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Hewlett-­‐Packard  
Company  
4/29/2013  

Present  in  this  report  is  an  overview  of  Hewlett  Packard  Company,  better  known  as  HP.  HP  is  a  technological  
giant  in  the  Information  Technology  Industry.  Unfortunately  for  HP,  their  inability  to  adapt  to  changing  
markets  has  had  them  in  struggling  positions  in  the  past  few  years.        
 
Armin  Milak,  Ozzie  Marrero,  Amerlin  Burgos,  Dan  Fahey,  Alex  Skramstad  
https://sharepoint.uvm.edu/sites/bsadhp/SitePages/Home.aspx  
Hewlett-­‐Packard  Company  
Spring  2013  
 
Executive Summary
Hewlett Packard Company was founded in 1939 by Bill Hewlett & Dave Packard. The
company evolved from producing oscillators to producing various products such as computers,
printers, scanners, etc. Hewlett-Packard, more famously known as HP, has grown to become the
world’s largest producer of computers. In attempts to contend with competitors like Apple and
Dell, HP has invested billions of dollars in purchasing assets to combine with their current
possessions. These investments haven’t been transformed into profits, hence why HP has
accumulated over $30 billion in debt. Poor management in the last decade has proven to be a
major concern and liability with investors. Meg Whitman, former CEO of eBay, has been hired
along with other notable mangers to take over the marketing, financial and operational functions
of the business. 1
The financial state of HP in the past 5 years has seen a dramatic drop in overall market
value. Consistent drops in share values have led investors to pull money out of the company.2
The debt seems to just be increasing, while the overall profitability of the company is in the
midst of a downward spiral. With new management in place, HP has taken new approaches to
finance and marketing. Spending insurmountable amounts of money on advertisements, their
new storytelling concept is in place to reshape its marketing strategy. New commercials such as
the “the magic of touch,” and “make it matter,” are at the forefront of HPs new marketing push. 3

                                                                                                                       
1
 This  is  the  executive  summary  of  your  report.  The  first  paragraph  should  introduce  your  
company’s  history,  from  the  first  sections  of  your  report.  You  want  to  include  only  the  most  
important  and  relevant  information.  In  the  corporate  world,  the  executive  summary  is  at  times  
the  only  part  of  the  report  read.  It  also  provides  the  reader  a  reference,  if  they  desired  
refreshing  their  mind  on  something  they  read,  without  needing  to  re-­‐read  the  whole  thing.  
Include  things  such  as  threats  to  profits,  and  the  ways  the  company  is  addressing  those  threats.  
Make  sure  that  you  have  bits  and  pieces  of  each  section  in  your  report.    
2
 Notice  the  factual  format  of  the  summary.  The  majority  of  the  sentences  are  facts  pulled  
directly  from  the  report  itself.  Take  into  consideration  that  each  sentences  should  be  important  
in  regards  to  your  overall  mission  of  the  report.  For  example,  all  of  the  sentences  in  this  
summary  provide  facts  an  investor  would  like  to  know  if  deciding  whether  or  not  buy  stock  
from  this  company.        
3
 A  good  strategy  to  use  is  compiling  summaries  of  each  group  members’  individual  sections.  
Once  this  is  in  hand,  constructing  a  cohesive,  yet  informative  executive  summary  should  be  a  
breeze.  
1  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
In addition to a new marketing strategy, HP has been rigorously overhauling their IT
systems. The primary focus for the company is a more sleek and efficient operational system.
With how quick transitions to new technologies are made, HP is working day and night to try
and improve their adaptability. Ethical Conflicts within the company’s higher executives have
proven to be a setback in terms of the trust received by their consumers. HP settled a lawsuit for
their role in the allowance of pretexting, or sharing of information, and was forced to pay out a
substantial amount of money to the state of California. Although some states have no laws
against these practices, there is still an underlying responsibility for the company to maintain in
terms of their ethics. Although poor ethics may not directly affect profits, there is always a
chance for it to indirectly punish the company’s profitability. 4

                                                                                                                       
4
 Note:  Your  executive  summary  should  be  at  most  ONE  page.  With  the  addition  of  these  
footnotes,  the  executive  summary  in  this  report  went  over  1  page.    
2  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
Contents  
Introduction  .................................................................................................................................................  4  
Environment/Industry  Analysis  ....................................................................................................................  4  
Company  Description    ..................................................................................................................................  6  
Financial  Analysis  .........................................................................................................................................  8  
Recent  Marketing  Strategy    .......................................................................................................................  10  
Use  of  Information  Technology  .................................................................................................................  12  
Ethical  Issues    .............................................................................................................................................  14  
Conclusion  ..................................................................................................................................................  16  
Bibliography    ..............................................................................................................................................  17  
 

Hewlett-Packard Products

Note: The table of contents is AFTER your executive summary.


