal computer, the HP-85 andintroduced HP LaserJet printers, the company’s most successful single productever considered a standard for laser printing today. HP moves to the top 50 onFortune 500 listing – 1 – at No. 49. Finally in the 1990’s, HP opens researchfacilities in Tokyo, Japan with net revenues of $13. 2 billion and over 91,000employees.
( HP. com ) HP also introduced portable computers that lasted onbatteries that would last a flight across the U. S. All these products moved HPto the No. 2 position in the U. S.
market. Today HP has ballooned into amultinational company with 104 divisions, 123,000 employees worldwide, 19,000products and sales over $47 billion. ( HP. com ) Great products ultimately comefrom the minds of motivated and capable employees, the second key to HP’ssuccess.
After the Second World War, the company began to hire talented engineerand scientist that were no longer working in the war that were from othertechnology companies and government funded labs. These were high pricedexperienced workers that helped HP’s development of different successfulproducts. ( personal Journal ) The company structure looks like a pyramid. Atthe top are the board of directors followed by President and Vice President. There are Presidents and Vice Presidents in different divisions of the company.
Finally, there are general managers, middle managers, lower managers andemployees. Hewlett Packard’s Mission statement is to improve the waysindividuals and organizations around the world create, access, use andcommunicate information on the road or from the desktop, in the office and inthe home. HP is a worldwide leader in personal computing; setting new standardsin such areas – 2- as Mobil computing network management, 3-D graphics andinformation storage. Computer products include eight manufacturing divisions inNorth America, Europe and Asia, with sales and support in more than 110countries.
These divisions are separated in Mobile Computer Division, BusinessDesktop Division, Home Products Division, Asia Pacific PC Division, WorkstationSystems Division and information storage group. ( Information Week ) Asexplained above HP global market place allows the company to expand in differentcountries and people in two ways. First HP. com allows virtually anyone withInternet access to log on under the URL and actually order online. One problemthat some companies are having is that 65% of the Internet cites are only inEnglish.
( www. firstsearch. com ) On Hewlett Packard’s website you only need tochoose the country that you live in and the pages will translate the text intothat language. There is product information about you future or presentpurchases, software updates of the product, and also technical support throughemail. Finally HP has 24 hours a day 7 days a week of customer supportthroughout the countries that have operators to assist you on the product. People are more willing to buy products and services from a manufacture that canprovide both the support and the opportunity to buy easily from Hewlett Packard,and HP provides this! One example is that Dell a online company that buildcomputer as they are order from the customers and the business offer one of thebest support and – 3 – warranties in the computer industry.
HP is followingtheir online strategy closely to Dell’s way of operating the sales andcustomers. As this company expands in growth it leaves other smaller companiesbehind that can’t compete with this computer giant. These smaller companieshave trouble to match HP’s prices and customer support. One example of this isa local owned family shops in a country that are not able to compete with theytype of products and services offered by HP and these companies either have tostop selling or move away from the competition. With communication andtechnology growth, it will be easier to climb the cultural boundaries that othercompanies had trouble overcoming in the past.
This would be in having othercountries buying an American made product. The Internet is helping in crossingthose boundaries by offering global support and products. With the support andproducts offered by HP, other companies may have troubles trying to match oroutperform. This leads to closing down of shops and other smaller retailer thatcan affect jobs in that country.
People of other diversities may have problemaccepting these changes and may not want to make the change. The oldergeneration that is not ready or unable to use computers may have troublesadapting to buying over the Internet. Another problem is not all people fromother countries are financially able to pay for a computer like people in theU. S. This could be another problem that HP is not yet ready to overcome.
Eventually as time goes on technology will be – 4 – available to all and theseproblems might be solved but new problems will replace the old and there will beother obstacles to avoid. Hewlett Packard’s Response to a Globalizing EconomyHP now has a strong commitment to women’s advancement. One prime example of thiswould be its biannual Technical and Women’s Conference, which last year broughttogether 2,000 female HP scientists, engineers, professionals and managers from26 states and 12 countries, in order to discuss business issues, especially asthey relate to gender. HP picked up the tab for employee travel expenses, too. Work and family issues remain on the front burner as well.
Last year the companywas listed as an ABC Champion, leading to the funding of 25 child and elder careprojects in HP communities. The other news here is the ongoing redesign of workschedules to provide more flexibility. Managers have been trained to bereceptive to these needs while employees have been encouraged to try newoptions. As a result, HP has some big numbers to show for its efforts.
Nearly3,000 people work at a “virtual office”; 500 share jobs and 1,450employees are on compressed workweeks. HP announced on February 28, 2000 that itwould be supplying computers for its “Wired Workforce” program in whichcomputers are made available for all Delta Air Lines employees at a substantialdiscount through PeoplePC. – 5 – The Wired Workforce program was announcedFebruary 4 in a joint presentation with PeoplePC. The San Francisco basedcompany will be responsible for order fulfillment and technical support for theprogram.
