INTRODUCTION
Every organisation requires goods and services from external suppliers or providers as no company is an Island. These goods are to be acquired at the right time, right source, right quality of materials, right quantity and also these goods are to be of the right price in order to give the organisation an advantage over its competitors( competitive advantage) allowing it to generate greater sales and retain more customers than its competition. We will be looking at HEWLETT-PACKARD. Hewlett-Packard emphasis has gone beyond just reacting to the needs of users as and when they arise, to a forward looking proactive approach. This reflects the contribution that the management makes.
?A proactive strategic
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Hal Sirkin , senior Partner and Managing director ,BCG( The Boston consulting Group 2008)
Hewlett-Packard is the case study of this work, procurement being a broad topic, we will concentrate on three main areas for the purpose of these work. Brief understanding of them;
GLOBAL SOURCING/ OUT SOURCING:
?Global Sourcing is the integration and coordination of procurement requirement across the world wide business units looking at common items, processes, technologies and suppliers?( John stevens 1995)
?Global sourcing is practiced by big corporations as they have the need and leverage to gain competitiveness from global sourcing and also the facilities around the globe to enable them to apply the process. They are usually contractually bound to other large corporations who have the ability to supply products to the globally located sites of the multinational purchaser? (Peter Baily et al 2015)
Many organisations are meeting the need for lower cost by moving to foreign countries where there are fewer regulations that interfere with the manufacturing process, where they can find cheaper labour and thereby lower basic plant, personnel and operations cost. Sourcing and outsourcing are two basic methods of foreign manufacturing which have developed over time and this help in making the best choice for global
Global sourcing is an important aspect to a global business, as this can significantly decrease cost as well as have access to resources, technology and expertise overseas while increasing efficiency. However, the reliance on the supplier and the quality control of the outsourcing partner is potentially a threat to the businesses reputation and ability to succeed.
“Global sourcing is defined as sourcing the technology, materials and components from sites and supplies located throughout the world. It also means the integration and coordination of requirements across worldwide business units” (Monczka & Trent, 1991, pp2-7).
This issue for case study 1-6 is brought to us by Steve Nelson and the company of the Gregg’s Appliances, Inc. The HH Gregg Company was founded on April 15, 1955 in Indianapolis by Henry Harold Gregg and his wife. The initial store was an 800 square feet appliance showroom and office. Since then the company has expanded and with that expansion the company needed more and more information technology in order to harness the power of the information they had acquired. But in 2006 the current CIO, Steve Nelson, was facing a deadline. The deadline was the HP, which was Gregg’s principal information technology vendor, has chosen to discontinue support for its line of HP 300 mainframe processors. Gregg’s relied
Organisations around the world are increasingly operating in very dynamic business environments. Among the areas that are being monitored is the way raw materials for production are procured and how the finished products reach the market and eventually the consumer. This paper will provide a review of published documents on strategic procurement in organizations by providing a critical analysis of the strengths and weaknesses of their findings. The paper will present the impacts of the findings of the reviewed articles on the activities of an organisation that operates in a business to customer industry. And also a supermarket will be used in this case.
According to our textbook, global sourcing is the practice of purchasing goods and services from the around the world wherever it is least costly (Pg 82). A strategic alliance is a partnership between two entities in which they both share their
Outsourcing is a method used by many corporations in which their products are manufactured in foreign countries often for cheaper labor.This method method of productions has it’s pros and cons.
The following paper will detail the impact on businesses concerning outsourcing and the global environment. This paper will outline the needs of the modern business to embrace the concept of outsourcing and the need to educate employees on the diversity of global business practices.
Many businesses have turns to offshoring as a way to boost their profits. The most obvious benefits of offshoring for the businesses and English-speaking destination countries are the lower wages in foreign countries such as India, China, Korea, Philippines, etc… which translates into significant savings and often, improved quality.
Manufactures must understand the obstacles and challenges they face, understand their jobs to fit into larger organizational objectives (Kazmer 2014). Global challenges for the managers is to understand the process of suppliers and getting their feedback. Motivating them to exploit new manufacturing technologies and establishing close relation in work (Olausson, Magnusson and Lakemond 2009). One of the main global challenge for the manufactures is the two available outsourcing strategies. Advantages can be gained with respect to cost when domestic outsourcing option remain competitive across the globe. Understanding the challenges in domestic versus international outsourcing options and at the same time managers have the challenge in how to reach a particular decision (Pearce 2014). Another global challenge for Chinese manufactures is how to optimize their gross profits.
Hewlett-Packard (HP), as many companies, has been forced to modify their strategy in order to remain competitive in the corporate business as well as the printer and personal computer segment of the hardware and services industry. On its efforts to keep up with continuous market fluctuations, HP separated into two companies with quite distinct markets, with quite distinct customers, being able to move faster to take advantage of the changing customer needs and accelerating the company’s products and innovation road map (Clark, 2014).
By the late 1990s, HP’s business was facing major problems which are reflected in its financial results. Despite a 9.71% increase in total net revenue, HP faced declining net earnings of 6% from 1997 to 1998. The company had also experienced a slow and decreasing growth in revenue in comparison to its main competitors. From 1996 to 1998, HP’s annual revenue growth decreased from 21.89% to 9.71%, while one of its main rivals, Dell, was able to maintain an over-40% revenue growth in each year within the same period. Moreover, HP’s failure to satisfy customer needs and catch
Having researched the concept of “the HP way” I have discovered that many companies have also adopted this approach into their own business practices the following points are my understanding of Hewlett Packard’s core values
Narayandas, D., Dudley, R. (2005), Hewlett Packard- Computer Systems Organisation: Selling to Enterprise Customers, Harvard Business Review
HP’s business is defined as the entire world’s leader and innovator in providing top of the line electronics, such as digital cameras and printers, as well as providing the top I.T. services any company has to offer. HP continually makes advances in their products to stay the leader in each of the 8 industries and sub-industries it competes in. HP ensures the highest level of service and technology to ensure each person taking timeless shots, or huge firms relying on their I.T. outsourcing to stay profitable can do so with the full confidence of HP’s name.
Many organization manage their business strategies through sourcing various entities of their supply chain to other companies. Outsourcing is a commonly used practice for a global organization to focus on core competencies, and partner with other organization to execute functions more efficiently and with cost reductions (Arias-Aranda, Bustinza, & Barrales-Molina, 2011). The transactional costs theory is the idea of organizations using outsourcing as a tool. The reason they partake in acquisitions and utilize sourcing for industry expertise and cost savings of their business functions. Strategic planning is essential for outsourcing to mitigate the business risk. The challenges of business and the market require an organization to react to their needs based on the business environment. In addition, organization are able to restructure their business actions and foster a competitive