Including relevant pictures of products/services your company
offers is just an extra plus, and helps your audience understand the
types of things they produce and sell. It should be made using the
table of contents tool in Word.

3  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
Introduction5  

Since Hewlett Packard Company was first founded in 1939, they have produced
countless amounts of innovative and revolutionary products. The HP slogan for years has been,
“invent.” This slogan describes the founders of the company, but on the other hand doesn’t
match with the current route HP seems to be running on. With all of the success that comes with
being part of HP, it comes as a huge surprise that HP is currently struggling with its operations.
A changing market, a large debt, poor management, and more combine to create a serious
problem for Hewlett Packard in the coming years. 6
With the accumulated debt and the massive consolidation of the company to come,
reporters have pronounced the dimmest fates for HP.7 Judith Hurwitz of Businessweek magazine
said, “I believe that by the end of the decade (if not before), HP will either become a holding
company or be broken up and sold off” (Businessweek, Judith Hurwitz).8 Our group has put
together an analysis of 6 different components of the company to try and funnel down what has
gone wrong with HP in the last decade. The six categories used were an environmental/industry
analysis, a company description, a financial analysis, a recent marketing strategy, HP’s use of
information technology, and finally a look into ethical/environmental issues that have soured the
taste for Hewlett Packard’s products. 9

Environment/Industry  Analysis    
 
Hewlett Packard (HP) is and has been a diversified technology giant in the world today,
but continuing poor management may prove to be a cause for concern for investors and the
                                                                                                                       
5
 A  clear,  different  font  colored  footnote  appears  to  separate  sections.  
6
 Introduce  the  focus  of  your  report.  Here,  we  introduce  a  main  point  in  our  argument:  that  HP  
is  currently  not  being  as  inventive  as  they  have  been  known  for.    
7
 Here  is  a  powerful  statement  about  how  HP  seems  to  be  heading  into  a  downward  spiral.  This  
introduces  our  argument  that  we  believe  HP  needs  to  make  some  serious  changes  in  order  to  
survive  in  the  changing  market.    
8
 In  business  classes  Professors  will  ask  for  in  text  citations  along  with  a  reference  page.  From  
experience,  professor  wont  specify  the  format  desired,  but  will  require  consistency.  So  choose  a  
citing  format  and  stick  to  it.  
9
 The  last  sentence  is  a  place  where  a  transitional  sentence  is  needed.  Here,  we  listed  all  of  the  
sections/topics  that  we  were  going  to  be  talking  about.  
4  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
future of the company.10 Hewlett Packard lies in the Information technology industry. The
Information Technology Association of America defines Information technology (IT) as “the
study, design, development, application, implementation, support or management of computer-
based information systems.” With alliance to this, HP produces various types of computers,
printers, scanners, services, servers, and software. They are also a large provider of storage, and
servers, and are continuing to invest in cloud technology. As for the size of the industry, it is one
of the biggest in the world, and it has actually continuously grown over the years. By 2002, the
computing industry was worth a whopping $220 billion globally. The market for PCs, and
subsequent products and services is of a wide range and is truly a universal phenomenon. There
are markets all over the world, including personal use and business consumption for the products
11
that HP provides.
Porter’s five forces is a great tool for describing what the current information technology
industry looks like and what possible risks that they may have to endure in the future. 12First,
there are always competitors in each industry, and the rule applies to the IT industry as well. The
main competitors for HP are Dell, Apple, Accenture, and IBM. What sets HP apart from its
competitors is the company’s ability to provide packaged deals of computers, software, printers,
and scanners. Next, HP has one of the widest ranges of customer’s the industry has to offer. It
gives quantity discounts to many businesses and even large enterprises who love HPs ability to
provide full packaged deals of products. Following customers, HP holds leverage with its
suppliers because of the high quantity of products they require to fulfill its demand. When you
hold this kind of leverage that HP has, you have bargaining power over your suppliers and are
qualified to receive quantity discounts from them. Although they hold this leverage as a benefit,
there are threats in which they must take account of, like the threat of new entrants and the threat
of substitute products. The threat of new entrants is relatively low given the difficulty to compete

