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    HP Case Study

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    soumi
    Hewlett Packard's computer systems organization was facing challenges in the Indian market in the 1980s after being the market leader in computer production. [1] HP responded by redefining its competitive strategy and product lines. It also adopted a common RISC architecture. [2] Changes in buying patterns from OEMs, VARs and distributors resulted in lower average prices and higher costs for HP. [3] Robert Dudley from Leap Consulting was appointed to audit HP's enterprise customer management approach. The goals of the audit were to illustrate how HP's current sales actions aligned with buyer needs, optimize current approaches, and analyze two customer samples. [4] The audit found HP was doing well

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    HP Case Study

    Uploaded by

    soumi
    251 views12 pages
    Hewlett Packard's computer systems organization was facing challenges in the Indian market in the 1980s after being the market leader in computer production. [1] HP responded by redefining its competitive strategy and product lines. It also adopted a common RISC architecture. [2] Changes in buying patterns from OEMs, VARs and distributors resulted in lower average prices and higher costs for HP. [3] Robert Dudley from Leap Consulting was appointed to audit HP's enterprise customer management approach. The goals of the audit were to illustrate how HP's current sales actions aligned with buyer needs, optimize current approaches, and analyze two customer samples. [4] The audit found HP was doing well

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    HP Case analysis

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    Hewlett Packard's computer systems organization was facing challenges in the Indian market in the 1980s after being the market leader in computer production. [1] HP responded by redefining its competitive strategy and product lines. It also adopted a common RISC architecture. [2] Changes in buying patterns from OEMs, VARs and distributors resulted in lower average prices and higher costs for HP. [3] Robert Dudley from Leap Consulting was appointed to audit HP's enterprise customer management approach. The goals of the audit were to illustrate how HP's current sales actions aligned with buyer needs, optimize current approaches, and analyze two customer samples. [4] The audit found HP was doing well

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    251 views12 pages

    HP Case Study

    Uploaded by

    soumi
    Hewlett Packard's computer systems organization was facing challenges in the Indian market in the 1980s after being the market leader in computer production. [1] HP responded by redefining its competitive strategy and product lines. It also adopted a common RISC architecture. [2] Changes in buying patterns from OEMs, VARs and distributors resulted in lower average prices and higher costs for HP. [3] Robert Dudley from Leap Consulting was appointed to audit HP's enterprise customer management approach. The goals of the audit were to illustrate how HP's current sales actions aligned with buyer needs, optimize current approaches, and analyze two customer samples. [4] The audit found HP was doing well

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    Hewlett Packard-

    Computer Systems Organization: Selling to Enterprise Customers

    CASE ANALYSIS
    Agenda
    01 Situation Analysis

    02 Problem Statement

    03 Goal Setting

    04 Migration Strategy

    05 Case Questions
    Situation Analysis
    Market Leader
    • In Computer Production 01
    • USP- Price and Performance

    Success in 1980’s followed by decline in Indian Business


    • HP responded to the crisis by redefining competitive strategy and revamped the existing 02
    product lines.
    • HP Adopted common RISC architecture, aimed at easing(low reputed) marketing
    department's job.
    Shifting Buying Behaviors 03
    • Changes in Buying patterns of OEMs, VARs and distributors resulted in
    lowered HP’s average price and increase in cost of sales

    Focus on top 40-50 customers 04


    • UNIX workstation’s demand growing 40% per year.
    • Application of Pareto 80-20 rule i.e., 20% of CSO customers
    account for 80% of sales.
    HP’s CSO Customers
    Particulars Enterprise Small/Medium Size Individual
    Turnover $ 0.5- $ 200 Mn Below $0.25 Mn each NA
    (2500 firms) Each Daily Orders monthly or quarterly
    orders
    Percentage of Top 5% of customers a NA NA
    Turnover ccounted for 40% of
    HP’s Total Sales
    Distribution Channels Direct Sales by HP Combination of sales Exclusive sales by in
    used sales representatives representatives and direct retail channels
    channel partners
    Problem Statement
    To identify market and organisational
    opportunities to grow and reduce
    operational costs (i.e. Sales, To redefine industry focused
    support) from 30% to 10%. approach to selling to
    large/enterprise customers.

