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1 HP INC: Poised to lead in the 3D printing case study Name Date 2 Contents Executive Summary ......................................................................................................................... 3 HP Company Overview ................................................................................................................... 4 External Assessment: Opportunities and Threats ............................................................................ 5 Internal Assessment: Resources and Capabilities ............................................................................ 6 Internal Assessment: Financial Performance and Future Financial Capacity ................................. 7 Current Strategies ............................................................................................................................ 8 Key Issues ........................................................................................................................................ 9 Implementable Strategic Alternatives ............................................................................................ 10 Criteria and Evaluation of Alternatives by Criteria ....................................................................... 11 Recommendation and its Implementation ..................................................................................... 12 Limitations and Critique of Recommendation .............................................................................. 12 Exhibits .......................................................................................................................................... 14 3 Exhibit 1; LEADING HOLDERS OF 3D PRINTING PATENT ....... 14 Exhibit 2; VRIO ANALYSIS ......................................................................................................... 14 4 Exhibit 3; HP INC FINANCIALS ................................................................................................. 15 EXHIBIT 4; HPs 3D PRINTING AND DIGITAL MANUFACTURING CENTER .................... 16 References ...................................................................................................................................... 17 HP INC: Poised to lead in a 3D printing case study Executive Summary HP is a technology company that ranks among the world's most successful. A wide variety of goods is available from the firm, ranging from personal computers (PC), laptops, servers, storage, printers, scanners, and digital cameras to information technology (IT). In 1938, the company was only a "garage" with $538 in working capital, but it has since developed into a global supplier with more than 100 billion dollars annual sales. Consequently, as the global competition grows, HP must compete with a diverse spectrum of competitors in every industrial sector to survive. One of the upcoming concerns in HP is 3D printing, and the company seems to 5 grasp well and integrate it into its processes. This paper aims to assess the situation and strategic analysis to recommend the best strategy to adopt and implement in the company for the next five years. This paper deals with the external Assessment of HP by expanding on external factors that affect its performance. It analyses the company's internal assessment, which entails Resources and Capabilities. The resources and capabilities include; brand image, product portfolio, and customer loyalty. Some of the company's threats include; stiff rivalry and unstable global markets; by addressing the financial statements of HP, this paper analyses the company's financial position and its future financial capacity. Some of HP's major issues concerning 3D printing are also addressed, current strategies addressed, and alternative strategies evaluated and analyzed. However, analyzing the threats leads to the recommendations of the best strategies to adopt and the limitations of the applied recommendations. HP Company Overview Hewlett Packard, often abbreviated as HP, is a global corporation headquartered in America specializing in information technology. David Packard and Bill Hewlett founded the company in 1939. The firm started by manufacturing electronic test equipment but eventually expanded into the manufacture of personal computers. The organization established a highly functional business style, nicknamed the HP Way, which many enterprises now utilize, and guided it toward positive growth and profit maximization. The management style was defined by providing the highest respect for workers, improving corporate citizenship, increasing product distinctiveness, maintaining a self-financed development structure, and assuring the utmost 6 confidentiality. The firm employs a platform manufacturing approach, which benefits it in various ways, including greater innovation, expanded research and development operations, and higher brand popularity.

External Assessment: Opportunities and Threats Analyzing the external environment of HP, it is plausible to say that the company faces some external forces which influence its presence and performance in the market. Some of the opportunities that HP faces are as explained below: 3D printing : Estimates indicate that 3D printing technologies will see rapid expansion. By 2022, the 3D market will be worth a fortune with the high growth rate. To assist clients in succeeding in their additive and digital manufacturing endeavours, 3D Printing and Digital Manufacturing have developed a portfolio of additive manufacturing solutions and supplies available to them.

HP provides comprehensive solutions in partnership with a large number of third-party partners. 7 Managed Print Services (MPS) Market : The managed print services market is expected to rise and record-high annual growth. This Service will help manage, protect, and optimize the whole fleet of devices in the markets since it provides a wide range of options available to meet the demands of a scattered workforce by combining paper and digital procedures with cloud-based technologies that increase productivity.

However, there are various threats that the company faces. For instance: Increasing competition: Just as HP produces 3D printing products, so do other enterprises in technology. Other business also strives to produce better and, at times, cheaper 3D printing products, which creates competition for HP. However, the global markets are relatively unstable, making it quite difficult for HP to ensure a constant profit generation for its 3D printing business.