                                                                                                                       
10
 Like  any  paper,  topic  sentences  are  needed.  Here,  there  is  a  topic  sentence  identifying  HP’s  
place  in  the  technology  industry.  
11
 An  Environment/Industry  Analysis  section  is  a  key  topic  to  research  for  a  company  analysis.  
Find  information  such  as  how  big  the  industry  is,  who  are  the  company’s  competitors,  and  the  
types  of  products  that  coincide  with  the  industry.  
12
 Use  Porter’s  five  forces  to  describe  the  industry.  1.  Threat  of  new  entrant.  2.  Threat  of  
substitute  products  or  services.  3.  Power  of  customers.  4.  Power  of  suppliers.  5.  Intensity  of  
competition.  
5  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
with the reputation HP has built. It would take an extremely large investment to compete in the
computing industry because of the level of barriers that it holds. The biggest threat to HP is the
rising sensation of substitute products. Apple has produced the iPad and the iPhone. Along with
Apple, many other companies have introduced their own versions of this new small, portable,
touch screen computing device. Apps on mobile phones produce a large threat because they have
the ability to provide the same functionality of apps on computers, but at a cheaper price, and in
a smaller more portable form (Central Penn).

Company  Description  13  


 
Two close classmates from Stanford University, Dave Packard and Bill Hewlett, started
their business from a garage in Palo Alto, California in 1939. The first product they ever created
was called an oscillator, which is an electronic test instrument that tested sounds. HP’s first big
customer was Walt Disney, who purchased 8 oscillators used in the making of the movie
Fantasia (HP Labs). Hewlett Packard has grown into the largest IT Company in the world,
whiling employing over 350,000 people, and with establishments in over 170 countries on 6
different continents (HP Labs). HP’s corporate objectives are to “maintain customer loyalty,
profit, growth, market leadership, commitment to employees, leadership capability, and global
citizenship” (HP). 14After taking massive hits to their overall profitability (to be explained more
later on), HP hopes to erase these last ten years and turn things around for the next ten. In recent
years, HP has spent millions, even billions of dollars in purchasing assets. In an attempt to keep
up to date with the latest software, HP has accumulated a $30 billion debt from their various
purchases. This has proven to be their strategy, but it hasn’t worked out for the better in most
situations. They have struggled tremendously to be innovative enough in order to keep up with
their competitors.15 As they enter the decline stage of the product life cycle, they need to be more

                                                                                                                       
13
 Note  that  each  section/topic  is  clearly  divided  and  easily  identifiable.  Your  reader  should  
know  when  you’re  switching  topics.    
14
 Adding  in  the  corporate  objectives  of  the  company  in  the  company  description  section  is  a  
very  good  idea.  What  better  way  to  describe  the  company  than  by  providing  what  their  goals  
and  values  are?  
15
 Describe  the  company’s  current  position  financially.  Talk  about  what  they  are  struggling  with,  
how  they  are  trying  to  deal  with  it,  and  if  they’re  successful  in  their  attempts.    
6  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
innovative. As they move on in their business plans, they hope to utilize their assets in servers,
networks, and services to implement a large cloud computing service which they hope will
rebuild their struggling profits (Businessweek).
Currently, Hewlett Packard Company is run by CEO Meg Whitman, who was hired in
September of 2011. As CEO of eBay, she played an essential role in the expansion and success
of the company. One of Whitman’s first objectives as CEO was to combine HP’s printing and
computing services into one. 16Together the two services account for $65 billion in revenue.
Whitman explained this combination as a way to increase efficiency within the company and cut
costs of production, as well as decrease operational costs (Businessweek). HP purchased and
merged with Compaq in 2002, and to this date that has been the most successful business move
the company has made in the past few decades. This expanded the company’s ability to offer a
full package of items to its customers. 17 Whitman is reported to have forced former leader of
HP’s printing industry, Vyomesh Joshi, out of the company (AllthingsD). Business Week
magazine reported that the combination of the two product lines may eventually lead to woes for
investors because ultimately the two may not be a good fit together (Businessweek). In a report
from the Los Angeles Times, analysts believe that management has lost control over its
operations in recent years due to the drastic changes to management, and the company’s overall
ability to adapt to the worlds changing market (LA Times). The amount of internally developed
talent in HP has shrunk enormously over the past years. Until Carly Friorina was hired as CEO in
1999, all of HP’s past CEO’s and senior leaders were lifelong employees of the company
(Businessweek). That says a lot to the recent switch in organization and management of the
company. Although HP has acquired a great deal of assets in the past few years, the
management’s inability to implement them in a way that would provide growth and profit has
clearly been a problem. If HP continues with the practices it has employed for the past 5 years I
wouldn’t count on a comeback from the IT giant (Businessweek). Along with Whitman, Hewlett
Packard hoists a strong team of executives who are looking to turn the company’s fortunes
around. Marty Homlish, Executive Vice President and Chief Marketing Officer, has over 25

