Strategic Management Report: Hewlett Packard Vietnam Market Expansion

This report provides a strategic analysis of Hewlett Packard's potential entry into the Vietnamese market. It begins with an executive summary, followed by an introduction outlining the company's background, business drivers, and competitive landscape. The report uses frameworks such as the Ansoff Matrix to recommend diversification as the optimal strategy, and identifies key issues like political sensitivity and infrastructure limitations. It explores various market entry alternatives, with a Joint Venture with a local partner being the preferred strategy. The report details the core competencies of HP, evaluates the chosen strategy's risks, and proposes a contingency plan. It concludes with recommendations and a comprehensive overview of the challenges and opportunities associated with HP's expansion into Vietnam, offering a detailed assessment of the company's strategic approach to this new market. The report also includes a SWOT, PESTLE, Porter's Five Forces, BCG Matrix, and competitive analysis to provide a comprehensive overview of the market.

Strategic Management

EXECUTIVE SUMMARY
The following report is based upon Hewlett Packard which is a multinational IT
company. The company is running at the top position in market place. To continue its growth
and expansion, the management of this firm is now considering to carry out expansion within the
confines of Vietnam. For this purpose, the major problem in front of it is “What strategies should
Hewlett Packard Company adopt in order to start doing business in the Vietnam market?” The
application of Ansoff matrix portrays that diversification would prove to be the best strategy for
this enterprise while facilitating expansion in new market. The key issues that would be faced by
the organisation during entering into Vietnam are sensitive political atmosphere, Changing
Foreign Exchange and investment regulations, Expensive and inefficient telecommunication
infrastructure, Uncertain growth of IT sector in the region and Recent inflation still affecting the
Vietnam economy. There are a number of alternatives available to HP such as JV with Local
Partner, Independent partner and Franchising. Out of these, JV with local partner is identified to
be the best strategy for the company.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
Background (main points and not more than 1 page).................................................................1
Business Drivers (key points that drive the business).................................................................2
Competitive Analysis..................................................................................................................3
Ansoff’s Strategic Opportunity Matrix.......................................................................................4
Core Competencies.....................................................................................................................5
Problem Statement (ensure it is accurate, concise, and very clear)............................................6
Key Issues (Top 5 in order of importance).................................................................................7
Identification of Alternatives (List in order of priority)..............................................................7
Evaluation of Alternatives...........................................................................................................7
Implementation...........................................................................................................................8
Recommendations/Conclusions..................................................................................................8
Evaluation and Risks of Recommended Strategy.......................................................................9
Contingency Plan........................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
The present project is based upon the case study analysis of Hewlett Packard. This is a
multinational company engaged in IT sector and based in Palo Alto, California, USA. The case
study reflects that, a subsidiary of HP named Hewlett Packard Asia Pacific is looking upon the
booming IT sector within the confines of Vietnam. The management is looking upon the pros
and cons associated with the move so as to take the best decision in the favour of concerned
corporation. HP offers an array of hardware and software to clients, regardless of their size and
even includes clients pertaining to health, education and political industry.
The below mentioned project seeks to explore the background, business drivers and
competitive analysis of the concerned company. Furthermore, the report also includes BCG
matrix, VRIO and Ansoff Matrix with a view to gain knowledge of the internal environment of
the company. Besides this, a problem statement is laid down depicting the actual concern of
corporation that the project is seeking to address and resolve. In addition to this, key issues,
alternatives and their evaluation is covered. Apart from this, conclusion and recommendations
are given along with the risks associated with the strategy suggested to the corporation. Lastly, a
contingency plan is included to deal with the instances whereby one or more of the things go
wrong as per the company’s plan.
Background (main points and not more than 1 page)
John Peter who is the marketing manager within Hewlett Packard Asia Pacific (HPAP) is
seen making a number of evaluations within the case study. He is taking into consideration the
strategic long term investment option of starting operations within the confines of Vietnam
looking upon the rapid growth and success of IT sector within the region. Prior to setting up
operations within the concerned region, John considers it important to take a look upon the key
environmental factors that can place significant impact over the operations of respective business
organisation. In this regard, the case shows the historic, economic and political environment of
the nation in terms of its stability. Also, it is important to gain knowledge of the present
manpower so as to find the best candidates for working in the factory within Vietnam. Apart
from this, the investment regulations as well as foreign exchange are considered important for
analysis to ascertain whether or not the Vietnam is open to international market. Additionally,
services such as financial, communication, utilities and many others have been looked upon in
1

