Business Weaknesses of HP Company

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The Hewlett Packard (HP) technology company has a long-standing history as a technology hardware and software provider. However, like all businesses, HP carries its own distinct set of weaknesses. As its weaknesses become more well-known and, if HP cannot demonstrate an ability to overcome them, then HP risks a decreasing stock price, cash flow problems and lower overall market valuation.

Software Sales

HP software sales and HP's Enterprise Business line of software products are one of the weaker revenue streams among HP's other business units. These software products compete with others produced by Microsoft, VMWare, and Salesforce in the customer relationship management (CRM), enterprise resource planning (ERP), and virtualization software markets. This is in stark contrast to HP's professional services business unit, which develops custom software and is, in some cases, one of the company's highest earning units.

Corporate Investments

Although only a small portion of its revenue streams, its corporate investments business unit led to a loss of $198 million for the period ending April 30, 2011, according to HP's recent earnings statement. Examples of corporate investments include acquisition of other companies for their competitive technology and the development of other spin-off companies based on internal ideas and research and development (R&D).

Leadership Questions

Changes in top executive leadership roles at HP led to weakness in the stock and company during the late 2000s and early 2010s. Unlike some of its primary competitors, HP is not driven by a central visionary leader, such as Steve Jobs at Apple or Bill Gates at Microsoft. This however has not stopped the company from creating revenue in its core businesses such as ink, printers and computers, especially laptop sales.

Mobile Acquisitions

HP acquired Palm, a manufacturer of smartphones and the webOS mobile device operating system, among other handheld devices. HP acquired Palm for its mobile technology, however its late entry into the wireless device and operating system, even under the new HP name, remain low compared with Apple iOS and Android-powered smartphones. This mobile acquisition has proven to be a weak earner for HP, as has its recent tablet sales which uses the same webOS operating system.

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