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Hewlett - Packard International business
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| Words: 2892 | Submitted: 08-Mar-2012
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DescriptionExporting, Wholly owned subsidiary,Joint ventures,Management contracting
Hewlett-Packard, one of the largest computer companies in the world, was found by Bill Hewlett and Dave Packard in 1939. Headquartered in the U.S., it has branches all over the world. Nowadays, its products are wildly used in all areas, including personal uses, industrial, engineering, scientific researches and commercial, educational development. Thanks to the successful entry modes and efficient management mode of the supply chain, Hewlett-Packard has established its perfect international presence.
Nevertheless, it is not easy for a company to get rid of the infeasible options when making strategic choices and the right business decisions is the key to the success for a developing company in a specific area or in a specific time. In this essay, I will focus on five ways that Hewlett-Packard expands its global market share within the last four decades. Firstly, I will analyze why ‘export’ is the irreplaceable trade approach of Hewlett-Packard. Secondly, I will identify the ‘wholly owned subsidiary’ as one of the most important approaches to develop Hewlett-Packard’s global market. Thirdly, I will explain why Hewlett-Packard chose ‘joint ventures’ as a favored approach to enter developing countries. Then, I will discuss how ‘management contracting’ becomes an efficient and profitable trade approach, and why it cannot be overlooked for Hewlett-Packard. Lastly, I will give evidences to prove the ‘mergers and acquisitions’ is of special importance on Hewlett-Packard’s market extension strategy.
Oversea market entry through exporting is conventionally, and based on the Uppsala model, one of the first choice companies use to internationalize their commercial activities, and also ‘it is relatively straightforward and less risky than other forms of internationalization and offers a relatively simple and cheap exit strategy’. (Johnson, D and Turner, C. 2010)
As one of the most successful products of Hewlett-Packard, a series of data (Docin, 2005) have showed the sales of ink-jet printer series increased steadily since it was launched in 1988, and the sales reached 600,000 units in 1990. During that time, Hewlett-Packard chose ‘direct export’ as the entry mode to expand its market shares in Europe. Hence those products were manufactured in the company’s home country, and then they would be transported from Canada to European market by shipping. This trade approach helped the company minimize the risk and to experiment the new product. Hewlett-Packard could choose to handle all critical functions itself, and also it could contract these function to an export management company. For example, Brent Cartier is a special project manager in Vancouver. With the professional management team in Canada, he could make decision to adjust stock of ink-jet printer series to satisfy every European target clients. Therefore, the simply shipping goods avoided the cost of establishing manufacturing operations over the sea, and ...
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