MKT 10007 - Fundamentals of Marketing: HP Laptop Situational Analysis

This report provides a comprehensive situational analysis of Hewlett-Packard (HP) laptops, examining the personal computer industry, market trends, and key players. It includes an industry overview, market share analysis, and a detailed look at the macro-environment, considering technological, political, and demographic factors. A SWOT analysis compares HP with competitors like Lenovo and ASUS, highlighting their strengths and weaknesses. The report also focuses on consumer segmentation, identifying target audiences and their characteristics, and evaluates the attractiveness of different market segments. It concludes with recommendations for further research and potential improvements for HP's marketing strategies. The report emphasizes secondary research and provides tables and figures to support the analysis.

MKT 10007
Fundamentals of Marketing
Assignment 3
Situational Analysis of Hewlett-Packard Co.
(Laptop)
Prepared for : Carolina Sandra Giang
Tutorial Group : 03
Tutorial Session : Monday, 10.30 a.m. - 11.30 a.m.
Group Members :
1. Sarah Binti Supahan 101214284
2. Oh Xiu Feng 101214666
3. Grace Lee Ying Ying 101213922
4. Ting Chiong Yi 101216374
5. Brendan Louis Kuok 101215009

Executive Summary
The purpose of this report is to analyse the personal computer industry. The team had
gathered information and statistics by way of secondary research. Firstly, the industry
analysis includes the industry overview which outlines the definition of the industry as well
as determining the product sub category of HP laptops. For market analysis however, the
trends have been observed to be in the form of improvement in security and battery life.
Secondly, it has been determined that Lenovo held the most market shares, proclaiming its
position as market leader in the industry for 2019, whereas the chosen company, HP ranked
second. With that said, the remaining companies have remained stagnant in their own
position for quite some time. Thirdly, an analysis has been conducted on the macro-
environment of the market and several factors influencing the market have been brought up
such as the rapid development of technology, increased electronic taxes, and the change in
consumer lifestyles. Not only that, a SWOT analysis was done on several companies such as
Lenovo, Asus and HP to better understand their performance and obstacles. Additionally, the
chosen consumer segmentation base was Generation Y, but the team has included
recommendations to expand to teens and Generation X. Hence, several justifications have
been applied to ensure there would be profitability in those markets. Not only that, an
analysis on the size and growth, structural attractiveness and company objectives and
resources have been made to measure the market segment attractiveness. Lastly,
recommendations for additional research needed and finally the conclusion has been made
available.
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Table of Contents
Executive Summary..............................................................................................................................i
1. Introduction.....................................................................................................................................1
Section 1...............................................................................................................................................2
2. Industry Analysis.............................................................................................................................2
2.1 Overview of the Industry..........................................................................................................2
2.2 Market Analysis.........................................................................................................................3
2.2.1 Market Trends....................................................................................................................3
2.2.2 Market Share......................................................................................................................3
2.3 Key Players of the Industry......................................................................................................4
3. Macro-Environment Analysis........................................................................................................5
3.1 Technological Environment......................................................................................................5
3.2 Political and Legal Environment..............................................................................................6
3.3 Demographic Environment.......................................................................................................6
4. Competitors’ Analysis.....................................................................................................................7
4.1 Hewlett-Packard Analysis.........................................................................................................7
4.1.1 Production excellence (S)...................................................................................................7
4.1.2 Declining demand (W)........................................................................................................7
4.2 Lenovo Analysis.........................................................................................................................7
4.2.1 One of the leading players in the PC market (S)..............................................................7
4.2.2 Slow market share growth (W)..........................................................................................8
4.3 ASUS Analysis...........................................................................................................................9
4.3.1 Cost Advantage (S).............................................................................................................9
4.3.2 Poor Marketing and Customer Service (W).....................................................................9
4.4 Product/Brand/Sub-Brand Analysis.......................................................................................10
4.5 Opportunities and Threats......................................................................................................11
4.5.1 Opportunities....................................................................................................................11
4.5.1.1 Internet Expansion in Emerging Markets................................................................11
4.5.1.2 Need of obtaining patents..........................................................................................11
4.5.2 Threats...............................................................................................................................12
4.5.2.1 Increase sales of smartphones and tablets................................................................12
4.5.2.2 New entrance of manufacturers................................................................................12
5. Micro-Environment Analysis.......................................................................................................13
Section 2.............................................................................................................................................14
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6. Consumer Segmentation...............................................................................................................14
6.1 Choice of Segmentation Base..................................................................................................14
6.2 Justification of Segmentation..................................................................................................15
6.2.1 Substantiality....................................................................................................................15
6.2.2 Identifiability and measurability.....................................................................................15
6.2.3 Accessibility.......................................................................................................................15
