Hp External Analysis Essay Example for Free

Hp External Analysis EssayHewlett Packard External Environment Analysis Hewlett Packard External Environment Analysis In todays constantly evolving business world, it is essential for organizations to fully master and incorporate strategic management theory into decision making servees. As the worlds gargantuanst engineering club, HP brings to put upher a portfolio that spans printing, personal computing, software, services, and IT infrastructure to solve customer problems (Hewlett Packard, 2010). HP is wellhead positioned to outperform the market. The strength of HPs portfolio is leaner toll structure and accelerating market momentum that gives the confidence to raise the full year outlook (Hurd, 2010). virtuoso of the most principal(prenominal) aspects of Hewlett Packards strategy building is an digest of the away business purlieu that they operate in.As pointed out in the text Strategic Management. Concepts and Cases Competitiveness and Globalization, The firms under standing of the external milieu is matched with knowledge about its internal purlieu to form its vision, to develop its mission, and to identify and implement actions that result in strategic competitiveness and above-average returns. (Hitt, Ireland, and Hoskisson, 2009) In this paper, there entrust be an analysis of Hewlett Packards external business environment and its impact on the firms strategic business continuity plan, including examination of the ternary components of the external environment, the usual environment, the industry environment, and the competitor environment. External Environmental Analysis Before analyzing Hewlett Packards external influences, it is important to highlight the specific processes in an external environmental analysis.This analysis is performed so that firms can correctly identify potential opportunities and threats in their external environment, and involves continually scanning, supervise, forecasting, and assessing segments of the usual environment. Scanning is the process of studying distributively segment of the general environment to identify upcoming or ongoing changes that can impact the firm. Monitoring refers to observing the changes identified in the scanning process to determine if a particular trend can be singled out which would have significant consequences for the firm.Trend identification is an important aspect of monitoring, as well as recognizing the trends effect on the firms stakeholders. Forecasting takes the changes and trends that scanning and monitoring produced, and attempts to formulate useful predictions based on those changes and trends. One important factor in forecasting is identifying the time frame and rate of change for trends, so that the firm does not miss an fortune or get caught off guard by a threat. The final step in external environmental analysis is assessing. The objective of assessing is to determine the timing and significance of the cause of environmental changes and t rends on the strategic management of the firm. (Hitt, Ireland, and Hoskisson, 2009) The prime focus of assessing is determining the impact of forecasted trends on strategic direction of the firm. Assessing decides if an opportunity or threat requires a change in plans, or the firm to take a new direction. General Environment The first component of the external environment is the general environment. The general environment is composed of dimensions in the broader society that influence an industry and the firms within it. (Hitt, Ireland, and Hoskisson, 2009) These dimensions of broader society are further classified into six categories. The six categories of the general environment are demographic, economic, political and legal, socio-cultural, technological, and global. A large, global firm like Hewlett-Packard will find opportunities and threats in each aspect of the general environment. The demographic folk of the general environment includes factors much(prenominal) as popul ation size, age structure, ethnic mix, income distribution, and geographic distribution.Hewlett-Packards market position as the worlds largest technology company requires careful consideration of demographic factors. Hewlett-Packards strategic continuity is impacted by this factor because it must identify markets with the correct demographic to provide an opportunity to sell its computer products. Markets with an unfavorable income distribution or an older age structure may need to be avoided until more favorable conditions arise. The economic category of the general environment includes factors such as interest rates, gross domestic product, and business savings rates.Hewlett-Packards continuity strategy is impacted by economic factors in a similar fashion as it is impacted by demographics. Markets located in a strong economy represent opportunities for the firm. Additionally, developing economies may provide lower interest rates, or favorable business savings rates. Economies in decline can represent a threat to Hewlett-Packard, as high-priced computer purchases may not be a consumers focus. The political and legal category of the general environment includes factors such as antitrust laws, revenue enhancement laws, and labor laws.Hewlett-Packard can face huge opportunities and threats with changes and trends in legislation. Hewlett-Packard produces a wide range of computer products, and if it is challenged by an antitrust law, it could face a very large threat. However, favorable changes in tax law can represent just as large an opportunity for the firm to save money. The socio-cultural category of the general environment includes factors such as workforce diversity, shifts in work and career preferences, and shifts in product and service preferences.Hewlett-Packards business continuity is very concerned with monitoring and planning for preference trends in the computer technology industry. Proper assessment and integration of a new product preference ca n represent an important opportunity, while missing this preference could end up a threat. The technological category of the general environment includes factors such as product innovations, new communications technologies, and government supported research and development expenditures. Obviously this category caries great significance for a computer based firm like Hewlett-Packard. proceeds innovations can represent an opportunity for strategic continuity if Hewlett-Packard can incorporate them, a threat to strategic continuity if they cannot. New communications technologies can be utilized to assist in streamlining operations, and represent an opportunity to lower long term costs. The final category of the general environment is global. The global category includes factors such as critical global markets, new industrialized countries, and cultural and institutional attributes. Hewlett-Packard is a global firm, and changes or trends in the global markets must be aforethought(ip) f or to ensure strategic continuity.