HEWLETT-PACKARD COMPANY (NYSE:HPQ)’s split decision overshadowed by past mistakes


Three years ago, CEO of HP (NYSE:HPQ) had claimed that they will evolve the new line of printers, the Multifunctional printers. At this time HP (NYSE:HPQ) was one of the largest printer makers in the world. If you compared HP (NYSE:HPQ)’s manufactured units with its sales, you would have been presented with the actual murky scenario. HP (NYSE:HPQ) was on a ten-year low stock record and even though they were the largest printer maker in the world, they still were at the bottom of the category of top multifunctional printer makers- ranked 5th out of 5. They were way behind as far as power hold on the MFP market was concerned.

This whole idea was a strategy to compensate for their share losses over the years. CEO of HP (NYSE:HPQ) at that time came out to defend the strategy saying that HP (NYSE:HPQ) hasn’t had a new release in quite some time, which was the main reason the shares were going record low. The CEO reassured the shareholders that HP (NYSE:HPQ) would regain its lost power. Nothing really happened except they laid-off 30,000 employees and suffered massive cost control issues.

Now after a couple of years HP (NYSE:HPQ) is back again to talk about ‘innovation’. They claim that HP (NYSE:HPQ) will speed up and come out with products frequently so that the customer is always on its toes and anticipating the new HP arrival.

In order to receive that sort of agility, HP (NYSE:HPQ) decided to split into two categories: one that will work upon the printing and other work related to computers while the other would sell services like data storage and consulting. This has been seen as a good move on part of HP (NYSE:HPQ) because of their sales and reputation already being in hot waters.

Specialized units have brought some success for HP (NYSE:HPQ). In the current customer Loyalty Engagement Index standing HEWLETT-PACKARD COMPANY (NYSE:HPQ) is now at a firm 3rd out of 10 in the MFA printer category. When it comes to computers, HEWLETT-PACKARD COMPANY (NYSE:HPQ)’s standing is a bit far out amidst giants like Samsung and Apple, 7th out of 12.

The split of the HEWLETT-PACKARD COMPANY (NYSE:HPQ) has received mixed reviews. Some veteran analysts say that HEWLETT-PACKARD COMPANY (NYSE:HPQ) in the past few years has kept a terrible track record and they are already on a decline. Contemporary analysts observed that that HEWLETT-PACKARD COMPANY (NYSE:HPQ) has got nothing to lose and everything to gain. According to them it was a smart move nonetheless to assign different teams to different categories.

HEWLETT-PACKARD COMPANY (NYSE:HPQ) needs to reflect on their situation instead of going on a wild streak to produce products and become very focused. Before any split, they should at least research about their dwindling condition as to where does the real problem lie. As for the question that will HEWLETT-PACKARD COMPANY (NYSE:HPQ)’s split help its market situation, let’s leave that for time to tell as we all wait to find out.