                                                                                                                       
16
 Find  some  information  about  their  current  leadership  and  talk  about  their  impact  on  the  
company.  Good?  Bad?  Potential  to  succeed?  
17
 Find  some  of  the  good  things  the  company  has  done  in  recent  years.  What  has  made  them  
money?  Is  it  still  making  them  money,  and  looking  back,  was  it  still  the  right  move  to  make?  
7  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
years of experience in marketing. 18 He spent 15 years with Sony and is responsible for unifying
the brand management of Sony’s different segments including PlayStation, Music, and pictures.
Catherine Lesjak, Chief Financial Officer, has 25 years of experience within Hewlett Packard, in
which she was responsible for the companies worldwide cash, debt, foreign exchange, capital
structure, risk management, and benefits plan administration. Bill Veghte, Chief Operating
Officer, has the responsibility to work closely with the executive council to oversee the
operational activities and overall success. Veghte has held senior leadership positions in
Microsoft, and has contributed greatly to the success and launch of Windows 7 (HP Labs).

Financial  Analysis  
   
When analyzing Hewlett-Packard over the past five years, the company has seen a
dramatic decrease in its overall market value. While quarter one for Hewlett-Packard in 2013
brought growth to the company, it is still not expected to make significant profits until 2014.
CEO Meg Whitman told CNBC that, “the financial results are going to have to underscore the
strategy and that’s why we have laid out this multiyear journey to basically be very clear to
people that we won’t see revenues accelerating until 2014” (Thompson 1). Profit margins, which
is the amount by which revenue from sales exceeds costs in a business, rest far below
Information Business Machines (IBM) and Apple who are two competitors in the same market.
19
Dell however is seeing almost an identical trend as Hewlett-Packard with almost a fifty percent
decrease in profits margins since 2011. 20
 
 
 
 
 
 
 
                                                                                                                       
18
 Describing  the  company  has  a  lot  to  do  with  describing  their  leadership.  
19
 Notice  how  the  entire  paper  is  in  a  really  factual  tone.  You  want  to  maintain  this  type  of  tone  
throughout  the  paper,  and  infuse  analysis  whenever  possible.  
20
 Talk  about  the  company’s  profit  margin  and  compare  them  financially  to  their  competitors.  
Are  they  doing  better  than  them?  Worse?  Why  is  the  company  struggling  to  compete,  or  what  
makes  them  better  than  the  competition?  
8  
 
Hewlett-­‐Packard  Company  
Spring  2013  
  Profit  Margin  
 
  30.00%  
  25.00%  
HP  
  20.00%  
  15.00%   IBM  
  10.00%   DELL  
  5.00%  
AAPL  
  0.00%  
  2009   2010   2011   2012   2013  
 
21

Having been founded in 1939, Hewlett-Packard has been able to make a notable name for
its self over the years. With that being said, massive companies such as Apple have entered the
market and developed new technologies that have caught the eyes of the average consumer.22
Big name companies combined with poor market adaptability have caused Hewlett-Packard to
lose some of its significance. As the return on assets and current ratio fall at a steady pace, this
company is wedged in a downward spiral. Debts and liabilities are increasing at a swift rate,
while assets are being sold off to fight their climbing debt. This in turn affects the current ratio,
which stands for the measure of whether or not a firm has enough resources to pay its debts over
the next 12 months.  
   
