SOS: Hewlett-Packard’s Sinking Ship

On the Businessweek website, there is a blog post explaining the downward spiral of Hewlett-Packard. The blog begins by explaining that the company’s CEO, who happens to be the fourth in the past seven years, announced that shares recently dropped to a nineyear low and that the company’s 2013 profits are more than likely to miss the estimates previously made. The company has been in a state of decline for the past twelve. The company will make facility consolidations and large layoffs worldwide.

The author of the blog, Judith Hurwitz, predicts that Hewlett-Packard will have no choice but to become a holding company or break up into pieces and sell. Ideally the company would turn around by creating new innovative products since the company was built on the idea innovation when it first began and it succeeded quite well for a time in the market of technology. A turnaround through the creation of new products would help them attempt to keep up with such companies as Apple, although those chances appear slim to none at this point especially since the company is in the red to the amount of 30 billion dollars. With that amount of debt, options become limited. Any manufacturing company faces large costs involved with creating new products from design to production and testing, similar to our Deming cycle or PDSA. Hewlett-Packard would have to create products that can compete with or surpass those already on the market and then improve upon them as time passes. With Apple creating new products or improved models regularly and a loyal customer base, I do not think Hewlett-Packard stands much of a chance at a turnaround especially since they only specialize in hardware in the form of computers and printers.

Early on in the company’s life they proved to be a contender in the computer market, I myself have had several of their products over the years. However, as we have seen with many well-known and well-off companies, the ship is starting to sink. I believe many factors have gone into their current downfall such as a fast paced market that is constantly changing, changing consumer demands, and the success of Apple. This only makes me wonder if Apple will one day face the same fate. I am sure Hewlett-Packard, or any other company for that matter, never thought they would be in such a position. Had they branched out in the form of products such as phones or software, perhaps they would be better off today; or maybe such things will be what saves them. Perhaps they have attempted to make incremental improvements to both their products and business strategies over the years that have not proved to be greatly beneficial in the long run; maybe what they really need is a breakthrough.

Do you think Hewlett-Packard will be in business much longer? What are some ways they can stay in business?

Do content and warning labels influence quality?

There is a blog entry on Businessweek’s website entitled “McDonald’s Enters the Age of Transparency.” It explains that starting this week McDonald’s will begin to post the calorie content of their food on the menu boards in each establishment. This is two years prior to a federal regulation, stemming from President Obama’s health care reform, requiring all restaurants to do so on their menus. The article goes on to explain that McDonald’s has done this prior to the regulation because it is something their customers want and it shows that they are not trying to hide anything, which the entry calls transparency, making them a responsible, trustworthy and respectable company. Many people are becoming more health conscious and are starting to count calories or eliminate certain foods and/or ingredients from their diet as they become more aware of what constitutes a healthy diet.

Awareness is not only becoming important in foods but in products as well. The driving force behind this article is the fact that people want to know exactly what is included in the items they purchase as we are not only becoming a health aware society, but an ecological one too. Whether you consider it a trend or rising worry over global warming and oil prices, one thing is certain–people are being more attentive and frugal. The frugality may, and probably is, a result of our current economy both countrywide and worldwide; on the other hand the idea of worth or quality in a product may also play a key role. As we have learned in class, quality is one of the main factors in determining whether or not someone purchases something. The only problem is how do you define quality? The definition is different to everyone. For some it may be reputable brand, others may judge on materials, appearance and price. This is why companies must do extensive research in designing and developing their products to ensure they meet the customer’s wants and needs as closely as possible as demonstrated in our paper plane project.

While this transparency provides the customer with a clear picture of what is included in their purchases and the company with the possibility of greater profits, if they truly took customer opinion to heart. Looking deeper another benefit of transparency to a company is helping to reduce any liability issues if eventually sued. Cigarette and alcohol companies serve as the best examples since they are required to disclose the risks of using their merchandise in the form of Surgeon General Warnings. Toy companies also serve as a good example; they are required to state choking hazards on their products. The reducing liability aspect may be seen by some as a way of the company protecting itself, suggesting unsafe products or poor craftsmanship and possibly low quality. It all depends on the customer’s way of thinking showing that the customer truly leads the market.

What do you think?