17 May 2012

Viewpoint : The Blog

Why the PC business is chained to Hewlett Packard

Published:: 01 November 2011
Article Type:: Viewpoint
Byline:: Malory Davies

When Hewlett Packard announced that it was selling its personal computer business back in August, chief executive Léo Apotheker explained that HP future strategy would be “built on cloud, solutions and software to address the changing requirements of our customers, shaped heavily by secular market trends that are redefining how technology is consumed and deployed”.

It was a significant move because HP is reckoned to be the biggest maker of personal computers in the world with sales of $40.7 billion last year.

But, only a month later Apotheker had left the company. He was replaced by Meg Whitman who has now completed an evaluation of the strategic alternatives for the division, formally named the Personal Systems Group, and decided that it must stay with HP.

And it turns out that a key factor in that decision was the high level of supply chain integration between PC division and the rest of HP.

In a statement last week HP said: “The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value.

“Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.”

It highlights a different dimension of the supply chain – more than just a network of links – it can also bind an organisation together.

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