the case to gain knowledge of the environment of Vietnam. To gain effective understanding of
the environment of respective country, John has taken the decision to visit the nation and fix a
meeting with a local experience Director. The meeting is fixed to ascertain the best possible
solution for HPAP through which it can effectively start doing its business within Vietnam. It is
further recognised that the best way to gain entry in to Vietnam is by leveraging Joint Venture
(JV) as the strategy to collaborate with local businesses and expand business networking as well
as reach.
Business Drivers (key points that drive the business)
 Extensive market presence: The respective corporation at present possesses several
outlets across the globe. The large numbers of outlets are further backed up by extensive
and strong distribution network through which HP ensures the delivery of products and
services to customers at large in market place.
 Low cost structure: The concerned entity ensures the maintenance of a low cost
business operations structure so as to facilitate production at a low cost. The products are
then further sold at low prices only with the sole motive of making them affordable for
public at large. This aids the entity in gaining the attention of a large number of persons
and retaining them for a long period of time by providing them with high quality
offerings.
 Strong networking: Hewlett Packard, the renowned multinational company, maintains
strong and healthy networking with its dealers. This relationship prevailing between both
the parties aid the company to procure supplies at reasonable prices.
 Automation: HP has executed automation of a number of stages of manufacturing in
order to ensure effective utilization of resources and completion of tasks in due course of
time. The automation of process even allows the entity to ensure consistency in terms of
quality of the organisational offerings provided to public at market place. This renders the
entity with option as well as ability of scaling up and down the production in accordance
with the demand prevailing at marketplace.
 Diversity of manpower: HP is home to employees belonging to diverse set of
geographies and cultures. This presents the concerned corporation with the opportunity to
come up with unique and market disruptive ideas through which the positioning and
image of the brand can be effectively enhanced.
2

 Social Media: Hewlett Packard is acknowledged to possess a strong presence over the
different platforms of social media. The main 3 platforms over which its presence has
contributed in the growth of company are considered to be Facebook, Twitter, Instagram.
It has high levels of customer engagement on these platforms with low customer response
time.
Competitive Analysis
HP is a top company operating within the confines of IT sector. However, it is analysed
that the company faces massive competition within this industry as large number of
organisations are currently functioning within this sector. In this regard, it is analysed that VAIO,
MacBook Air, Lenovo and Toshiba are its competitors in luxury, high tech and easy to use
section. On the other hand, companies which are affordable and pose threat to the positioning of
HP are Acer, Dell, EEE-ASUS.
3

Ansoff’s Strategic Opportunity Matrix
Ansoff matrix is determined as the effective strategic framework which helps company is
taking rightful business strategy in order to grow their business in rightful manner. This
framework is mainly consisting of 4 strategies which suggest companies in attaining success
with its incorporation effectively. Along with this, it can be later said that this framework also
provides suggestion to business manager in improving their business performance and attaining
organisational goals and objectives quickly that leads out quicker business success. With
reference to HP, all of the covered strategies belonging to this framework are mentioned below
in company context:
Market penetration: This strategy simply states that businesses can effectively attain
success by offering their existing product within the existing market place. This is determined as
the most effective one among all which helps company in improving market share by
improvising their sales performance. In context of HP, it can be said that if the company wants to
attain success in more quicker manner than they can go for this strategy by identifying niche
customers within the existing marketplace. This is quite easier strategy for this company as they
are having knowledge about their customers as well as products. This will directly helps them
out in improving their sales performance which leads to enhancement of the profitability as they
are attaining organisational goals in rapid manner.
Market development: This is the second strategy which states that if business wants to
grow their business effectively then they must develop their business in the new market place.
This simply means that the company is required to offer its existing product at the new market
place for attracting more number of customers towards them and enhancing their sales
performance as well as profitability in rightful manner. In context of HP, it can be said that this
company can easily acquire this strategy by entering into new business with the similar kind of
offering. Here, this can be provide quick success to the company as they are familiar about their
already successful products and can easily convince new customers towards the same by
showing its importance to its customer and influence them to make purchase from the same
company.
Product development: According to this strategy businesses are required to sell new
product within the existing marketplace in order to attain success in rightful manner. With
reference to the HP, it can be said that its manager could acquire this strategy by introducing any
4

