Hewlett-Packard: Wishing for the Good Old Days

6 Feb

Hewlett-Packard WAS a great company for a long time, with a number of innovations in the calculator, computer, printer, and other categories over the years. As noted by Businessweek (and highlighted by this photo montage): “Stanford University classmates Bill Hewlett and Dave Packard founded Hewlett-Packard in 1939. The company’s first product, built in a Palo Alto (Calif.) garage, was an audio oscillator — an electronic test instrument used by sound engineers. Seventyfour years later, their legacy lives on in microchips, cameras, data centers, and, of course, printers.”

But, recent years have not been as kind for HP; and its future is uncertain. As reported by Ashlee Vance and Aaron Ricadela for Businessweek: “Things are challenging at HP — more, perhaps, than at any time in its history. Customers are buying less of two of HP’s most important products — PCs and printers — while the company has amassed debt and laid out billions on acquisitions that haven’t worked out. Wall Street analysts have kicked off the New Year by saying that CEO Meg Whitman ought to break up the company. Since August 2010, the company has lost 70 percent of its share price and close to $68 billion in value. ‘You just wonder how HP can possibly fall so far so fast,’ says William George, a professor at Harvard Business School and board member of ExxonMobil, Goldman Sachs, and the Mayo Clinic. It’s true that HP has a collection of now commoditized businesses such as PCs, servers, and printers, and that its products look dated in some areas. But many of these businesses remain cash machines, with HP generating more than $12 billion in operating income a year. The disarray at the top of the organization chart, though, has just been too much. ‘This is one of the great corporate destructions of all time,’ says George.’“They will continue drifting and disappointing their shareholders unless they’re ready to make some really hard decisions.’”

Click here to read the full Businessweek story.

And click the image to see a video on the challenges facing HP.

Photograph by Kim White/Bloomberg

 

9 Responses to “Hewlett-Packard: Wishing for the Good Old Days”

  1. Philip Balzafiore February 6, 2013 at 12:25 pm #

    It is not out of the ordinary for a company such as HP to have been so strong in the past and in recent years lose market value. This has been the trend for many companies over the years including Best Buy and Blockbuster. Although once at the top of the electronic and movie distribution food chain respectively, these two once giants are failing to adapt with a changing world. It seems the same is happening with HP and as history has shown, it will not take long for competitors to realize HP’s weaknesses and take even more of their market share in the near future.

  2. Kaival Patel February 6, 2013 at 1:40 pm #

    Hewlett-Packard has been struggling for the past few years. At one point I used to own one. They have lost the battle to Apple. I do believe that they still have a fighting chance. Like the Blackberry 10, they should create a whole new operating system that distinguishes them. They need something exclusively for themselves, than from there they can also raise revenues by licensing their platform to other companies.

  3. Nick Cavallino February 7, 2013 at 1:26 pm #

    With recent advances in technology and technological studies, it is no surprise that one of the leading companies for computer equipment, etc, is fighting for its life. As mentioned above in an earlier comment, HP has failed to adapt to the environment, and it is clearly showing. New developments need to be made in order to keep the “Good Old Days” from leaving the company.

  4. Marion LoMonaco February 9, 2013 at 12:34 pm #

    I have been following HP for several years as an MBA student at Hofstra. HP keeps on coming up in our discussions on how poorly they have done in a time of disruptive technologies. They have not been able to innovate as a company like Apple has. Restructuring has been a flop. Many have felt they needed to spin off their businesses, and when they decided to keep their PC business, the stock price continued to drop and remains flat. It all boils down to what we covered in class, bigger is not better, and when you have reached a certain height in the marketplace it is harder to continue to maintain a competitive advantage unless you innovate. They need new products, and maybe a new CMO who has a different business model, can set up some strategic partnerships and who can come up with new marketing goals to improve their profits.

  5. Harrison Jakobs February 12, 2013 at 11:08 pm #

    Hewlett Packard has been a favorite brand computer and printer for many people I know for as long as I can remember. After reading this blog I share the same concern that Harvard Business School Professor, William George has. “How can they have fallen so far so fast?” It is sad to say but it doesn’t seem realistic that they will do a quick turn around and recover their value and status.

  6. Nick Wong February 18, 2013 at 2:29 pm #

    Personally, I don’t find it surprising that HP is faltering because, as stated above, it can happen to any company. The unpredictability of it all is what catches us all off guard. We are all wondering how, why, and when? The new generation of tech companies just may be too overwhelming at this point. In other news, yay, my HP products were always bad (became dysfunctional for unknown reasons) anyway.

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