HP operates globally and thus depends on global sales, so it is not easy for the organization.

Consumer behaviour is subject to rapid shifts due to both the passage of time and particular circumstances. HP has to be aware of this and respond to the shift in customer behaviour.

Gathering information from their clients and subsequently expanding into other areas is essential.

Additionally, many companies are venturing into 3D printing, which puts HP in a tough position of being outstanding among rivals. HP operates in many different countries; it can face some problems due to fluctuating currency values. Lastly, the rising cost of raw materials and labour will eventually lead to an increase in the product's price, negatively affecting the company's sales.

Internal Assessment: Resources and Capabilities Its tangible and intangible resources can define the organizational capabilities of HP.

Resources and capabilities are the fundamental sources of competitive advantage and 8 profitability for every business. Resources and capabilities enable a firm to grow and compete by providing goods and services that meet client needs. Strength in physical resources allows Hewlett-Packard a wide range of options for expanding its commercial capabilities.

Research and development usage: HP heavily relies on research and development to produce and distribute its products. Moreover, HP can keep up with industry changes and customer behaviour because of its research and development department. As a result of its understanding of shifting customer preferences, HP is in a position to create products that keep pace with those shifts.

Brand Image: HP is a globally recognized brand that makes its products positively embraced by most of its target customers. This global recognition and loyalty have helped boost the sales of the 3D printers and their accompanying accessories. Because it is impossible to replicate or replace, HP's brand image serves as a source of expertise. One of HP's most valuable assets is its brand image, which cannot be replicated or replaced by any other company. Throughout the years, the HP brand image has been built up by a consistent effort and product offering from HP.

As a result of its brand image, HP cannot be replaced by other companies in the business. For both sales and corporate value, a well-known brand is essential.

Strong Financial base: HP's financial strength provides more power in research, development, and marketing spending. Apart from offering competitive compensation, businesses must also provide proper incentives in monetary and non-monetary bonuses to attract the top personnel as HP does. This internal income enables the corporation to plan expansions in sync with market developments. The firm is developing Web-enabled home printers and mobile printing capabilities. Converged infrastructure solutions are on the agenda for the company's future growth. Demand for more automation and virtualization is driving these new products. 9 Internal Assessment: Financial Performance and Future Financial Capacity It is crucial to understand the financial performance and future capacity. To help understand the financial position of HP incorporation, this paper looks at some of its financial statements. The income statement is the most important of all the companies' financial statements to the general public for investment purposes. The statement shows the firm's financial position over time and walks potential investors to understand how much the company spent to how much it sold. This report shows how much revenue a company has generated. We can depict how much HP owns, how much it owes, and how much is left for investors by analyzing its balance sheets. The balance sheet is most crucial for its stakeholders. Another vital financial statement for HP is the cash flow statement. The report shows changes in the income statement and the balance sheet and how it affects the amount of cash available to a firm. This financial statement helps determine a company's performance. The company recorded its 2021 net revenue as $63.5 billion, a 12% increment from 2020. However, the company recorded a rise from $2.00 in EPS in 2020 to $5.33 EPS in 2021. The link: https://s2.q4cdn.com/602190090/files/doc_financials/2021/q4/0302cd18-964e-4bee-b427- d313202a7dd9.pdf shows HP's financial statements. Over the past few years, HP has recorded an impressive financial performance and gained a much more comfortable position in its industry despite its sales being lower. The company, however, is expected to record better performances as per its financial statements and as the world moves from the effects of the COVID 19 pandemic. The company can raise enough resources to cater to the recommendation section's recommendations within the coming five years . The organization will implement its future strategies using its reserves and equity debt. 10 Current Strategies HP Inc. offers the new Jet Fusion 5200 Series 3D printing system. The system is an industrial version of the Jet Fusion 5200 Series that tackles key customer concerns scaling to full production. HP also strengthened key collaborations with industry heavyweights BASF, Materialize, and Siemens and introduced the HP Digital Manufacturing Network, a large-scale 3D printing component producer. The 3D printer integrates advancements in systems and materials. The approach increases production predictability via the use of high-quality components.