Current  Ratio  
Total  Assets  
 
$250.00  
 
3  
 
$200.00   HP     2.5   HP  
$150.00     2  
IBM   IBM  
  1.5  
$100.00  
DELL     1   DELL  
$50.00  
AAPL     0.5   AAPL  
$0.00    
0  
2009  2010  2011  2012  2013     2009   2010   2011   2012   2013  
                                                                                                                       
21
 There’s  nothing  better  than  a  graph  that  tells  a  story  without  words  when  reading  a  long  
report.  Add  in  multiple  graphics  showcasing  important  and  relevant  information  about  the  
company.  If  adding  in  a  graphic,  it's  vital  that  in  your  report  you  explain  what  you  want  the  
reader  to  know  about  it.  You  can’t  expect  the  reader  to  be  able  to  read  and  understand  the  
information  giving  in  graph  form.  
22
 Constantly  comparing  your  company  to  other’s  in  its  industry  is  a  good  way  to  show  
investor’s  how  the  company  stacks  up.  
9  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
 
The  technology  industry  is  advancing  at  a  debauched  pace  and  with  companies  such  
as  Hewlett-­‐Packard  falling  behind;  it  will  be  very  hard  to  make  its  way  back  up  from  the  
bottom.  When  looking  at  the  graph,  Hewlett-­‐Packard  has  seen  a  dramatic  decrease  in  net  
income.  What  can’t  be  seen  on  this  year-­‐to-­‐year  graph  however  can  be  seen  on  the  monthly  
graph  for  2012.  Throughout  the  months  of  July  to  October  Hewlett-­‐Packard  saw  net  income  
plummet  to  negative  eight  billion  eight  hundred  and  five  million  dollars.  This  shocked  the  
company  sending  thousands  of  employs  home  without  a  job,  and  Hewlett-­‐Packard  into  a  
continuous  flow  of  debt  desperately  trying  to  fix  what  had  gone  wrong.  However,  in  recent  
years  Hewlett-­‐Packard  as  seen  its  profit  margin,  net  income,  assets,  and  liabilities  steadily  
come  back  from  their  negative  margins,  giving  hope  to  investors  and  employees  of  the  
company.  
 
 

HP     Net  Income   HP  Net  Income  


   
(Monthly)  
3  

5    
2  
 
HP   0  
1   Jan.   Apr.   Jul.   Oct.   Jan.    
HP  
-­‐5   2013    
0  
2009   2010   2011   2012   2013   -­‐10  
 

Recent  Marketing  Strategy  23  


 
The recent forecast for personal computers has been grim. Companies in this market have
seen their fair share of declining sales as well as falling stock prices in recent months while the
mobile and tablet markets flourish. That being said, HP has taken the biggest hit so far out of its
competitors with a daunting 24% decline in PC shipments in the first quarter of 2013 compared
to 2012’s first quarter (Fool, 2013). Interestingly enough, HP has recently spent approximately
                                                                                                                       
23
 What’s  the  company  doing  to  sell  its  products?  Including  a  section  about  marketing  strategies  
is  vital  to  understanding  the  success  or  failure  of  a  company.    
10  
 
Hewlett-­‐Packard  Company  
Spring  2013  
 
$1.2 billion in advertising alone in almost all forms of promotion varying widely from cable TV,
internet ads, to outdoor billboards (Advertising Redbook, 2013, p. 438). 24This vast amount of
advertisement spending comes as no surprise considering HP is trying its best to recover and
reinvent its image into a company that can change with the market. 25
Hewlett Packard has adopted the interesting concept of storytelling to reshape its
marketing strategy and has defined three market segments it wishes to target including,
households, small to medium businesses, and large enterprises (Fernandez, 2009). 26The
objective of this change is not only to inform people of the functionality of the product and its
cost, but also engage the audience and get them interested by entertaining them. The stories HP
attempts to portray are geared toward being relatable to consumers’ everyday lives (Fernandez,
2009). This, in theory, will hook consumers and allow them to consider HP over other companies
because psychologically, consumers would feel HP knows what a normal everyday person needs
out of a computer. That being said, HP understands the growing mobile and tablet markets and
have taken strides to adapt to the business environment.
One of HP’s most recent commercials titled “the Magic of touch” succeeds at telling a
story while also stylishly showing off its notebook/tablet hybrid. The commercial is short,
engaging, and last but not least, informative about an interesting product. HP must be forecasting
the product life cycle of PCs as being in the late stages of maturity and thus, there must be a
change in the product being sold in order for revenues to rise once more. This is a step in the
right direction, yet hopefully this adaption did not come too late. Companies like Apple and
Android have had a multitude of different tablets over the years and hopefully it isn’t too late for
HP to catch up in this market and gain a foothold. One key feature this tablet has over others is
its duel functionality as a notebook as well as being a tablet. HP has reinvented the tablet into
something very intriguing and only time will tell whether this innovation will bring in the much
needed revenue or further hinder the rebound of the company. Another example of their new
story telling promotional strategy doesn’t even try to sell the consumer a specific product but