6.2.4 Responsiveness..................................................................................................................16
6.3 Sub-Segments and Profiling Elements...................................................................................16
6.3.1 Teens (13-19).....................................................................................................................16
6.3.2 Generation Y (25-40)........................................................................................................16
6.3.3 Generation X (41-54)........................................................................................................16
Section 3.............................................................................................................................................17
7. Attractiveness of Each Sub-Segments..........................................................................................17
7.1 Size and Growth.......................................................................................................................18
7.2 Structural Attractiveness........................................................................................................18
7.3 Company Objectives and Resources......................................................................................18
Section 4.............................................................................................................................................19
8. Recommendations for Additional Research...............................................................................19
8.1 Additional Research................................................................................................................19
8.2 Primary Research....................................................................................................................19
8.3 Research Design.......................................................................................................................20
9. Conclusions....................................................................................................................................21
Appendices
Appendix 1 – Group’s Performance Report
Appendix 2 – Assignment Cover Sheet
Reference List
List of Tables
Table 1: Technological factors influencing the laptop industry.............................................................5
Table 2: Political and legal factors influencing the laptop industry.......................................................6
Table 3: Demographic factors influencing the laptop industry..............................................................6
Table 4: Global PC market share (2015–2018)......................................................................................8
Table 5: 4Ps comparison......................................................................................................................10
Table 6: Consumer segmentation........................................................................................................14
Table 7: Attractiveness of each consumer segment.............................................................................17
Table 8: Advantages and disadvantages of each method of research...................................................20
Table 9: Detailed explanations on each research method....................................................................20
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List of Figures
Figure 1: Tree Diagram of Personal Computer (PC) Industry...............................................................2
Figure 2: Global Market Share of Personal Computer Vendors 2018....................................................3
Figure 3: Key Players in the Personal Computer Industry 2018............................................................4
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1. Introduction
There are several purposes to this report in which it will cover the marketing environment,
the segmentation base and the brands and sub-brands of Hewlett-Packard Co, a multinational
information technology company based in the United States. An industry analysis of the
company will be conducted alongside a SWOT analysis on the company regarding the
competitors or major players of the industry. Research on the macro-environment and micro-
environment forces in the industry will also be conducted. Furthermore, a study of the
marketing mix (4Ps) of the product will be available. Moreover, the consumer segment base
of the product used in this report will be justified accordingly and the attractiveness of the
segment will be researched Lastly, recommendations will be given and justified with regards
to potential improvement that the company can use.
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Section 1
2. Industry Analysis
2.1 Overview of the Industry
The computer or information technology industry is the assortment of markets from business
to households that integrates technological appliances such as personal computers to its daily
operations. It operates around executing the design of computer hardware and software as
well as manufacturing components that are used in a computer (Encyclopedia 2016). Not
only that, information technology services may also be provided.
The tree diagram above presents a clear illustration of where our brand, Hewlett-Packard
(HP) stands in the personal computer (PC) industry, which falls under the broad computer
industry.
In the personal computer (PC) industry, it is further categorised to stationary and portable
PCs. One of the portable PCs is laptop, which is defined as a small-scale computer that can
be carried around easily and is flat when closed (Cambridge University Press 2019). In
contrast, the business laptop is designed for the convenience to use outside an office.
Therefore, the scope of this report will mainly focus on the business laptop by HP in the
laptop industry which belongs to the portable PC category. Besides that, some strong
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Figure 1: Tree Diagram of Personal Computer (PC) Industry

competitors’ brands in the laptop industry are also listed along with HP brand like Asus and
Lenovo which will be further analysed and compared with HP in this report.
2.2 Market Analysis
2.2.1 Market Trends
The current market trend of the laptop industry are the improvements such as security
technology, processor performance and development in convertible laptop. These improved
features are triggered by the rapid development in technology and change of preference on
the target market (Neiljack 2017).
2.2.2 Market Share
Figure 2: Global Market Share of Personal Computer Vendors 2018
The pie chart illustrates the worldwide market share of personal computer vendors in the year
2018 (Conn 2019). Generally, Lenovo and HP Inc. dominated the personal computer industry
and contributed the most to the market’s total sales. Lenovo leads in the industry with 22.5%
of the market share followed by 21.7% from HP Inc.
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On the contrary, ASUS held the least market share in the industry and contributed the least to
the market’s total sales, which is only 6.0%. Nonetheless, Dell, Apple, Acer Group, and other
companies made up of 16.2%, 6.9%, 6.1% and 20.6% market share in the industry
respectively. In brief, Lenovo and HP Inc. were the two top sellers in the PC industry that can
be deduced by their large proportion of market share in the market.
2.3 Key Players of the Industry
The figure above depicts the market leaders in the personal computer industry based on the
percentage of shipments for the year 2018 (Statista 2019). As shown above, the market leader
is Lenovo who owns the most market share in the personal computer industry at 22.5%. In
second place is the group’s chosen company, HP Inc with 21.7%. The remaining companies
such as Dell, Apple, Acer and Asus own about 6% to 16% of the market share altogether
whereas other minor companies in the industry own 20.6 percent of the market share.
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Figure 3: Key Players in the Personal Computer Industry 2018

