HP Merging Divisions

HP announced that it will be combing its printing and personal computing divisions in order to create an identity and ultimately increase profits as reported by the Associated Press. This is in response to the fact that profits have been dragging. The complex supply chain and competition has resulted in revenues decreasing and costs increasing. In the PC division, HP has faced increased competition with the rapidly growing tablet and Smartphone business. In the printing division, revenues have decreased as more are going paperless.

The goal in merging the printing division with the personal computer division is to save money by streamlining and consolidating. The money that is saved will be invested in innovation and growing areas. As they consolidate divisions and create new innovative products they hope to increase their brand name.

This innovation is important as it will be used to combat and compete against they mighty Apple. HP is currently working on products which hope to acheive this. For example, they have been investing in lighter and thinner “ultrabooks”. These are “devices that are easy to hold like tablets yet more powerful in sporting regular keyboards and the ability to run programs side by side on the same screen.” In addition they are exploring and greater advancement in the printing industry. HP hopes to be able to have an identity that people can attach to it. Through these changes, they hope to create “One HP” that is streamlined and customer oriented.

I believe that HP is correct to combine the two decisions as it will decrease costs for the company. The printing industry is ever decreasing, therefore, I believe that HP’s goal of making PC and printer product designs working together is a good idea. This idea will create some synergy between the two and I believe will help printers sell more. I also believe that they are correct in investing the money in new innovative products. This is smart as it will help combat the ever-increasing competition. However, I am concerned about their attitude towards increasing brand-name.

When asked about “What is HP?”, HP CEO commented: “ HP is the world’s largest provider of …..It’s simple, it’s clear, and it doesn’t need a lot of explanation.” This is concerning since he only boasts about the greatness of HP. His answer does not precisely state the brand of HP. Finally, I believe that this statement is ignoring the fact that HP has some big decisions ahead if it would like to continue being the world’s largest producer. This is an example of stage three of “How the Mighty Fall”. Internal warning signs are appearing while external data remains stronger. In his comments he does not mention any adversity that is to come and only amplifies the positive data. I do not believe that the CEO understands the magnanimity of what the future holds based off of their decisions.

What do you think?