Currently, HP is using different routes to the promotion of technology awareness. For instance, 3 DaaS service where customers would not need to buy the product but only pay for the services. This strategy would help potential buyers to familiarise themselves with the product.

Another strategy was the concept of 3D hubs where potential customers would see how a production line used 3D painting. The company, however, had plans to expand the hubs from the limited countries and regions where it was located. Numerous businesses turn to digital manufacturing service providers to accelerate product development, decrease time to market, streamline supply chains, and minimize their carbon impact. To address these demands, HP launched the HP Digital Manufacturing Network, a worldwide network of HP manufacturing partners dedicated to assisting in the planning, manufacture, and delivery of both plastic and metal components at scale using HP 3D printing technologies.

Key Issues 11 Unlike most of its competitors in its industry, HP has technologically progressed beyond prototyping. The technology, however, was geared to meeting a diversified mass market. One major issue HP faces are promoting technology awareness among potential users. HP's entry into the 3D industry is beneficial for its development. COVID 19 acted as a catalyst whereby the pandemic was generating use cases of 3D printing to produce ventilators for health care facilities. However, HP still faces a lack of demand for 3D printing in their supply chain, resulting from a lack of awareness. HP faced another vivid issue with synchronizing with the companies HP planned to work with. For instance, the locations, products, and methods of running the processes differed, challenging HP Inc. To add, HP faced breaking corporate inertia among industrial clients.

Adopting 3D printing required relevant behavioural change among key decision-makers with a traditional manufacturing mindset. Another key issue was that increasing the adoption of 3D printing technology was only one of HP's business objectives, and the company still had to face its share of value capture. For instance; 70-the 3D printing company holds 90 per cent of the created margin Implementable Strategic Alternatives Choosing to maintain 2D and not venture into the 3D printing business is one of the available alternatives. It is maintaining 2D as the company's printing avoids incurring many costs. However, given that most of the competition already adopted 3D technology, failing to shift would cause the position of HP in the market to drop significantly. Another alternative may be to invest less in research and development: putting the least investment in research and development would have enabled the company to invest the least amount. On the other hand, 12 inadequate investments in R & D would mean technically lacking human resources that would not help develop a 3D printing system of the desired quality.

Pastor believes that two issues can counter the lack of awareness among HP customers about 3D painting. He puts forward the 'push factor,' representing the agility and flexibility 3D printing would add to the manufacturing industry. He also argues that the pull factor will represent the efficiency and resilience that 3D brought to supply-demand matching. Criteria and Evaluation of Alternatives by Criteria HP's focus on core competence : strategically prioritizes 3D printer manufacturing and sales as much as possible. Instead of independently providing end-to-end 3D printing solutions to the public, it sorted to developing relationships with leading companies in specified specialities.

The criteria are plausible since they will help GP focus on its core activities and leave the technical parts to the partners who specialize in 3 D printing. This alternative is a crucial and long-term solution, and it will yield positive results for HP since its stakeholders will enjoy better and improved services. Focus on Application: 3D technology has progressed and developed into a better and more effective tool. HP believes that it would be plausible to let applications lead to potential growth opportunities. Applications began to serve as a starting point for material selection. Based on the argument that the choice of steel for a metal jet platform was triggered by steel having more applications across industries than any other metal. Focusing on the application is an effective strategy, but it will need constant monitoring and updating of the software. Focusing on the application should be a short-term goal for the company. 13 Focusing on vertical: HP Inc. thought it necessary to let the choice of vertical lead the way to scale. Like many other companies, HP faced finding people with plausible expertise who could speak the same language as HP's customers. This alternative is not the best to adopt because of communication barriers. To achieve scalability, Hewlett-Packard has to choose to follow the choice of verticals. It has a big issue in hiring the right personnel with the appropriate vertical knowledge. Therefore, HP's long-standing and well-established conventional printer business will enable HP to enjoy an advantage over its rivals in the 3D printing market.

Treating 3D printing as a means to an end, not as an end: HP's main aim was to close its sales but was not inclined to use 3D printers as its products. However, 3D printing offers a compatible production technology for workflow, making it crucial in digital manufacturing. This strategy would help capture, store and analyze HP's customers and mass customization. Recommendation and its Implementation HP should maintain a competitive advantage over other enterprises in the market by focusing on increasing its technology awareness among its current and potentially 3D printing products' potential customers. HP should improve its routes of promoting technology awareness, such as the 3DaaS Service and the 3D hubs. Creating technological awareness is vital, especially with the influences that the Covid-19 pandemic has imposed on the market.