3. Macro-Environment Analysis
3.1 Technological Environment
Trend Direction Explanation Strategic Implications
Rapid
development of
laptop
components
↑  Fast changing of technology
 New innovation
 Put latest products at risk of
becoming obsolete
overnight.
 Observe the market
carefully
 Manufacture products
that will not become
obsolete if a new
technology is introduced
Convertible or
Hybrid Laptops ↑  Convenient and stylish
 Can be used as a laptop or
tablet (2 in 1).
 Produce more 2-in-1
laptops.
Table 1: Technological factors influencing the laptop industry
According to Beal (2019), Gordon Moore, observed that the processing speed of integrated
circuit chips double each year. Due to this, the latest products of HP may become mainstream
once the new technology is out. HP may also be forced to lower the prices of their new
products to make way for the latest products. Furthermore, according to Allan (2017), 2-in-1
laptops can function as a tablet and laptop and gives the convenience of both. This is more
affordable for the consumers. In this case, HP should produce more 2-in-1 laptops because as
of now, majority of their laptops are standard.
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3.2 Political and Legal Environment
Trend Direction Explanation Strategic Implications
Electronic Import
Duty and Taxes ↑  High imposed tax will
increase the price of the
laptop.
 Move the factory to
lower tax rate country
Table 2: Political and legal factors influencing the laptop industry
According to Aiman Maulana (2018), laptop as an electronic product is imposed tax at 5% by
the government in Malaysia as of September 2018. Additionally, in some countries like
Brunei, there is a charge of import duty at 20% for imported goods (Easyship Fulfilment
Services Ltd 2019). These taxations will force HP to increase the price of their laptops to
cover their cost of exporting the laptops. Therefore, it is beneficial for HP to move their
factory to low rate tax countries where they can achieve higher profit.
3.3 Demographic Environment
Trend Direction Explanation Strategic Implications
Lifestyle ↑  Busy lifestyle
 High quality of life
 Time constraint
 Faster processor speed
to minimise valuable
time wasted
Table 3: Demographic factors influencing the laptop industry
Nowadays, most people have busy lifestyle because they have higher lifestyle compared to
older days people. So, there are time constraints as they spend most of their time working and
have less time for leisure. Hence, people need faster processor speed laptop to ease
complicated tasks like big projects or assignments in short period.
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4. Competitors’ Analysis
4.1 Hewlett-Packard Analysis
4.1.1 Production excellence (S)
According to Bhasin (2019), around two personal computers and two printers from HP are
shipped every second. Additionally, HP also lies at the second position for shipping PC
equipment in the world. From this, HP products can reach consumers very quickly and can
enjoy a variety of HP brand laptops to choose from, which prevents shortage problem on
certain fast-selling laptops.
4.1.2 Declining demand (W)
A decline demand in HP’s PC segment is observed as stated by Bhasin (2019), there is a 2%
decrease of net revenue in laptop segment. Besides, the total number of units sold by HP also
declined 3% year-to-year in the first quarter of 2019 as according to Ness (2019). This is due
to strong competitors in the market who able to offer similar products at a lower price. This
would result a more intense competition for HP to not only compete with the competitors in
the laptop industry but also the smartphone industry.
4.2 Lenovo Analysis
4.2.1 One of the leading players in the PC market (S)
Lenovo, being one of the top sellers of personal computer globally, dominated the market
with 22.5% of market share in 2018 (Conn 2019). The company is able to adopt Smart
Technology and reasonable prices of its products (Pratap 2018). As an illustration, Lenovo
Smart Display 8’ was produced using the Smart Technology and sold at around RM 830.00
(Lenovo 2019). Thus, consumers will prefer to purchase the Lenovo Smart Display 8’ that
has good functions and is reasonable, which contributes to the sales of Lenovo’s products in
the PC market.
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