Upenn Eas 545 Hp and 4 Requirements

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Peter Drucker’s 4 requirements for entrepreneurial management are: first, a new venture must focus on the market; second, it must has financial foresight and especially planning for cash flow and capital needs ahead; third, it requires a top management team built long before it actually needs one and long before it can actually afford one; forth, it requires the founding entrepreneur a decision in respect to his or her own role of work and relationships.

All 4 requirements pertain to the early success of Hewlett and Packard.

First, HP maintained its focus on the market. During the World War II, HP’s strategy of only focus on “building a group of complementary products rather than becoming involved in a lot of un related things” reduced the damage to the company after the war ends. Otherwise, it may not survive when facing a 50 percent decline in revenue. Meanwhile, as a high-tech venture focus on innovation products, HP's design engineers find the needs of customer by determining whether the product met the needs of fellow engineer sitting at the next bench within the company rather than depending on market research. It helped HP understand its market’s needs and was a successful approach in HP’s early day.

Second, HP’s financial foresight secured the stable of the company. Even in the very moment that company barely pays its employee’s salary, HP refused to accept long term debts so that in the end of the day, Hewlett and Packard still “own” the company rather than become employee of the bank that give them debt. Meanwhile, not like its competitor Texas Instruments, HP maintained a control of its grow. It didn’t make the increase of its profit as the first priority. Instead, it conservatively re-invested its new product development. It only makes product really makes contributions that is the product of a new market where no dominant company was there before them. As a result, the financial situation of the company is respective stable which ensured...
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