11 November 2008

HP Case Analysis

In 1999, the hiring of CEO Carly Fiorina marked the beginning of organizational change for Hewlett-Packard. She was given the charge to make the company more relevant and marketing-savvy. A company founded in a garage--as many computer giants once were--Hewlett-Packard's tradition had been to offer products on the edge of scientific innovation. A company insider noted that HP had been "a company of engineers...that sold to engineers". That formula was no longer working.

To get the ball rolling, Carly Fiorina championed the idea to "preserve the best of HP and reinvent the rest". So began the transition of a product-company to one aspiring for customer focus.Fiorina started in 1999 with operational changes that she said would "once again capture the spirit of invention and apply it to solving customer problems and meeting customer needs".

The first major step of the branding strategy, though, came a few years later in the rebuilding of HP's value proposition. It was associated with the widely controversial merger with rival Compaq Computer Corp. The value proposition of the "new HP"--as the company was called post-merger--was to offer a unique combination of high technology, low price, and superior customer experience.

To realize such a value proposition, the new HP had to re-write its brand story. Fiorina and Chief Marketing Officer Mike Winkler knew though, that the company itself was only one of numerous authors of the brand story. The other important authors that HP hoped to bring on board were the customers themselves, and their beloved pop culture.

Fiorina, addressing the company's authorship first, directed the creation of a new global branding organization to unify marketing efforts. Previously, marketing was extensively localized, with no central tracking of spending. The new approach--it was hoped--would seed a common brand image for the clarification of the consumer. Operation OneVoice was an initiative unrolled in 2002 to deploy the brand strategy internally and with key stakeholders. Winkler's shop wrote a platform for a cohesive HP voice, and it was crucial to obtain employee buy-in before looking outwards at the customer markets.

With an understanding of the new HP, the company authors of the brand story could start to make their impact on all customer "touch" points. Sales, support, advertising, product design, and conversational verbiage. The goal was for the switch from product superiority to experience superiority to start to take hold inHP's brand image. Mike Winkler explained, "what we wanted to do was address the emotional connections that customer had to the brand. HP wasn't loved".

So did the change to a customer-focused company work? Did HP's brand become a culture? Did customers' become authors in the intended brand story? What the company did to gauge this systematically was to periodically measure and evaluate its efforts, issuing surveys related to trends in buyer behavior, attitudes aboutHP's reputation value, and the emotional levels between the customer and the brand. Fiorina and Winkler held a positive outlook on the progress of the new HP's brand strategy, although as of 2004 Wall Street remained unimpressed. Trudging on, the CEO remains poised to continue looking to the customer and proportionally relating the HP value proposition.

The more important measure--really--is the daily conversation surrounding the purchase of a computer. HP may not have achieved Mac-status as far as being hip, however it is definitely relevant. The conversations I hear almost always have HP as a purchase option. It's a general fact that most folks caught up in the Windows parade have difficulty considering alternatives with proprietary Unix-based operating systems, like Apple. When Windows is the arena, HP is the brand which overwhelming get the "first look" when it comes to home- and small business computing. My uncle recently asked my advice on a new computer purchase. I told him Mac, laptop. He bought an HP desktop center. Why? To him, it's the company that is reliably innovative, affordable, compatible with his prior experience, and is a performance package which will enable him--as an "average" user--to create advanced content (edited video, photo collections) in a family-friendly way. That purchase was strongly influenced by brand story, a uniquely positioned experience.

HP is prevalent in store displays, print media (+HP campaign, the computer is personal again), and in the minds of consumers. I think that the brand meaning of the new HP has become sticky. And that's success.

REF: Deshpande, Rohit. "Hewlett-Packard (A)". Harvard Business School (2006): 16.


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