    Solving the above stated issue


    could yield another structural Robert Dudley from Leap
    change in the sales organisation Consulting was appointed to
    department. audit HP’s enterprise customer
    management approach
    (first change occurred:1992)
    Setting up the Goals
    For the Sales Process Audit

    To illustrate how current HP sales actions are aligned with the buyer’s needs and
    01 preferences.

    Optimization of the current approaches to enhance return on productive


    02 selling time.

    Two samples drawn from the population for the Audit:


    03 1) Largest pool of HP’s Customer.
    2) Industry in which HP’s was Strong.
    Typology of Sales Opportunity
    TYPE REPURCHASE REPLACEMENT EXPANSTION INNOVATION

    DESCRIPTION -Customer Initiated -HP Initiated


    -Influenced by IT -Not Influenced by IT
    -Assigned Budget -Budget to be created
    -4 Stages -5 stages
    PROJECT SPECS - Three would generate 80% of the sales to the large customer (5 sales represe - Generate 20% of sa
    ntatives). les from lead (1 sale
    - Project average length: 6 months implied four stage process s representative).
    - 53 hours per week or 2400 hours per years (per sales representative). - Length : 1 year ( for
    - Turnover= $ 60 Mn sales + S 59 Mn Hardware + $ 1 Mn Consulting = $120Mn 4 stages) , 1 or 2 ye
    Total Sales ars for last stage.
    - Turnover ; $ 22 Mn
    Regrouping :
    - Repurchase opportunities as downstream.
    - Replacement/ Expansion opportunities as mid stream.
    - Innovation opportunities as upstream.
    Key Insights: Migration Strategy up to IT infrastructure and enterprise-wide solutions
    HP was doing wel Downstream : Mid Stream: Upstream:
    l in Downstream To Improve operational Selecting accounts, i.e., not Sell Concepts and
    CSFs Efficiency pursuing each opportunity. fast delivery
    and Mid stream.
    Migration Strategy
    Penetrate other
    agencies to sell
    upstream
    Move up and get
    solutions
    into midstream
    business.
    Entering an
    account at the
    downstream
    business.
    Proposed Model :
    PORTFOLIO MANAGEMENT

     This model allows to enter an account at multiple levels.


     It is tailored as per the dynamics of various sales opportunities.
    Case Questions
    1) Is this the time for HP’s CSO to institute more changes?
    What are your recommendations to Diaz?

    As mentioned in point-2 will reflect


    Avoiding of time wastage due to sal
    a better conversion rate in sales
    es representatives taking responsib
    1 3 opportunities, thus shifting focus
    ility to do everything for their
    from not solely on repurchase
    accounts, e.g. Developing quotes,
    opportunities.
    configuring systems.
    .

    Recommended
    Changes
    There was need to prioritise the Developing standard operating
    accounts and appoint a support procedures entailing more
    2 4 specifications for instance which
    team specialised on understanding
    the accounts’ needs further reducing procedures to follow in deciding to
    wasted time. serve an account and at which
    conditions.
    2) How is selling instruments (HP’s traditional business) differe
    nt from selling computer systems? Why does HP treat its sales
    force as a cost centre? What are the implications of such a
    structure?
    It differs in that HP transitioned from a manufacturer of ‘hot boxes’ into a global supplier of
    information appliances and solutions.

    HP treats its sales force as a cost centre because they are focused on additional profits, thus making the
    salesforce strive to close as many orders as possible, not being able to add value to any business.

    The transactional nature of the businesses HP serves; no customer seems interested in partnering up
    with HP for long term business so that to mutually benefit and add value to such customers new initiati
    ves must be taken.

    Emphasis more on (almost) lack of innovative projects


    THANK YOU !

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