HP should increase its share of value capture by cementing its position as a 3D printing technology provider to reduce the high margins registered by the companies that 3D print the parts of new applications developed. About 70-90 % of the created margin is often captured by the organization that 3D prints parts of newly developed applications. HP needs to reduce this margin. 14 Limitations and Critique of Recommendation HP struggles to maintain a competitive advantage over its rivals in its industry by focusing on improving its technology. Its competitors are also making necessary changes to accommodate the market change, so HP has to make the most effective changes, which may be expensive. However, HP faces the inevitable challenge of the ever-changing technology, meaning that its recommendations will be affected and will need to change with the change in external forces. As HP aims to increase its value share, its concentration will shift. The shift from its goals and main purpose might make HP lose its market share, profits, and positioning in the market. As HP focuses on 3D printing, it may relax its course and effectiveness in other sectors or products. 15 Exhibits Exhibit 1: External Analysis  3D Printing and Digital Manufacturing have created a range of additive manufacturing solutions and materials to help customers succeed in their additive and digital manufacturing endeavours. With the help of its partners, HP offers a wide range of solutions.

 All devices on the market will benefit from the use of this Service. To satisfy the needs of a dispersed workforce, it offers a broad choice of possibilities for communication.

 HP: The global economy is uncertain, making it difficult for HP to maintain a steady revenue stream. It's not simple for HP since the company relies on worldwide sales, which is why it's difficult. The company's revenues would suffer as the price of its products rises due to the increasing cost of raw materials and labour. 16 Exhibit 2; VRIO ANALYSIS Value Chain Activities Specific Attributes Along the Value Chain V R In W/S/DC/SDC O Competitive Implication:

Likely to have Purchasing high-quality inputs Yes No - Strength Yes Competitive Parity Inventory Holding reliable supply able to meet unexpected orders on short notice Yes Yes No Yes - Yes Strength Sustainable Distinctive Competence Yes Yes Competitive Parity Sustainable Competitive Advantage Design & Engineering speciality containers for multiple purposes Yes Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage Manufacturin g inconsistent product quality No - - Weakness - Competitive Disadvantage * Distribution speedy & flexible delivery Yes Yes No Distinctive Competence Yes Temporary Competitive Advantage Sales fast, reliable order processing Yes Yes Yes Sustainable Distinctive Competence No Unrealized Sustainable Competitive Advantage 17 Service & Tech Support speedy & competent maintenance and quality technical advice NO Yes Yes Sustainable Distinctive Competence Yes Sustainable Competitive Advantage HP's ability to adapt to varied external environments and regional cultures is a unique resource that has helped the firm gain better penetration, increased accessibility, stronger brand recall, and greater exposure. Customers want to return because of the company's comprehensive approach to customer service, which includes various touchpoints. Technology innovation and integration at HP is also valuable resource for gaining an edge in the marketplace.s EXHIBIT 3; FINANCIAL ANALYSIS: RATIO ANALYSIS Name of the Ratio Year Year Year PROFIT RATIOS 2021 2020 2019 1. Return on Investment 137.31 85.79 87.87 2. Return on Assets 16.84 8.2 9.4 3. Return on Equity -394.12 -127.64 -264.20 4. Gross Margin 21.13 18.42 19.01 5. Operating Margin 8.35 6.11 6.59 6. EBIT Margin 8.3 6.11 6.59 7. EBITDA Margin 9.58 7.5 7.8 8. Pre-tax Profit Margin 11.83 5.7 4.29 9. Net Profit Margin 10.23 5.02 5.36 LIQUIDITY RATIOS 1. Current Ratio 0.76 0.78 0.79 2. Quick Ratio ACTIVITY RATIOS 1. Asset Turnover Ratio 1.64 1.63 1.75 2. Inventory Turnover Ratio 6.3 7.7 8.2 3. Receivable Turnover Ratio 11.52 10.52 9.7 4. Days Sales in Receivables 31.68 34.67 37.46 LEVERAGE RATIOS 1. Debt to Assets Ratio 2. Debt to Equity Ratio -3.03 -4.54 -2.79 3. Long-term Debt to Capital Ratio 4. Interest-Coverage Ratio SHAREHOLDER-RETURN RATIOS 1. Total Shareholder Returns 16.76 10.86 10.50 2. Price-Earnings Ratio 3. Market-to-Book Ratio 4. Dividend Yield 2.68 4.04 3.77 18 5. Book Value Per Share -1.5 -1.7 -0.8 6. Operating Cash Flow Per Share 2.21 -0.01 0.2 7. Free Cash Flow Per Share 2.14 0.019 0.07 Consolidated income statement 2021 2020 DOLLAR S %NET VALUE DOLLAR S %NET VALUE Net revenue 63487 100% 56639 100% Cost revenue 50,070 78.9 % 46,202 81.6 % Gross profit 13,417 21.1 % 10437 18.4 % Research and development 1,907 3.0 % 1478 2.6 % Selling, general and administrative 5,741 9.0 % 4906 8.6 % Restructuring and other charges 245 0.4 % 462 0.9 % Acquisition-related charges 68 0.1 % 16 Amortization of intangible assets 154 0.2 % 113 0.2 % Earnings from operations 5,302 8.4 % 3,462 6.1 % Interest and other, net 2,209 3.4 % (231) (0.4)% Earnings before taxes 7,511 11.8 % 3,231 5.7 % (Provision for) benefit from taxe s (1,008) (1.6)% (387) (0.7)% Net earnings 6,503 10.2 % 2,844 5.0 % The criteria show the firm's core strengths and limitations. Liabilities have decreased. It's excellent for the corporation to save that much. HP's disclosure of contingencies also impacts the company's perception and potential benefits or losses. In 2021, the company's net sales increased 13% to $63.5 billion. In 2021, EPS rose from $2.00 to $5.33. Over time, the company may be able to raise enough funds to implement the proposals. The company will finance plans through 19 cash reserves and equity loans. Overall, the ratios have improved. Mid-range ratio, but rising. It is reported as an impairment charge to Interest and others.