new product within the existing market place only. This can be effectively done by conducting
market research within the same market zone in order to develop understanding over changing
demand and expectations of the customers from the company so that they can develop new
products as per the customer’s requirements. Incorporation of this strategy provides range of
options to the customer which influences their interest to make purchase from the same
company. This improves sales performance as well as profitability of the company in quicker
manner.
Diversification: It simply states that if businesses want to attain successes or grow their
business then they must enter into a new market place with completely new product. This
provides range of opportunities to the businesses as they are getting opportunity to approach
more customers and can easily convince them to make purchase as their offering product is of
high quality. This is determined as the most riskiest strategy but at the same time it provides
remarkable outcome to the businesses too. In context of HP, it can be said that this company
wants to acquire this strategy then they must enter into the new geographical location with new
completely new product in order to attain success in quicker manner.
On the basis of above analysis, it can be said that diversification is the best strategy for
Hewlett Packard to gain entry into the market of Vietnam. This strategy would allow the
corporation to tap the attention of people by providing new products and service of innovative
nature.
Core Competencies
The core competencies of HP at present would provide aid to entity while conducting
operations in the confines of Vietnam. Thus, such core competencies are discussed in a detailed
manner as underneath:-
 The financial condition of this company has been quite strong over the course of last 5
years. This can be stated on the basis of its financial statement of last 5 years which lay
down the premise that the entity had been earning consecutive profits in the concerned
time frame.
 Hewlett Packard is a globally renowned IT corporation. To maintain its brand image
within the customers, the entity over the course of time has been investing heavily in
providing training and development sessions to employees. These sessions render aid to
5

the workforce in enriching their knowledge and upgrading it with the evolution of time as
per the requirement of company.
 HP’s innovative team has enabled the respective corporation to come up with market
disruptive products and thereby gain entry into a range of emerging markets. Over the
course of time, the entity is acknowledged to be quite successful in its wide ranging
initiatives within different countries across the globe.
 The respective organisation possesses a large product portfolio owing to which it offers a
wide range of products belonging to different categories.
 The geography and location of HP provide it with a cost advantage in serving its
customers, as opposed to the large number of rival firms present within the confines of IT
industry.
 HP has a well-established IT system that ensures efficiency in its internal and external
operations.
 HP owns a number of intellectual property rights that include trademarks and patents.
These allow it exclusivity over its products and competitors cannot copy or reverse
engineer them.
 Over the course of time, HP has entered into a number of strategic partnerships with retail
firms, dealers, vendors and other stakeholder groups in order to attain a high position in
market.
Problem Statement (ensure it is accurate, concise, and very clear)
As HP is viewing to gain entry into Vietnam, it needs to take into account certain aspects
mentioned underneath:-
 What strategies that Hewlett Packard Company should adopt to explore the Vietnam
market?
 What way should Hewlett Packard Company enter the market?
 How Hewlett Packard Company explore the Vietnam market?
 What are the factors that make the Hewlett-Packard Company so hard to explore the
Vietnam’s market?
Thus, looking upon the above consideration, the main problem that has been identified
has been converted into a problem statement given as underneath:-
6

