Hewlett Packard’s main sources of competitive advantage.
HP - A Brief Introduction:
Hewlett Packard (HP) is a leading U.S. based manufacturer of computing and printing products that sells a large range of personal computers, laptops, printers, and peripherals. Founded by William Hewlett and David Packard (both electrical engineering graduates from Stanford University) in 1939, the company divided itself into HP and HPE in 2015. The two separate divisions focus on their exclusive business fields and HP retains its focus upon PCs and printers while HPE on cloud-based enterprise solutions. HP’s market-leading position and global growth have resulted from its consistent focus on product design, quality, and technological innovation. HP has managed stronger growth in recent years in the face of higher competition from rivals like Dell, Lenovo, Acer, and Asus. However, a strong business model and a diversified product portfolio have helped HP retain its growth momentum. The rise of mobile computing has come as a blow to the PC makers who are heavily relying upon product and design innovation for superior growth. HP makes and sells a large range of computing and printing solutions complemented by a wide range of cloud-based enterprise solutions from HPE. HP’s strong position is based on its sustainable competitive advantage which arises from several sources. Take a look at the various sources of HP’s competitive advantage and how they are helping the global PC brand find higher growth in an intensely competitive scenario.
HP’s sources of competitive advantage and how each one supports growth in the international market?
The following are the leading sources of Hewlett Packard’s competitive advantage in the computing and printing industry which have helped the company sustain its growth momentum in a fiercely competitive business environment.
Brand Equity :
HP’s brand equity is one of the leading sources of competitive advantage for the brand. As a leading computing brand, the company enjoys strong brand recognition and social image. Brand equity is among the leading drivers of sales and revenue for the computing brands. HP is one of the leading computing brands that customers trust. It has established itself as one of the most reliable computing brands. Apart from its focus on technological innovation, the company is also renowned for quality products as well as offering distinct and superior customer experience.
Technological Innovation :
Technological innovation is also one of the key drivers of performance for computing businesses. HP is one of the leading computing brands enjoying a large share in the laptop and PC industry. As of October 2019, the worldwide patent portfolio of HP included more than 27,000 patents. There was slight growth in HP’s research and development activities in 2019 as compared to 2018. The company spent $1.5 billion on research and development compared to $1.4 billion in 2018. Apart from changing consumers’ needs and preferences, emerging trends also affect people’s choice of products. As such it is important for HP to continuously anticipate changing demand patterns and market dynamics. HP has established a culture that focuses on technological innovation. This is a driver of faster growth as well as a source of competitive advantage for the brand.
Large Product Range Augmented by HPE’s :
HP has introduced a large product range to the market in order to cater to the varying tastes and preferences of the customers worldwide. Apart from the varying capabilities, these products are also available within varying price ranges. In this way, the company serves a large customer base from all around the world. The large product range of HP is also complemented by the products introduced by HPE. HP spun off HPE in 2015. HPE has brought a large range of cloud computing services and solutions to the market. While the two divisions operate separately, they have together introduced a large range of products that serve the computing needs of a wide variety of consumers including individuals and businesses.
Strong Leadership :
Strong leadership is also a driver of a competitive advantage which has been proved in the case of many brands including Apple, Starbucks, Microsoft, Google as well as Hewlett Packard. HP was founded by Bill Hewlett and David Packard in a car garage in Palo Alto, California. The company was led by visionary leaders and its strong foundation is still a source of competitive advantage for the brand. However, even years later than its foundation, the company’s leadership is among the central pillars of its business performance. Enrique Lores is currently the president and CEO of Hewlett Packard.
Improved Customer Experience:
Customer experience is also a major driver of popularity and sales in the computing industry. As competition has kept rising in the industry, brands are focusing more than ever on customer experience in all aspects of the business including sales and marketing as well as after-sales service. HP also places a heavy focus on customer experience throughout its business operations including production, marketing, sales, and after-sales service. Apart from that, the company focuses on trust and reliability in every form of customer communication including advertisements and the media campaigns it runs. Improved customer experience has been driving higher customer satisfaction resulting in more repeat purchases as well as growth in sales and revenue.
Global Sales and Distribution Network :
A global sales and distribution network is also a source of competitive advantage for a computing brand. HP’s products sell around the world in several nations. Apart from a physical sales and distribution network, the company also utilizes digital channels for the sales, distribution, and service of its products. Apart from offering HP global coverage, its global distribution network helps it expand its international presence. HP makes its products, solutions, and services available through a variety of channels including:
- retailers that sell HP products to the public through their own physical or internet stores;
- resellers that sell HP products and services, frequently with their own value-added products or services, to targeted customer groups;
- distribution partners that supply its products and solutions to resellers;
- and system integrators and other business intermediaries that provide various levels of services, including systems integration work and as-a-service solutions, and typically partner with HP on client solutions that need HP products and services.
Large and Loyal Customer Base :
HP enjoys a leadership position in the computing industry. It has a large and loyal customer base from all around the world. The heavy customer loyalty that the company enjoys is mainly due to its focus on product quality as well as customer experience and technological innovation. All these factors have enabled HP to achieve strong brand equity resulting in high customer loyalty. A large and loyal customer base is also a source of competitive advantage in the computing industry since repeat purchases by customers over their lifetime drive the sales and revenue of HP higher.
Human Resource Management and Work Culture:
The human capital of an organization is a leading source of competitive advantage for the business. Most of the competitive advantages of the business are rooted in the human capital of the organization. It is why leading technology and computing companies maintain a heavy focus on managing their human capital in order to drive performance and productivity higher. As of 2019, the company employed around 56,000 people throughout the world. It has also established a work culture that drives creativity and innovation. HP is known worldwide for its unique culture and its focus on strategic HR management.