Submitted to Mrs. Indrish KAUR
Introduction to Industry
Each business operates under a group of firms that produce competing products or services known as an “industry”. An industry is thus a group of firms producing similar products or services. By similar products we mean products that consumer perceive to be substitutes for one another. Eg. Firms that produce PC’s such as apple, HP, IBM, Wipro, HCL, Although there are usually some differences among the competitors, each industry has its own set of “rules of combat” governing such issues as product quality, pricing and distribution. This is especially true in industries that contain a large number of firms offering standardized products or services. As such, it is important for strategic managers to understand the structure of the industry in which their firms operate before deciding how to compete successfully. Industry analysis is therefore a critical step in the strategic analysis of firm. In a perfect world, each firm would operate in one clearly defined industry. However, many firms compete in multiple industries, and strategic managers in similar firms often differ in their conceptualization of the industry environment. The concept of primary and secondary industries may be useful in defining an industry. A primary industry may be considered as a group of close competitors, whereas a secondary industry includes less direct competitors. The basic purpose of industry analysis is to assess the strengths and weaknesses of a firm relative to its competitors in the industry. It tries to highlight the structural realities of particular extent of competition within that industry. Through industry analysis an organization can find whether the chosen field is attractive or not and assess its own position within the industry.
“Computer industry is a collective term used to describe the whole range of businesses involved in developing computer software, designing computer hardware and computer networking infrastructures, the manufacture of computer components and the provision of information technology services.”
INTRODUCTION TO HP
Hewlett Packard External Environment Analysis In today’s constantly evolving business world, it is essential for organizations to fully master and incorporate strategic management theory into decision making processes. As the world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services, and IT infrastructure to solve customer problems (Hewlett Packard, 2010). “HP is well positioned to outperform the market. The strength of HP’s portfolio is leaner cost structure and accelerating market momentum that gives the confidence to raise the full year outlook (Hurd, 2010)”. One of the most important aspects of Hewlett Packard’s strategy building is an analysis of the
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external business environment that they operate in. As pointed out in the text Strategic Management. Concepts and Cases Competitiveness and Globalization, “The firm’s understanding of the external environment is matched with knowledge about its internal environment to form its vision, to develop its mission, and to identify and implement actions that result in strategic competitiveness and above-average returns.” (Hitt, Ireland, and Hoskisson, 2009) In this paper, there will be an analysis of Hewlett Packard’s external business environment and its impact on the firm’s strategic business continuity plan, including examination of the three components of the external environment, the general environment, the industry environment, and the competitor environment. External Environmental Analysis
Before analyzing Hewlett Packard’s external influences, it is important to highlight the specific processes in an external environmental analysis. This analysis is performed so that firms...