Discuss about the Formal Informational Report on Dell and HP (Computers and Software).
Management Style
The management style that HP focused was called “the HP way.” The company abandoned its “hire and fire” mentality, which was to hire many workers for a large project and then fire them afterward. The company offered their employees with “almost perfect job security” instead, where the company stayed away from layoffs even during recession 1974. Currently, HP follows the “Management by Wandering around” for informal communication within the enterprise, “Management by Objectives”, and “Total Quality Control” that serves to produce high quality products (Steiber & Alange, 2016). Dell started its journey as a startup and therefore follows some management styles. They always analyze their actions which cause the company to succeed and not random fun-filled activities. The company seriously takes family commitment as a way to balance life and work for productive work and encourage spotting opportunities. Other management styles that made so successful are embracing risk like a startup, being strategic, learning from mistakes and surrounding oneself with the best people (Michael Dell’s dilemma, 2016).
Kou & Lee (2015) stated that, over the years HP has produced several products like workstation computers, servers, scanners, and printers. It was successful in a launch in several hardware departments like in printer department, where it was described as the leading printing and imaging systems provider (IPG) from individuals to small and medium enterprises. HP also released some business services in network security. It sells software in different categories such as mobile apps, and analytics and big data. It also provides SaaS or software as a service, software services, and cloud computing solutions. Their managed services also offer full IT-support solutions. Kou, Lee & Wei (2015) opined that Dell has products ranging from business class brands where the company offers longer life-cycle, serviceability, and reliability. Its consumer class brands offer performance, value, and expandability. Besides it has peripheral class products and service and support brands. Their technical supports for products are provided according to the type of components and support level purchase. Types of support offered are business-day on-site support, collect and return service and business-hours telephone support. It also provides 24×7 online supports for 365 days a year. The company also provides multivendor hardware support, advisory, and protection services among others.
Tandon et al., (2013) stated that, to solve the multitude of problems towards selling its products on an e-commerce platform, HP developed an E-Services framework which has the following stages: matchmaking, negotiation, the formation of the contract, and fulfillment of the contract. In case the company finds the e-commerce to intrusive, that’s why they have proposed three standardizations: standards for business-specific types which contracts, services and goods traded, Standards for specifying the format of contracts, proposals, and advertisements, which are used during business-to-business (B2B) transactions. And, standards that specify the protocols which the traders use to engage with each other during different stages of B2B lifecycle. Dell set up its website www.dell.com as an e-commerce website and found huge success through online sales. The approach behind the move to e-commerce platform was to leverage the benefit of face-to-face contact between the seller and the buyer. It ensures that the staff is responsible for providing quality customer service and support, and on delivering the product when the users order products from the website (Mohapatra, 2013). Other strategies the company adopted are selling directly to the consumers, customization of product, and tracking the products.
HP broke up from its internal PC division and split itself into two companies forming Hewlett-Packard Enterprise and HP Inc. The former will focus on selling consulting services and data center hardware, whereas, the latter will focus on selling printers and PCs. It means server farms, inventory tracking, accounting, payroll, and email were all divided into two, leaving all the thousands of employees in the dark. Eighteen software programs that needed transition had to be taken extra care, because if they broke HP would be unable to ship inventory, take orders or pay workers (MacArthur & Barton, 2013).
Dell faces a challenge from its Dell-EMC Merger. With the merger, there will be a lot of overlapping products which will confuse the customers until the company comes out with a single brand. EMC charges much higher price than Dell for the same product, and it’s the reason when the merger will complete, and the revenue per sale will decline (deal, 2016). It is more troublesome since EMC’s sales force depends on earned revenue, and lower revenue equals to lower commissions.
HP decided to split up into two organizations – Hewlett-Packard Enterprise and HP Inc. The company took the decision after taking many factors into account such as – Lenovo taking over the market, slow demand in the PC market, problems in the company’s senior management, company’s own $10.2 billion Autonomy acquisition that lowered the company’s value among many. It led to a migration of at least 18 software programs, which if broken would result in non-payment of workers, broken payroll inventory, and non-shipping of inventory items. Many workers were also left in the dark because of the acquisition (Forbes Welcome, 2016).
Silver Lake Partners, a private equity firm brought Dell from public shareholders, but the buyout was underpriced at 22%, and this can lead to compensation to investors in tens of millions, those who opposed the deal for the computer maker (How Michael Dell, Silver Lake Underpaid Shareholders But Did No Wrong, 2016).
Voigt, Buliga & Michl (2017) explained that Dell’s competitive edge comes from its build-to-order and direct selling approach preventing middleman in between. JIT or just-in-time strategy allowed them to function with lowest inventory level. It gave Dell a significant cost advantage in component costs as they deprecate. Dell also offered personalization options which are customer centric. The workforce of the company also had access automated real-time volume expectations and demand trends of various components. Dell has its manufacturing plants built in places, which has high productive workforces and low labor costs, giving them a location-specific advantage.
One strategy of HP is the key to sustainability to gain a competitive advantage. Another strategy is to renovate their BPS or Business Process Service by introducing new technologies to optimize existing systems, improve system integration, mitigating implementation risks and delivering results quickly (Pavie et al., 2013). New technologies introduced are Mobile technology, cloud technology, analytics to provide insights, and advanced BPS accelerators and automation.
HP’s main competitor is Dell. Dell has been consistent in funding innovation for the last six years, but for HP they had been trying to sustain in the PC market, and its demise started when it was split into two companies. Currently, in compared to HP Dell has a strong channel partner program (Forbes Welcome, 2016). In the same period, HP had a mixed channel partner track record. HP’s reluctance in x86 server market and PC market led to the disappearance of few partners as they felt burned when the sales team members of HP Enterprise took direct deals. Now, Dell has a definite upper hand against HP in the channel (Cooke, 2013).
