Hewlett Packard Computers-Marketing Case Study

Case Study: Hewlett-Packard

  1.

      Problem Definition
        1.

            Primary Business – Technology Firm
              1.

                  Imaging and Printing Group (IPG)
                    1.

                        Products: Printers and inks
                    2.

                        Revenue: 30% of total
              2.

                  Personal Systems Group (PSG)
                    1.

                        Products: Desktop PCs, notebooks, servers, flat-screen TVs
                    2.

                        Revenue: 29% of total
              3.

                  Technology Solutions Group (TSG)
                    1.

                        Technology and IT services for B2B segment
                    2.

                        Revenue: 37.5% of total
        2.

            Main Issue – HP is struggling to decide whether to continue selling PCs, a large revenue generator with consistently small and diminishing margins. Along with this decision, the firm is also wrestling with how to price the PCs in the market amidst strong competition from Dell and IBM.
              1.

                  PCs are central to HP’s strategy to maintain their position as a complete technology provider to both the B2B and B2C segments.
              2.

                  Through testing the market, HP has found that the demand for PCs are elastic to price. Increased prices resulted in loss of revenue but increase in margins. Whereas a decrease in prices improved market share, but saw margin erosion.
  2.

      Objectives
        1.

            Decide whether to keep PCs are part of product portfolio.
        2.

            Decide how to price PCs if decided to keep as part of portfolio.
  3.

      Situation Analysis
        1. The Market
              1. Size: In 2003, the global PC market was estimated at USD 170 billion.   Estimated to grow at 11.4%, the... [continues]

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