Profit Jumps 30% at Hewlett a Year Into Chief''s Tenure
You can see in this article, Profit Jumps 30% at Hewlett a Year Into Chief''s Tenure, how a new chief executive of Hewlett-Packard, Mark V. Hurd , succeed to increase profit by 30% in a year. He said what he would do is “increasing its revenue and improving its profit margins.”
In my opinion, one of the elements that are most responsible for its increase in revenue and profit margin is “core strategy”. According to Hamel, a company’s core strategy is “the essence of how the firm chooses to compete”. In this example, HP chooses to compete by focusing on its “business mission” and specifying its “basis for differentiation”. HP’s business mission focused on the printers. This company introduced the printers into the market and after that it found out new uses for its inkjet printer by making printers capable of printing large advertising signs or quickly producing large print jobs. Therefore, the success of the company is because of considering the more selling of the printers, the more selling of ink and toner as Mr. Hurd described this as a “demand creation model”. Moreover, Focusing on business mission is essential for this company because when HP’s revenue declined 2 percent in its consulting services division “Mr. Hurd said that the company was being more cautious on which jobs it bids for”. Regarding the basis for differentiation, HP competes differently than its competitors by “cutting-cost”. “The strong earnings growth can be attributed in part to continued cost-cutting” as it is mentioned in the article.
Another element that is responsible for HP’s incredible revenue is “core competencies” which is under the “strategic resources” category of Hamel’s Business Concept Innovation. According to Hamel, core competencies are “what the firm knows. It encompasses skills and unique capabilities”. HP Company is using its core competencies to introduce commercial printing and push color laser printers and copiers in offices. They have a skill to sell printers that consume more ink so they profit from the printing supplies. “We've grabbed market share in printers that use a lot of supplies,” Mr. Hurd said.
In my opinion, one of the elements that are most responsible for its increase in revenue and profit margin is “core strategy”. According to Hamel, a company’s core strategy is “the essence of how the firm chooses to compete”. In this example, HP chooses to compete by focusing on its “business mission” and specifying its “basis for differentiation”. HP’s business mission focused on the printers. This company introduced the printers into the market and after that it found out new uses for its inkjet printer by making printers capable of printing large advertising signs or quickly producing large print jobs. Therefore, the success of the company is because of considering the more selling of the printers, the more selling of ink and toner as Mr. Hurd described this as a “demand creation model”. Moreover, Focusing on business mission is essential for this company because when HP’s revenue declined 2 percent in its consulting services division “Mr. Hurd said that the company was being more cautious on which jobs it bids for”. Regarding the basis for differentiation, HP competes differently than its competitors by “cutting-cost”. “The strong earnings growth can be attributed in part to continued cost-cutting” as it is mentioned in the article.
Another element that is responsible for HP’s incredible revenue is “core competencies” which is under the “strategic resources” category of Hamel’s Business Concept Innovation. According to Hamel, core competencies are “what the firm knows. It encompasses skills and unique capabilities”. HP Company is using its core competencies to introduce commercial printing and push color laser printers and copiers in offices. They have a skill to sell printers that consume more ink so they profit from the printing supplies. “We've grabbed market share in printers that use a lot of supplies,” Mr. Hurd said.
posted by Hoda at
12:52 AM
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