Over the next few months, Delta Technology and PeoplePC will workclosely to test all aspects of the program, including secure access to theairline’s intranet. HP will provide multiple configurations from its HP Paviliondesktop line, the No. 1 selling retail PC. HP is moving rapidly forward withimplementation of their ‘Wired Workforce’ program and look forward to theadvantages their people will gain. In 1997, the HP established a dedicated taskforce to address the issues raised by the introduction of a European singlecurrency (the Euro) for early performance as of January 1, 1999 and during thetransition period through January 1, 2002.
HP’s primary focus has been on thechanges needed to deal with a mix of Euro and local denomination transactionsfrom the first day of changeover – January 1, 1999. Since the beginning of thetransition period, product prices in local currencies are being converted toEuros as required. At an appropriate point during the transition period, productprices in participating – 6 – countries will be established and stored in Euros,and converted to local denominations. System changes were implemented to givemulti-currency capability to the few internal applications that did not have ityet, or to ensure that external partners facing systems processing euroconversions be compliant with the European council regulations. ( AdvertisingAge ) The HP has developed plans to support display and printing of the Eurocharacter by impacted products.
Most products are currently able to do thesefunctions while plans are still in process for a few remaining products. HP doesnot presently expect that introduction and use of the Euro will materiallyaffect the Company’s foreign exchange and escaping activities or the Company’suse of derivative instruments. HP management does not expect that theintroduction of the Euro will result in any material increase in costs to theCompany and all costs associated with the introduction of the Euro will beexpensed to operations as incurred. While the HP will continue to evaluate theimpact of the Euro introduction over time, based on currently availableinformation, management does not believe that the introduction of the Eurocurrency will have a material adverse impact on the HP’s financial condition oroverall trends in results of operations. – 7 – Hewlett Packard’s Response to aGlobalizing Political Environment Economic, political and other risks associatedwith international sales and operations, particularly in Korea and Japan, couldnegatively affect HP sales. They sell products worldwide, their business issubject to risks associated with doing business internationally.
HP’s netrevenue originating outside the United States, as a percentage of our total netrevenue, was 54. 4% in fiscal year 1998 and 54. 9% for the nine months ended July31, 1999. They predict that revenue from international operations will continueto represent a large portion of our total revenue. In addition, many of theirmanufacturing facilities and suppliers are located outside the United States.
HPdoes a substantial portion of their business in Korea and Japan, which have beensubject to increased economic instability in recent years. Their business hasdeclined in 1998 when Korea and Japan experienced economic difficulties. Thereturn of weakness in these economies or weakness in other internationaleconomies could and may have a significant negative effect on HP’s futureoperating results. HP is dealing with various rules and regulations, inparticular is its compliance with the Food and Drug Administration regardingregulations on a wide variety of product activities from design and developmentto labeling, manufacturing, promotion, sales and distribution.
– 8 – The medicaldevice products produced by Hip’s healthcare solutions business are subject tothose standards given by the United States Food and Drug Administration (FDA)and similar international agencies. HP has received a warning letter from theFDA in 1996 alleging non-compliance with the FDA’s quality system regulations atone of our facilities. The FDA’s quality systems regulation includes elaboratedesign, testing, control, documentation and other quality assurancerequirements. HP had to apply considerable resources to address the FDA’sconcerns. HP has resolved the issues identified in the FDA’s letter and the FDAis satisfied with our assessment If HP fails to keep up acceptable compliancewith the FDA’s quality system and other regulations, HP will be forced to recallproducts and cease their manufacture and distribution. ( Hoovers.
com ) TheGlobal Industry The worldwide personal computer industry grew 21 percent lastyear, led by strong demand in the United States. Increasing affordability of PCsand the growing demand to get ” online “, the percentage of U. S. homes withPCs advanced from 38. 5% in 1995 to 52.
7% in 1999. As a computer Industry as a -9 – whole had to compete for DRAM in late 1999 because of the Taiwan earthquake. Prices doubled 100% in August and then again in September. This suspended thedemand in PCs during the holiday season. In entry-level computer HP was againbehind IBM with 12% of market share compared to IBM’s 21%. HP has gainedmarket share in the midrange PCs with 21% compared to IBM’s 23%.
( Standard& Poors ) HP grew in market share during the end of 1999 from 6. 2% to 8. 4%. HP’s growth rate worldwide is 39. 6%, which is the second fastest growth ratebehind Dell computer.
In revenues HP is 2nd behind IBM with $47 billion and 2ndagain in net income behind IBM with $2. 9 billion. Under operating profit marginsHP ranked 6th with 8. 16%and with return in capital of 15. 51% also 6th in theindustry. ( Moody’s Industry Review ) One thing that HP does lack in is incomputer sales in other countries outside of the U.
S. , like Canada where theyare not even ranked in the top 5. Globally HP leads the printer market withtheir HP inkjet printers and is gaining market share in the PCs. HP is growingrapidly into the worldwide market and is growing at a faster rate than beforebecause of the global access offered to business and customers over theInternet.
– 10 -BibliographyGlobal Computer Industry, New York Times, New York; Jan 29, 1999; LateEdition; pg. C. 18 Hoovers Online Business Network; computer industry analysis;hoovers. com Tobi Elkin; Advertising Age, Chicago; Jan 31, 2000; Vol.
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