                                                                                                                       
24
 What  kind  of  money  has  the  company  spent  on  advertising?  On  research  and  development?    
25
 Here  you  see  again  this  reoccurring  theme  we  have  about  HP’s  inability  to  change  with  the  
market.  Remember  that  your  report  needs  a  focus,  and  remember  to  stick  with  it  throughout.  
26
 Topic  sentences.  Yes  they  do  still  matter  in  business  writing.  Here,  the  topic  sentence  clearly  
shows  that  the  rest  of  the  paragraph  will  be  about  this  new  “storytelling”  marketing  strategy.    
11  
 
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inspires the consumer to “make it matter”. This commercial has multiple scenes of people living
their lives, working hard to accomplish an objective, and even a doctor helping out a poor
community. The commercial makes the consumer feel as if they can “make it matter” by
27
allowing HP to help them reach their goals however big or small.

Use  of  Information  Technology    


 
  Hewlett-Packard is one of the leading companies that specialize in information
technology and more specifically big data solutions. Spending over one billion dollars, the
company recently began developing their own data warehousing solutions (Henschen 14-16).
This new move is a risky investment due to the rapidly changing technology of data storage.
With competitors such as Cisco and IBM already deep in the IT environment, Hewlett-Packard
may have difficulty penetrating the market. However, HP has reported great success in their
development of new data warehousing techniques that allow business to cut costs while raising
the speeds of their systems (Analyzing More Data Faster). HP could hold the key to the most
efficient new wave of operational strategies at its feet.
Over the past three years Hewlett-Packard has been doing a complete overhaul of their IT
systems, and this ongoing project is aimed to reduce their 85 data centers to a sleek and efficient
six. (Foley 30-35) HP has been working for over two years to be able to position the company to
penetrate the data warehousing technology market (Foley 30-35). Many companies find that they
are unable to compete because of how costly this sector can be, as the technology is extremely
expensive to research and produce. Furthermore when the technology is actually developed, it
could already be out of date and behind competitors’ products (Foley 30-35). Since researching
and specializing in data storage is extremely difficult, it can be very expensive. Developing data
warehousing technology requires large and well-funded companies such as HP to create and sell
the technology, hence why Hewlett-Packard continues to ripen and vend their technologies to
other companies and consumers (Foley 30-35). HP will go to their customers’ businesses where
                                                                                                                       
27
 What’s  the  significance  of  their  strategies?  Are  they  working?  Analyze  the  strategy  and  try  to  
grasp  the  meaning  behind  it,  and  the  company’s  goal  with  the  implementation  of  the  strategy.  
12  
 
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they will install their equipment and show said companies how to run large data systems more
proficiently and resourcefully (Analyzing More Data Faster).
HP has broadened their ability to implement and use their new technology to help
streamline businesses that need to store and access large amounts of data. Hewlett-Packard
specializes in upgrading the existing Microsoft SQL server technology, a service developed by
their partner Microsoft (Foley 30-35). HP says that their objective is to “consolidate
infrastructure supporting business intelligence data warehouse to improve performance and
reduce cost” (Analyzing More Data Faster).28 HP reports that they have been able to create the
speed of their time of value (initially the processing speed) to be fourteen times faster than what
is considered the standard in their industry (Analyzing More Data Faster). They have also
reported a thirty percent power savings and a fifty percent decrease of required staff to support
the data warehouses (Analyzing More Data Faster). Hewlett-Packard boasts that their
technology creates a “twofold increase in productivity” due to the implementation of new
technology inside of their data warehouses (Analyzing More Data Faster).29
Technology, especially data warehousing technology, has a particularly low life span.
The industry innovates so often that many firms come and go over night and that it does not take
long for a company’s technology to be rendered obsolete (Foley 30-35). Hewlett Packard
recognizes this and often guarantees a four year lifespan of their data warehousing technology
(Analyzing More Data Faster). The company also recognizes the problem with data warehouses
quickly being outdated stating “although the data warehouse proved very useful, IT was
challenged to scale its underlying infrastructure” (Analyzing More Data Faster). HP reports that
on average their incoming data volumes increase by four terabytes each year like clockwork
(Analyzing More Data Faster). This increase in data quickly overtakes the existing data
warehouse and requires improvements to be made. HP offers what they call “scalable solutions”
that last for four years (Analyzing More Data Faster). These “scalable solutions” are basically
four year plans that help HP keep their data warehouses able to properly cope with the increasing
demand for data storage (Analyzing More Data Faster). Scalable solutions help keep HP ahead

