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2003 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without
HP and Lenovo
Puneet Mishra (PGSF1118)Nilanshu PandeyShilpi Rani
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Introduction
India has built up valuable brand equity over the years contribution to the GDP has increased by from 0.6% in 1994-95 to 4.3% in
2004-05
Revenue is expected to increase from Rs. 1276 billion in 2004-05 to Rs. 6435billion in 2010-11
ITES-BPO is emerging as the fastest growing segment
page 2HP SharePoint activities overview
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Services and Software vs. Hardware
Hardware counterpart is more robust then the services and software segment India is able to offer a 24x7 service
IT industry generated revenue of US $ 5.7 billion in 2004-05, representing agrowth of 46% over the previous year
90% of the revenue is generated through export
India does perform numerous hardware assembly tasks internally,
Almost entirely for the domestic market.
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Major Players in IT industry
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Indian IT-BPO Industry
Indian IT-BPO industry revenues cross the USD 100billion mark, exports at USD 69 billion
Increase its market share from 51 per cent in 2009,
to 58 per cent in 2011
Software and services revenues nearly 87 per cent
of the total industry revenues,
estimated growth of about 14.9 per cent over FY2011
The industry expected to add 230,000 jobs in FY2012
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Pest analysis of HP
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Political
Private ownership is the dominant market system in the India
The government plays a significant role to the countrys economy including thebusiness sector.
One of the important roles of the government in business is the developmentand enforcement of various business-related laws.
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Economical
Factors affecting IT industry ranging from rising working pay, global recession,competition
Currency fluctuations caused by the devaluation of the dollar has affected the
industry during the last global recession Indias global IT spending yet to decline due to entry of new IS companies
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Socio-Cultural
The population of the country is considered as the second most populated
country in the world. In addition to size, the Indian is said to be a masculinesociety.
The rise of immigrant workers suggests the growing working sector of thecountry, which increases the need for computers and technology.
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PEST Analysis of Lenovo
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Political
Government Stability Environmental Protection Laws
Special Incentives
Attitude Towards Foreign Companies
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Economical
GDP Trends Inflation Rate
Employment Generation
Pricing Strategy
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Socio-cultural
Changing Lifestyles Career Expectations
Consumer Activism
Growth Rate of Population
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Technological
Industry Spending on R & D
Cutting-edge Technologies
Transfer Rate of Technology
Patent Protection
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SWOT ANALYSIS of HP
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STRENGTHS
Innovation Size and scale:
Synergy among business units
Competitive Advantages in the Personal SystemsGroup
Services:
Enterprise Servers, Storage, and Networking
HP software
Product manufacturing
Brand name
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Weaknesses
Acquisitions
Some supply chain dependencies:
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Opportunities
The Imaging and Printing Group
Supply Chain Management
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Competitive analysis
Michael Porters Five Forces- Threat of New Entry, Buyer Power, SupplierPower, Threat of Substitutes, and Internal Competition
Hewlett-Packard simply because six separate business units
these business units have high profit margins, high growth rates, or both
The real focus should be on HPs Personal Systems Group (PSG) division,which presents the greatest challenge in its declining revenues and decreasing
margins HPs strategy should include all of its divisions
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Swot analysis of Lenovo
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Core competency of HP
Broad portfolio of products and services,
Innovation technology,
research and development capabilities
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Core competency
Broad portfolio of products andservices,
Innovation technology,
research and developmentcapabilities
Lenovos core competencies aredeveloping, manufacturing andmarketing desktop and notebook
personal computers, workstations,servers, storage drives
Lenovos business model is built oninnovation, operational efficiency, andcustomer satisfaction
LENOVO HP
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PORTERS Model of Lenovo
Threatof New Entrants
Wipro.
Samsung. Chirag.
Threat of Substitute Products
Verbal communication, Video recording. Handwritten, Telephone.
Communication , Conferencing machine,Typewriter. Camera, Windowsmobile.Sound Systems.
Suppliers
Intel(Micro-processor) Microsoft (OS)
Buyers
BigCorporates
GovernmentOffices Educational Institutes BPOs
IndividualCustomers
CompetitiveRivalries
HCL, Toshiba , HP, Zenith, Compaq, Sahara Dell, etc
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Porters Five Forces of HP
Threat of New Entrants Moderately high Asian competitors, especially China, using learning curve and local market expertise to move up
the value chain Few opportunities for product differentiation or absolute cost advantage Bargaining Power of Suppliers Extremely high with respect to Wintel! Wintel dominance enables them to extract enormous rents from PC value chain
Customers demand compatibility, enabling Wintel standard to remain entrenched Intensity of Rivalry Extremely high! Wintel standard removes opportunities for product differentiation Excess capacity leads to severe price competition Bargaining Power of Buyers Low switching costs
Role of distribution and inventory management and retail shelf space very important in certainsegments
Threat of Substitutes Currently low but growing PDAs/smartphones increasing functionality Proprietary/alternative platforms
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Recommendation
Improve the operatingefficiency of the PC
business, then spin itoff.
Dont abandon thehandheld market.
Focus the product lineon notebooks and
discontinue desktops. Change the company
name to ThinkPad.
Focus on battery life as
the company's keydifferentiator
LENOVO HP
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2003 Hewlett-Packard Development Company, L.P.
Thank You