HP’s Strategy

The big strategy question surrounding HP is whether or not they should spin off their printer division into a separate company. This article, though, looks at other strategy changes that may occur, based on some interesting things happening inside HP.

When Carly Fiorina unexpectedly resigned as CEO of Hewlett-Packard Co. last month, the question was raised yet again as to whether HP is caught in a no-man's land between the vast product and services offerings of IBM and the ruthless cost-competitiveness of Dell. While it's far too early to tell whether new leadership at HP will translate into a new strategy, two nascent efforts at the company hint at some future product and services offerings. One is a homegrown procurement system that HP plans to turn into a commercial product later this year. The other, also based on HP's own experience, is a consulting service that attempts to put some hard numbers behind the hazy concept of "agility" (see "A Facility for Agility" at the end of this article).

The procurement product can trace its roots to 2000, when HP confronted a shortfall in availability for the flash memory devices used in its highly profitable laser printers. The booming cell-phone market was hungry for those same components, and with the security of its profitable printer line hanging in the balance, HP opted for a long-term binding contract to ensure the supply of flash memory devices at a capped (that is, higher) price.