Hewlett-Packard (Canada) Ltd - Consumer
Electronics - Canada
Hewlett-packard (canada) Ltd
Strategic Direction
·
In recent years,
Hewlett-Packard has expanded beyond its traditional role of supplying computers
and printers and is now being increasingly recognised by Canadian consumers as
an important supplier of digital cameras, photo printers and televisions.
·
Recently, the company was in
the news because of illegal activities involving the investigation of
high-level leaks of confidential HP information. While the media scrutiny has
so far not had any great impact on retailer or consumer sentiment, the company
is no stranger to high-level controversy. Hewlett-Packard’s former CEO, Carly
Fiorina, was forced from her position in 2005 and replaced by Mark Hurd.
·
While Miss Fiorina left her mark
at Hewlett-Packard largely through her controversial acquisition of Compaq in
2002, Mr. Hurd was quick to announce a major cost-cutting initiative at HP,
which has so far proven successful in bringing the company’s costs closer to
those of its competitors.
Key Facts
|
Full name
of company:
|
Hewlett-Packard
(Canada) Co
|
|
Address:
|
5150
Spectrum Way, Mississauga, Ontario
L4W-5G1 Canada
|
|
Tel:
|
+1(905)
206-4725
|
|
Fax:
|
+1 (905)
206-4739
|
|
WWW:
|
www.hp.ca
|
|
Activities:
|
In-home and
portable consumer electronics
|
Source: Euromonitor International from
company reports, trade press
|
|
2003
|
2004
|
2005
|
|
Net sales
(Canada)
|
C$3.0
billion
|
C$3.1
billion
|
C$3.5
billion
|
|
Number of
Employees (company-wide)
|
142,000
|
151,000
|
150,000
|
Source: Trade press, company research,
Euromonitor International estimates
Note: Net sales for Canada are
estimates
Company Background
·
Hewlett-Packard (Canada) Co,
was established in 1961, and is a wholly owned subsidiary of California-based
Hewlett-Packard Company. The company is primarily involved in four business
groups in Canada including customer solutions, imaging and printing, personal
systems and technology solutions.
·
A major turning point for the
company was its May 2002 acquisition of leading rival, Compaq Computer. The
acquisition helped HP significantly expand its product and service offerings,
while improving its competitive position in the Canadian market.
·
Hewlett-Packard’s Canadian
operations generated an estimated C$3.5 billion in revenue in 2005. Overall,
the company’s revenue in 2005 reached US$86.6 billion. The Compaq purchase was
a key factor behind Hewlett-Packard’s dramatic increase in its overall revenue
since 2001, which stood at US$45.2 billion.
·
Part of the company’s recent
financial success stems from Hewlett-Packard’s decision in July 2005 to
restructure the company, which included the eventual termination of 14,500 jobs
worldwide. The company claimed that this move would save US$1.9 billion
annually and bring costs closer to those of its competitors.
Production
·
With Hewlett-Packard’s
September 2006 acquisition of Calgary, Alberta-based VoodooPC, HP will for the
first time be manufacturing high-end gaming PCs in Canada. Hewlett-Packard will
form a separate business unit within its Personal Systems Group focused on the
gaming industry. The company also plans to maintain VoodooPC's current
distribution model and brand name along with its marketing, sales, support and
development operations.
·
Other Hewlett-Packard products
available in Canada are imported primarily from the US and Asia.
|
Location
|
Brand
|
Annual
production
|
|
Calgary, Alberta
|
Voodoo
|
n/a
|
Source: Trade press, company research, trade
interviews
Competitive Positioning
·
Over the years, Hewlett-Packard
and its archrival Dell have battled for top spot as the leading computer
supplier in the world. Hewlett-Packard surpassed Dell as the leading shipper of
computers worldwide during the third-quarter of 2006. However, Dell retained
its lead in Canada due to its strong position in the corporate market even
despite the company’s recent troubles with laptop battery recalls.
·
Hewlett-Packard’s acquisition
of Canadian-based VoodooPC in September 2006 is intended to position HP as a
major player in the growing gaming PC market. The move pits HP directly against
Dell, which recently purchased Miami-based Alienware, a maker of high-end gaming
PCs. Although representing a niche segment of the industry, these high-end
computers offer high margins.
·
Looking to expand its strong
brand name into the wider consumer electronics market and to take advantage of
the growing demand for flat panel televisions, Hewlett-Packard announced in
August 2004 that it was entering the television market. A particular feature of
HP’s television strategy is the inclusion of Wi-Fi networking, which can
wirelessly connect with the home computer and play stored videos,
high-definition television shows, digital images, and music. The MediaSmart
television is being exclusively offered by Best Buy Canada along with other HP
brands. HP hopes its wireless television strategy will help to differentiate
its televisions from the hundreds of models already on the market.
·
In the digital camera arena,
Hewlett-Packard is trying to market the complete photo experience to consumers.
The company refreshed its line of digital cameras in 2006 with a variety of new
models, including its first ten-megapixel camera. When it comes to printing
photos out, HP is offering a variety of options, including its own brand of
photo printers and the growing retail presence of HP-branded in-store kiosks.
·
The declining PDA market forced
Hewlett-Packard into the growing smart phone segment with its iPAQ brand. The
company showed that it can match the quality and features of the numerous
mobile phone models available on the market. For example, HP’s new iPAQ hw6515
Mobile Messenger offers wireless e-mail, mobile phone capability, GPS
technology, a built-in keyboard, Wi-Fi, Bluetooth and a built-in digital
1.3-megapixel camera.
|
Subsector
|
Share
|
Rank
|
|
Computers
|
3.9%
|
3
|
|
Cameras
|
7.4%
|
6
|
|
Portable
Computers
|
30.2%
|
2
|
Source: Trade press, company research, trade
interviews, Euromonitor International estimates
