Can HP Recover?

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Everyone was expecting a major turnaround for HP’s business in the first quarter of this year but if you look at the stats, they were definitely disappointing. These days, HP is all about declining revenues in several segments. What went wrong and where?  Bad acquisitions and no innovations.

Despite the glooming figures, the company is hopeful that layoffs can improve efficiency. Even if this happens, the layoffs cannot conceal HP’s main obstacles, which we have already mentioned above.

In the past few years, HP has made nothing but bad decisions that have affected their growth and pulled it down. So many acquisitions and none of them turned out to be successful, but since the deals had already been closed, the resources were completely drained. It started off with Compaq, which HP acquired in the 2001 in an attempt to get an edge in the PC market. At that time, HP thought the deal would help them compete with Dell, IBM and other competitors, but it went another way, which HP did not expect.

Nine years later, in 2010, HP made nearly the same mistake. They bought Palm, which had almost gone bankrupt, so that they could launch their own series of mobile devices. Come 2011, and HP acquired Autonomy in a deal valued a $10.3 billion. Autonomy was an enterprise software maker and HP thought that with it, they could give competition to other names in the industry.

As you can see, HP has tried to acquire so many companies for a number of different reasons. All the deals failed and HP could not achieve their goals. It is not a surprise that their revenues are suffering.

Bad acquisitions are not the only problem for HP. They have fallen back on their innovation and have nothing new to offer to the technological world. The era of PCs and laptops might just be well over in the next few years, and it will all be about tablets. Will HP stand a chance then? The industry experts do not think so until they step into this industry.

The answer to HP’s problems lies in outsourcing their product designs or branding so they can enjoy cost benefits and flexibility.

So what can we expect of HP in the future – another trail of bad acquisitions or a return to its former glory? Only time will tell.

Source: www.forbes.com

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