Hewlett Packard: a ship adrift

Hewlett Packard: a ship adrift

How do we make sense of Hewlett Packard's strategy? And how much credibility does it have? More to the point, does Hewlett Packard actually have a strategy?

In August, the then HP CEO Leo Apotheker announced the company was getting out of tablets and looking to sell of its PCs. Now the new CEO Meg Whitman says the company will keep its PC business. Whitman replaced Apotheker after he was fired. Analysts say it's the right idea as PCs represent one third of the company's revenue. Hewlett Packard is the world's biggest maker of PCs and sells more desktop and laptop computers-about 64 million last year – than any other company in the world. It has a massive 18.5 per cent share of the global PC market but its margins of just 5.9 per cent did not make it that profitable.

So why not do something about the margins? Why not create revenue streams, even if that means changing the business model? Why close a business you spent years building into the world's biggest PC maker.

As analysts say here , there is no real plan because HP is still selling commodity hardware that Chinese workers will make for next to nothing, with little differentiation.

Hewlett Packard has no clear strategy and that's the big worry.


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