                                                                                                                       
28
 Just  like  in  any  paper,  the  use  of  quotes  is  very  valuable.  You  want  to  insert  the  quote,  and  
then  explain  the  relevance  and  significance  of  the  statement.    
29
 With  the  ever  expanding  IT  world  we  live  in,  it’s  valuable  to  add  in  how  companies  are  using  
Information  technology  and  how  it  is  helping  their  businesses.    
13  
 
Hewlett-­‐Packard  Company  
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of the curve, they predict how technology will advance and how there will always be new
demand for more data storage. Hewlett-Packard’s new data warehousing technology addresses
the increasing demand for data storage in a time where technology changes so quickly it is hard
to keep up.30

Ethical  Issues  31  


 
As part of their mission statement Hewlett-Packard states that, “HP aims to always act
with uncompromising integrity, whether dealing with our suppliers, partners, employees,
customers, or society more broadly. Our shared values guide us to behave ethically and in
compliance with the law and to respect the rights of all our stakeholders...” (Hewlett-Packard
Development Company, 2011).32 The company places a lot of emphasis on living up to its
ethical standards. With accordance to that statement it is hard to believe that such standards did
not deter certain individuals within the company from acting in an unprincipled manner. HP
violated laws, their principles, and their ethics, hence why it wasn’t too long before the spying
scandal which took place within HP broke out into the public in 2006. The violations became
evident due to being involved with invasions of web related privacy that are considered to be
illegal.
The main spying technique involved in the case was pretexting, which consists of
obtaining personal phone records from company employees and manipulating employees
through false emails to obtain information. Investigators had been hired to pose as reporters and
company directors in order to confirm suspicions on how certain employees were leaking
confidential information to the media. At the center of the scandal was Patricia Dunn who was
chairman of the company at the time. Dunn was the person who enabled the investigation to take
place, after most board members expressed that such measures were necessary. Even after being
                                                                                                                       
30
 Why  should  companies  invest  in  IT?  Technology  is  always  changing,  so  it’s  important  for  
companies  to  stay  up  to  date  within  their  industry.  What  is  the  company  doing  to  make  sure  
they  keep  up?  
31
 Many  companies  have  been  immersed  with  allegations  of  ethical  issues,  so  having  a  section  
about  your  company’s  ethical  issues  can  provide  a  chance  for  you  to  explain  why  they  
participated,  and  also  a  chance  to  either  defend  or  attack  the  company’s  decision.    
32
 Most  companies  have  mission  statements  in  relation  to  ethics:  adding  it  at  the  beginning  can  
shape  the  way  your  section  is  written.    
14  
 
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taken to court, Dunn refused to take responsibility for her actions and was lucky enough to plead
not guilty. Even though Dunn recently passed, up until the date of her death she would victimize
herself making it seem as though she fell into a trap set up by the company.
Someone who actually did take some responsibility for the matter was Mark Hurd, CEO
of the company at the time, since he felt shame in allowing for these unethical activities to occur.
Hurds’ actions were brought to the attention of the media when the Washington Post reported
that along with Dunn, Hurd had carried out a deceptive operation in order to discover which
journalists were receiving private company information. More importantly, he wanted to know
which company employees were the ones providing it to them. When testifying before the
members of the House Energy and Commerce Committee subcommittee, Hurd admitted that he
should have been more attentive to what was going on since there were several questionable
activities he failed to give proper attention to.
Quoted in  Journal of American Academy of Business, it is reported that at the end of
2006, “HP settled a lawsuit by the California attorney general for $14.5 million over HP's use of
private detectives to obtain private information pertaining to board members and journalists”
(Stanwick). A few months into the following year felony charges against Dunn had been
dismissed by a judge in the Santa Clara Superior Court. Dunn expressed how alleviated she was
that the matter had finally been resolved. Dunn had already been fired from the company before
any court settlements were even made, thus leaving Hurd to take over her position as chairman
while also undertaking his own position as CEO. Through this seemingly everlasting process, it
came as such a shock when negative attention was once again brought to the company due to the
actions of Hurd; an investigation related to sexual harassment had arisen. Both investors and
board members then announced that Hurd would have to step down as chairman and CEO due to
the investigation involving a female marketing contractor, Jodie Fisher. 33
Some might argue that the pretexting techniques involved in the case were not as terrible
as they were made out to be due to the fact that there is a lack of regulation on laws involving
pretexting. However, the location of HP is what made the company resort to illegal matters.
When used for purposes of identity theft, pretexting is clearly stated to be illegal according to
                                                                                                                       
