E-Commerce Strategy In Helwett-Packard

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E-COMMERCE STRATEGY IN HEWLETT-PACKARD (HP)

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E-commerce strategy in Hewlett-Packard

Introduction

Hewlett-Packard Company specializes in rendering solutions to software-based issues in

technology products to assorted clients such as multinational enterprises, businesses and

individuals. The services offered by HP include IT architecture for enterprises, multi-vendor

client services, products related to printing and scanning and personal computer solutions.

Hewlett-Packard is an American-based company with its headquarters in Palo Alto, California

(HP, 2018).

E-commerce refers to all forms of commercial or business transactions, making use of the

transfer of information online. The process entails a wide array of industries which include,

auction or music sites, consumer-based retail sites and business transactions involving products

and services between corporations. Notably, e-commerce is among the most essential features of

the internet that have been utilized by man to run contemporary economies. The technology

incorporated into e-commerce provides customers with the opportunity to electronically carry

out business transactions in the absence of time and distance. The recent years have witnessed

rapid expansion of electronic commerce and there are prospects that, if it might accelerate or

continue at this rate. The near future will, probably, see boundaries between "electronic" and

"conventional" commerce become blurred considering that more business transactions will be

carried out using internet-based platforms.

Dell alongside other IT service providers such as the Lenovo Group and Toshiba offers

stiff competition even though HP went past them in terms of sales. The competition is

characterized by parameters such as; respective products’ qualities, price of products, diversity of

the offered product, company’s reputation and also branding and packaging. Therefore, HP

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ought to come up with ideal strategies that will enable it gain an edge over its closest

competitors. The extensive use of e-commerce has been identified as one of the most effective

strategies that can hand the technology giant the necessary competitive advantage.

operations in the next three years. One portion of the corporation will continue focusing on PCs

and printers, while the second portion will be focused on software and hardware. The company

hopes that the extensive use of electronic commerce will make it easy to run the two business

departments. There are prospects that the split operations will continue supporting two roughly

equally sized companies with almost equal revenues for each segment. Notably, since the full

adoption of e-commerce by HP, the company has maintained an interesting profile highlighted

by an income of $126 million for the 2009/2010 financial year. This amount was more by 10%

as compared to the previous year; this is the year when the company launched its current e-

commerce strategy. The same financial year also saw an increase of 14.4% and 13.2% for the

company’s net and operating profits respectively.

In the coming three years, Hewlett-Packard Company has approximations of GAAP

diluted net earnings per share from on-going operations to run from $1.69 to $1.79, and the

approximations of non-GAAP diluted net earnings per share to run from $1.74 to $1.84 (HP,

2018). The estimates of non-GAAP diluted net earnings per share are not inclusive of post-tax

costs essentially linked to such items as defined benefit plan settlement charges, non-operating

retirement-related credits, restructuring and other charges, acquisition-related charges, net tax

indemnifications, amortization of intangible assets, discontinued operations, and net valuation

allowances. On the grounds of the current environment, the company hopes to generate a

minimum cash flow of $3.0 billion for fiscal 2018.

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The management of the company has also expressed the expectation of 50%-75% return

of per annum free cash flow to its shareholders. Early this year, Hewlett-Packard Company made

the indication that it had the hope of moving near the higher end of that range, considering 5%

amplification of the scheduled quarterly dividend sum, alongside the balance given to the

company’s shareholders via repurchases of shares. According to the Chief Financial Officer of

the company (Cathie Lesjak), Hewlett-Packard Company currently exhibits a great business

momentum owing to the success of such strategies as the increased use of e-commerce.

Furthermore, the Officer explains how the company expects to carry on the same magnitude of

momentum in the coming years. The company has already demonstrated the ability to increase

its overall performance, across the globe, because of the power of e-commerce.