Exhibit 4; COMPREHENSIVE STRUCTURE OF A STRATEGIC ALTERNATIVE  Jet Fusion 5200 Series 3D printing system  Tackles key customer concerns scaling to full production  The 3D printer integrates advancements in systems and materials.

 Reduce carbon footprint and speed product development by working with digital manufacturing service providers (DMSPs).

FEASIBILITY JUSTIFICATION FOR THIS STRATEGIC ALTERNATIVE  HP has technologically progressed beyond prototyping  HP had to overcome industrial clients' corporate inertia. It was necessary for key decision-makers with conventional industrial mindsets to undergo essential behavioural changes to adopt 3D printing.

 The weakness; HP's corporate goals, and the corporation still had to confront the share value 20 Exhibit 5; EVALUATION OF ALTERNATIVES BY CRITERIA Criteria Focusing on vertical HP's focus on core competence Shareholders Net Present Value Provide NPV number here along with units of money Provide NPV number here along with units of money Stakeholders Customers Effect: Positive Level of effect:

High Effect: Positive Level of effect:

High Employees Effect: Negative Level of effect:

Moderate Effect: Positive Level of effect:

High Environment (Sustainability) Effect: Negative Level of effect:

Low Effect: Negative Level of effect:

Moderate Competitors Effect: Negative Level of effect:

High Effect: Positive Level of effect:

High  While 2D printing saves money, switching to 3D printing may cost HP market share.

Also, the company may reduce R&D expenses. 21  The 'push factor' represents the industry's increased agility and adaptability. 3D's efficiency and resilience in supply-demand matching will be the pull factor.

Exhibit 6; Implementation Schedule / Action Plan  A strong position as a 3D printing technology supplier would help HP expand its value capture share and diminish the high margins enjoyed by firms that 3D print components for novel applications, according to Bain Capital analysts.

 HP could strengthen its technological awareness campaigns, like the 3DaaS Service.

Increasing technology understanding is critical, particularly in light of the Covid-19 pandemic's commercial impact. This might provide the firm with a competitive edge.

References https://s2.q4cdn.com/602190090/files/doc_financials/2021/q4/0302cd18-964e-4bee-b427- d313202a7dd9.pdf