33
 State  the  issue,  and  then  state  the  outcome/consequences  faced.  Was  it  a  huge  blow  to  the  
company’s  image?  Or  did  it  blow  over  quickly  and  not  impact  their  reputation?  Were  there  any  
financial  consequences?  Who  took  the  blame  for  the  company,  and  what  happened  to  them?  
15  
 
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United States Government's Gramm-Leach-Bliley Act. Conversely, this document makes it
unclear whether a corporation legally pretexting phone records is legal or not. The reason HP
was scrutinized for it was due to the loose interpretation of the Act not applying to HP. The
reason being that under California state law, pretexting in general is illegal. This was not a
favorable situation for HP since their corporate headquarters is located in Palto Alto, California.  

Conclusion34  
 
  As a group, we have come to the conclusion that Hewlett Packard is no longer a company
that has high opportunities for investment. The stock, haven fallen $2 in the past week alone,
seems to be on a steady decline. Their debt, of over $30 billion, is one that will take years and
years of excess profits to pay back. HP’s lowering profit margins will continue to give
management trouble figuring out how to pay all the operational costs and chip away at that debt.
The consolidation of the company should decrease operational costs and increase profits
margins, but in the long run we believe that the company will make fatal attempts to adjust to the
market and face horrid financial times which may force the company out of business. 35The
management in place right now has the experience to be able to pull it off, but we believe HP
will have a lot of work to do to catch up to the rest of their competition. We conclude that HP is
a not company that you should consider for investment, at least for the time being. For
investor’s, the best strategy would be to wait and see what Hewlett Packard has planned for the
rest of 2013 and 2014.
 
 
 
 
 

                                                                                                                       
34
 With  every  report,  the  inclusion  of  a  summary  conclusion  is  vital  to  the  success  of  your  paper.  
Leaving  the  reader  with  a  short,  but  sweet  conclusion  can  really  enforce  or  reinforce  the  point  
you  were  trying  to  make  in  the  report.  The  reader  can  say  with  confidence,  “Oh  so  this  group  
wouldn’t  recommend  any  investment  in  this  company.  ”Make  it  short  and  sweet,  but  effective.  
Recap  the  most  important  information  from  your  sections  and  conclude  with  some  advice  for  
people  who  are  debating  whether  or  not  to  invest  in  the  company.    
35
 Note  here  that  we  included  another  statement  about  how  HP  struggles  to  adapt,  and  how  
that  ultimately  may  lead  to  their  demise.  
16  
 
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Bibliography  36  

Library References:37

Advertising Redbook. Comp. Redbook, LLC. Summit: Red Book LLC, 2013. 438. Web.

Fernandez, J. (2009). HEWLETT-PACKARD: HP takes a leaf out of Disney’s


storybook. Marketing Week, , 14-18. Retrieved from
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Peter Waldman and, D. C. (2006, Sep 29). Probing the pretexters; congress grills
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Piller, C. (2000, Nov 14). HP's disappointing 4th-quarter earnings hit company's shares;
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Stanwick, P. A., & Stanwick, S. D. (2011). The role of corporate culture in the unethical
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36
 As  with  most  reports,  you  need  to  include  a  reference  page.  Make  sure  you  ask  your  
professor  the  reference  style  they  require.  
37
 Splitting  up  your  bibliography  into  Library/online  sections  is  a  great  way  to  show  your  
professor  you  dug  deep  when  researching.    
17  
 
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Foley, John. "Exclusive INSIDE HP's DATA WAREHOUSE GAMBLE."


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 The  split  is  shown  here,  where  online  references  begin.  
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