“What strategies should Hewlett Packard Company adopt in order to start doing
business in the Vietnam market?”
Key Issues (Top 5 in order of importance)
The key issues that have been identified in context of Vietnam are as follows:-
 Sensitive political atmosphere of Vietnam
 Changing Foreign Exchange and investment regulations
 Expensive and inefficient telecommunication infrastructure
 Uncertain growth of IT sector in the region
 Recent inflation still affecting the Vietnam economy
Identification of Alternatives (List in order of priority)
There are a number of alternatives that can be considered by HP while gaining entry into the
market of Vietnam. These alternatives are listed underneath in the order of their priority:-
 Joint Venture with Local Partner
 Independent operations of company
 Franchising
Evaluation of Alternatives
The above mentioned alternatives are all feasible to be adopted by HP for gaining access
into the market of Vietnam. However, it is of immense significance to the company to identify
the best out of the available alternatives. For this purpose, it is important that the entity takes into
consideration the positive and negative linked with each alternative so as to implement the one
with most favourable outcomes. The evaluation is thus present as underneath for all the
alternatives:-
Joint venture with the local partner:
 The positive effect of application of this strategy by HP is the ease in adapting to the
market within Vietnam. This is so because JV presents the organisation with the
opportunity to get acquainted with the environment of the market in which entry is
proposed to be done.
 The negative consequence can be seen in terms of the difference of opinions lying
between both the companies. This can result in clashes in future course of time.
Independent Operations:
7

 Hereby, HP would be able to attain high profits as there is no other party than the main
company with which sharing of gains has to be done.
 The negative effect of this strategy can be seen in terms of the risk that is involved
hereby.
Franchising
 The positive effect of implementing this strategy can be seen in terms of the ease of
control that entity can gain over the market with the assistance of extensive knowledge
held by the franchisee.
 The negative effect of this strategy is that there might be issues or conflicts arising
between the franchisor and franchisee. The local organisation (franchisee) sometimes
starts taking decisions upon their own discretion which may put the goodwill of HP at
risk.
Implementation
On the basis of evaluation done above regarding the various types of alternatives for
gaining market entry in to Vietnam, it has been identified that the best strategy for Hewlett
Packard is Joint Venture with the local partner. This strategy is effective as HP is currently
unknown of the environment prevailing within the confines of Vietnam. Thus, with the help of
Joint Venture, the respective IT organisation would be able to gain an overview of the existing
business environment and market opportunities within the IT sector. By tapping advantage of the
knowledge of the local partner, Hewlett Packard would be able to ensure savings of cost, efforts
and time. This would prove to be beneficial for the entity in the sense that it would save those
resources for the firm which would otherwise had to be invested by the company for gaining
comprehensibility of Vietnamese market.
Recommendations/Conclusions
As per the above findings and analysis, it can be said that Joint Venture is the best
strategy for Hewlett Packard through which it can effectively gain access into the market of
Vietnam. Further, it has been identified that the respective firm has all the resources as well as
capabilities through which it can meet the needs and demands of customers present at market
place. In addition to this, it has been acknowledged that diversification would prove to be the
best strategy for the corporation while conducting its business within new market. This strategy
8

has been recommended looking upon the current global market positioning of Hewlett Packard
along with the resources that the entity possesses.
Evaluation and Risks of Recommended Strategy
Although diversification is a risky strategic course of action, yet this would provide
assistance to the concerned IT entity to provide new products and services within the new market
and thereby gain the attention of large number of people. This would aid in facilitating increment
in the existent level of revenues as well as profits.
Contingency Plan
It is probable that within a time span of 1 or 2 years, things can go haywire owing to an
adverse incident or any risk. In this regard, the various types of risks that may take place with HP
in the new market (Vietnam) are presented as underneath:-
ISSUE /
RISK STRATEGIES / ACTIONS PERSON IN-
CHARGE
TIME
FRAME
Equipment
Failure
To deal with the issue of failure of equipments, the
respective can execute in house testing. This would
aid the enterprise in inflating the scope of output
delivery via the tools of company.
Quality
Improvement
Manager
45 Days
Changes in
Supply Chain
Regulations
In an instance whereby there are alterations in
Supply chain regulations, entity may face negative
outcomes. To deal with this, firm can keep
contractual relations with vendors. Thus, when
change occurs, vendors can also be accordingly
substituted.
PR Manager 4 Months
Employee
Disloyalty
To deal with this, it is essential that strict HR
policies are formulated within the confines of
organisational premises. This would ensure that
employees do not get indulged in unethical or
illegal activities.
HR Manager 3 Months
9