Hp External Analysis Essay Example

in plans or a new direction.

The external environment consists of various components with the first being the general environment which encompasses different societal dimensions that influence the industry and companies within it. This broader society is further categorized into six groups: demographic, economic, political and legal, socio-cultural, technological and global.

Market leaders such as Hewlett-Packard will find opportunities and threats in each aspect of the general environment. For example, demographic factors like population size, age structure, ethnic mix, income distribution, and geographic distribution can significantly impact Hewlett-Packard's strategic continuity.Hewlett-Packard, being the world's largest technology company, must carefully assess various factors before identifying markets that are optimal for selling its computer products. Market segments with unfavorable income distribution or an older age structure should be avoided until more favorable conditions arise. The economic category of the general environment comprises interest rates, gross domestic product, and business savings rates which impact Hewlett-Packard's continuity strategy just like demographics. The company can benefit from favorable economies while developing economies feature lower interest rates or beneficial business savings rates. However, shrinking economies may pose a threat to Hewlett-Packard as consumers may not prioritize buying expensive computers. The political and legal category includes antitrust, taxation, and labor laws which represent opportunities and threats for the firm since it produces an extensive range of computer products. Antitrust laws could pose enormous dangers to Hewlett-Packard but beneficial tax law modifications could save substantial money for the company. The socio-cultural category involves various factors such as workforce diversity, shifts in work and career preferences as well as changes in product and service preferences which also affect the company's operations.Hewlett-Packard recognizes the importance of monitoring and

planning for preference trends in the computer technology industry as it affects their business continuity. Failure to acknowledge new product preferences can pose a potential threat, whereas proper evaluation and integration present advantageous opportunities. The technological category within the general environment encompasses innovative products, advanced communication technologies, and government-funded research and development. This category holds significant importance for computer-based organizations such as Hewlett-Packard. Incorporating new product innovations may represent an opportunity for strategic continuity while failing to do so could threaten their future. Utilizing new communication technologies presents another advantageous opportunity by lowering long-term costs and streamlining operations. As a global entity, Hewlett-Packard must prepare itself for any changes or trends in critical markets, emerging industrialized countries, cultural and institutional attributes including maintaining its position in vital markets like North America, India, and China while identifying developing industrial countries to capitalize on strategic opportunities they present.The external environment of a firm has two components, one of which is the industry environment. An industry is composed of firms that manufacture alternative products to those produced by a particular firm. The industry environment consists of five factors that directly influence competitive actions and responses: the power of suppliers, buyers, product substitutes, rivalry intensity among competitors, and threat from new entrants. New entrants pose a significant threat to existing firms as they compete for market share. Two forces determine how easily new firms can enter an industry: barriers to entry and expected industry retaliation. Hewlett-Packard operates in the computer manufacturing industry where high startup capital costs and existing cost disadvantages like product patents held by existing firms are major barriers to entry. Bargaining power with suppliers is another

factor that limits competition in this industry because suppliers control prices and quality while influencing competing firms in the same field. Hewlett-Packard benefits from strategic continuity due to these limiting factors on competition in its specific segment of the technology sector.

Hewlett-Packard has a relatively high level of supplier bargaining power in the technology industry due to low competition and high demand. This provides crucial opportunities for their strategic business continuity. Buyers in the computer industry have medium bargaining power and seek high quality at low cost, impacting Hewlett-Packard's competitiveness. However, there are few substitutes for computers, minimizing competitor planning and positively affecting Hewlett-Packard's business continuity. Despite this advantage, intense rivalry exists among competitors such as Dell, IBM, Oracle, and EMC who monitor each other closely for potential threats to strategic continuity. The external environment comprises of these direct competitors in the market.In order to evaluate their competition, firms take into account factors such as their future objectives, current strategy, assumptions about the industry, and strengths and weaknesses. Hewlett-Packard faces strong competition from peers like Dell, despite having a limited number of direct competitors. Dell's focus on expanding market share is a significant threat to HP. To sustain their business continuity plan in the face of intense competition, Hewlett-Packard must incorporate Dell's aggressive strategies into their own strategic plan. When collecting data on Dell for competitor analysis purposes, it is crucial that Hewlett-Packard maintains legal and ethical boundaries. Common methods of data collection include accessing publicly available information or attending trade fairs and shows to view exhibits or listen to product discussions - however these can present ethical concerns. Therefore caution is necessary to avoid

damaging HP's reputation.To maintain an effective strategic business continuity plan it is important for successful companies like Hewlett-Packard to continuously analyze the external environment through scanning, monitoring forecasting and evaluating the general industry and competitor environments.