In the Global 2000 list, HP was positioned 80, and number 31 as Forbes nominated in the World’s Valuable Brands category. At present, it is one of the champions in the global technology provider’s area (HP History: HP’s Garage: Story: Partner in Greatness | HP® Official Site, 2016). Michael S. Dell became the Youngest CEO of a Fortune 500 company at the age of 27. Today, Dell Inc. it is one of the internationally acclaimed manufacturing brands (Dell’s success in the details, 2016).
Michael Dell founded Dell in 1984, with the premise that to understand the needs of the customers and proving solutions accurately and efficiently, the company needed to sell computers directly to the consumers (us, 2016).
HP was founded in the year 1939 by Dave Packard and William Redington Hewlett. Currently, it operates as two different companies, the other being HP Inc. It is an American multinational Information Technology organization that delivers software services and hardware to large, medium and small enterprises across different industries (About us | HP® India, 2016).
Currently, Dell enjoys a 15 percent share in the sphere of high-end storage products like high-end storage products, printers, monitors, handheld computers, workstations, network servers, notebook computers, desktop personal computers, and a variety of computer software and peripherals. Michael Dell, the founder of Dell, has a 12 percent share in the company and will remain as the company’s chairperson. It has over 111,000 employees worldwide. Half of the company’s revenue comes from the PC market, and the other half comes from the server industry (Forbes Welcome, 2016).
Hewlett Packard has a revenue share of US$ 138.854 billion according to the revenue posted in 2015. Its workforce consists of 315,000 employees as of quarter two of 2015. It serves its products worldwide and is currently headquartered in Palo Alto, California (US). The primary sources of revenue for HP are through value-added solution providers, resellers, and sales to channel partners (HPI/HPE split. Hewlett-Packard Alumni, 2016).
References
About us | HP® India. (2016). Www8.hp.com. Retrieved 6 September 2016, from https://www8.hp.com/in/en/hp-information/
Cooke, P. (2013). Global production networks and global innovation networks: Stability versus growth. European Planning Studies, 21(7), 1081-1094.
deal, F. (2016). Four challenges for the Dell-EMC deal. Cnbc.com. Retrieved 6 September 2016, from https://www.cnbc.com/2015/10/12/four-challenges-for-the-dell-emc-deal.html
Dell’s success in the details. (2016). CNET. Retrieved 6 September 2016, from https://www.cnet.com/news/dells-success-in-the-details/
Forbes Welcome. (2016). Forbes.com. Retrieved 6 September 2016, from https://www.forbes.com/sites/valleyvoices/2015/10/27/making-sense-of-the-dell-emc-vmware-deal/
Forbes Welcome. (2016). Forbes.com. Retrieved 6 September 2016, from https://www.forbes.com/sites/patrickmoorhead/2013/06/21/dells-pc-growth-strategy-in-it-to-win-it/
Forbes Welcome. (2016). Forbes.com. Retrieved 6 September 2016, from https://www.forbes.com/companies/dell/
How Michael Dell, Silver Lake Underpaid Shareholders But Did No Wrong. (2016).Fortune.com. Retrieved 6 September 2016, from https://fortune.com/2016/06/02/michael-dell-shortchanged-shareholders/
HP History: HP’s Garage: Story: Partner in Greatness | HP® Official Site. (2016).Www8.hp.com. Retrieved 6 September 2016, from https://www8.hp.com/us/en/hp-information/about-hp/history/hp-garage/partner-in-greatness.html
HPI/HPE split. Hewlett-Packard Alumni. (2016). Hpalumni.org. Retrieved 6 September 2016, from https://www.hpalumni.org/split
Kou, T. C., & Lee, B. C. (2015). The influence of supply chain architecture on new product launch and performance in the high-tech industry. Journal of Business & Industrial Marketing, 30(5), 677-687.
Kou, T. C., Lee, B. C., & Wei, C. F. (2015). The role of product lean launch in customer relationships and performance in the high-tech manufacturing industry. International Journal of Operations & Production Management, 35(8), 1207-1223.
MacArthur, J. B., & Barton, T. L. (2015). A teaching case on strategic and tactical decision-making at Hewlett-Packard Co. Journal of Business Cases and Applications, 14, 1.
Michael Dell’s dilemma. (2016). Fortune.com. Retrieved 6 September 2016, from https://fortune.com/2011/06/13/michael-dells-dilemma/
Mohapatra, S. (2013). E-commerce Strategy. In E-Commerce Strategy(pp. 155-171). Springer US.
Pavie, X., Hsu, E., Rödle, H. J. T., & Tapia, R. O. (2013). How to define and analyze business model innovation in Service.
Steiber, A., & Alänge, S. (2016). Silicon Valley: A Cradle of Management Innovation. In The Silicon Valley Model (pp. 37-51). Springer International Publishing.
Tandon, R., Chakraborty, A., Srinivasan, G., Shroff, M., Abdullah, A., Shamasundar, B., … & Dhore, P. (2013). Hewlett Packard: Delivering Profitable Growth for HPDirect. com Using Operations Research.Interfaces, 43(1), 48-61
us, D. (2016). Our history. Dell. Retrieved 6 September 2016, from https://www.dell.com/learn/us/en/vn/our-history
Voigt, K. I., Buliga, O., & Michl, K. (2017). Customized and Built to Order: The Case of Dell. In Business Model Pioneers (pp. 55-66). Springer International Publishing.
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