After spending $19 billion in 2002 to buy Compaq Computer, $1.8 billion to buy Palm in 2010, and investing in money-losing tablets and smart phones this year, Leo Apotheker, the new CEO of HP wants to sell their core business?
When you think of HP what brand image immediately comes to mind? PC’s, laptops, printers – right? They are the world’s largest PC manufacturer. It’s what sets them apart from their competitors and is encapsulated in their value proposition. No wonder the stock went down 20 percent on the restructuring announcement.
Just the thought of it makes you wonder – what’s the plan? Surely customers will now look elsewhere, which will further devalue the brand for potential investors.
What’s left? Printers and ink cartridges? Wasn’t the bundling of printers with computers what made HP what it is? If you take the PCs away ($30 billion of HP’s last nine months revenue of $95 billion), not only would there be a giant loss of revenue, but also an impact on ancillary sales of printers.
What was Leo Apotheker thinking when he made his announcement? What will be the value proposition of the new HP brand? Another IBM – how can that happen?
Just the thought of the transformation plan (whatever that is) is fraught with risk, certainly protracted, and costly. Given HP’s current challenges, this announcement could not have come at a worse time.
Since Apotheker has only been in the CEO chair for 10 months, how could the board go along with this poorly timed announcement? Without a buyer, or a clear plan, HP has instantaneously diluted the value of the brand and set in motion an all too familiar scenario.
The introduction of the iPad signaled the demise of the PC. However, the market leaders in PCs — HP, Dell, and others, continued to invest heavily in PCs and laptops instead of embracing this obvious new innovation.
What we have today is a rapidly aging market for PCs with razor thin margins for what has become a commodity product. Likewise, the introduction of the iPhone set in motion a race for dominance in the smart phone market.
HP finds itself way behind the technology curve on both fronts and has already thrown in the towel on its feeble attempt at a smart phone and tablet. Given the dynamics of the market for computer-like tablets and smart phones, and the weak economic situation for the next few years, HP is now in a precarious position.
If the traditional wisdom of the Wall Street analysts holds true, with this announcement HP has positioned itself to be a has-been. Even if HP sells its PC business it will be left struggling to devise strategies to compete with market leaders IBM, Oracle, and Cisco, who are light years ahead of HP in their respective markets. For example, IBM in technical services, Cisco in computer networking equipment, and Oracle, IBM, and SAS in business software.
Unfortunately, Leo Apotheker is another CEO without a plan!
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