In the very first e-commerce announcement Hewlett-Packard Company launched new e-

commerce software bundles to be used in the hardware servers that operate the HP's brand of

UNIX; ideally, the development of this software had a target of the ISP market. Besides the e-

commerce offerings known as Domain Commerce, the company also came up with a new "Web

Quality of Service" technology, alongside considerable collaboration with Cisco Systems, with

the objective of managing the availability of Web servers in the event of heavy use. Ideally, the

initial e-commerce announcement by HP had the primary objective of strengthening the

company’s service provision against rivals Sun Microsystems and IBM. The initiative was also

aimed at reflecting a new version of HP's Internet commerce strategy at a time when HP was

attempting to rally its several divisions around its "extended enterprise” vision (Glowik, 2016).

Notably, before HP’s initial announcement to use e-commerce, such competitors as Sun

Microsystems and IBM were already using the business strategy. Consequently, Hewlett-Packard

Company made the declaration that it would adopt the strategy of doing things online, and get rid

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of all those who were not supporting the new course. This first announcement was coupled with

the formation of strong alliances with such renowned software vendors as iCat, Intershop, Open

Market, and BroadVision (Glowik, 2016). During the launch, the company also announced that

its new Domain Commerce middleware would entail templates supporting the configuration of e-

commerce software from the partnering vendors.

In the subsequent phase, Hewlett-Packard introduced a new e-commerce plan aimed at

enabling their outlets to allocate system resources to their most estimable consumers and

applications to increase the friendliness of their Web sites. In order to fit in the current digital

market, HP had to come up with the Web Quality of Service (QoS) strategy with the objective of

enabling internet users claim an anticipated level of service from Web sites before being fully

engaged in e-commerce (Glowik, 2016). The management of the company observed how it was

essential to provide a predictable service; as such initiative would increase the quality of

products and services provided to customers. The Web QoS is inclusive of software, hardware,

and products that allowing service provides and firms to prioritize such functions as online sales

and banking over activities like Web browsing in the course of peak activity.

Hewlett-Packard Company has realized the essence of using e-commerce technologies as

their various outlets will be able to identify their most important customers. This identification

will rely on cookies, IP addresses, alongside other internet-based features. Consequently, the

company will be able to give priority to the identified customers, with respect to the access to

server resources. With the use of the new technologies, customers who have to wait in a queue

can console themselves with an on-screen message telling them the remaining wait time. Ideally,

the earliest product built on the Web QoS technologies was HP ServiceControl; HP shipped this

product for its HP-UX Unix operating system and HP 9000 Enterprise servers (Skinner, 2014).

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Ideally, this product entails Persistent Connections, with the objective of preventing server

overload via the limitation of access to high priority users; and Admission Control, which is a

policy-based system manufactured for the prioritization and management of the workload on a

server.

As a result of the growing competition in the digital electronic industry, HP advanced to

the use of a complete server platform, known as the HP Domain Commerce, a characteristic of

HP Service Control coupled with a wide host of essential e-commerce tools and applications

(Skinner, 2014). Currently, the company is expanding on its extended enterprise plan HP to

enable users build IT infrastructures utilizing the internet and an open, distributed computing

platform. Further to enhance its use of e-commerce, Hewlett-Packard Company is committed to

the development of a new systems strategy, capable of to supporting Windows and Unix

platforms, alongside building bridges between those environments.

Amid the effects of globalization, Hewlett-Packard Company is committed to ensure that

its customers can access online information used in the purchase of the company’s products and

services. The firm’s extensive use of e-commerce matches it with the global digital standards,

hence keeping up the pace of competition in the industry. It is highly recommended for the

company to explore the most recent e-commerce technologies to retain its market share, and

penetrate new markets.

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References

Glowik, M 2016, Market Entry Strategies : Internationalization Theories, Concepts And Cases

Of Asian High-Technology Firms: Haier, Hon Hai Precision, Lenovo, LG Electronics,

Panasonic, Samsung, Sharp, Sony, TCL, Xiaomi, Berlin: De Gruyter Oldenbourg.

HP. (2018). About Hewlett-Packard [online]. Available at:

<http://www8.hp.com/us/en/home.html> [11 May 2018]

Skinner, C 2014, Digital Bank : Strategies To Launch Or Become A Digital Bank, Singapore:

Marshall Cavendish International Pte Ltd.

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