HP: STRATEGY

HP: Strategy



HP: Strategy

Introduction

HP was able to compress the product development cycle by forming departments, based on functionality, around each product line. In the process, it gained expertise, technical skills in given domain area and was able to respond quickly to the needs of the target customer groups. The organization concentrated on building a group of complementary products in each product line rather than diversifying to unrelated products. The main rational behind HP going for product line based division was to give autonomy, responsibility and accountability to the divisions to foster an environment where individual motivation, creativity and freedom were never curtailed due to bureaucracy. It also made the division act as a small business unit with open communication and quick response to changing environment.

The CEOs failed when they had raised a U$100 million revenue rate in two years after launch, a value three times higher than the original forecast. According to Christensen, because disruptive technologies initially serve emerging markets, in short-term they are usually financially unattractive and have small potential revenues. On the wrong way, HP's managers were looking to make high profit margins. They set an aggressive revenue rate, which forced DMD to draw its strategy in a way to meet their expectations. On the other hand, DMD identified potential customers in several parties in the video game industry, but this industry needed the product for U$49.95, and based on HP's management DMD designed the Kittyhawk for a different market at a cost of U$250 per unit.

In light of Nadler and Tushman's congruence model

Nadler and Tushman's congruence model takes a different approach to looking at the factors influencing the success of the change process. This model aims to help understand the dynamics of what happens in an organization when we try to change it. This model sits firmly in the open systems school of thought, which uses the organism metaphor to understand organizational behavior. In light of this model, HP can be viewed as a system that draws inputs from both internal and external sources (strategy, resources, environment) and transforms them into outputs (activities, behavior and performance of the system at three levels: individual, group and total). The heart of the model is the opportunity it offers to analyze HP's transformation process in a way that does not give prescriptive answers, but instead stimulates thoughts on what needs to happen in a specific organizational context.

Work Elements

The work elements inside an organization include the significant individual and group jobs that are designed by an organization in order to achieve their long-term objectives. The work elements can be divided into three different categories; every single one of them carries a distinct approach when applied to organizational strategies. Nevertheless, according to Nadler and Tushman congruence model different work elements of the organization are one of the significant factors that contribute towards the growth and development of the organization. The efficiency of work elements inside an organization guarantee the effectiveness of organizational strategies; because, the strategies are designed by the higher ...