In this Blog we will discuss the topic,” How does HP make Money” Hewlett-Packard Company (HP Inc.) is a global manufacturer of personal computers and printer consumables. As well as a range of other products, the firm provides 3D printing services.

how does HP make money

HP makes money by personal computers, such as laptops, workstations, and desktop computers, and also through printers, which may be used to print a variety of supplies, office equipment, and consumer items. Located in Palo Alto, California, HP Incorporation’s corporate headquarters serve as its headquarters.

What is HP?

HP Inc. is a global manufacturer of personal computers and printer consumables that is headquartered in Palo Alto, California. In addition, the firm provides 3D printing solutions as well as a number of other products.

On November 1, 2015, the old Hewlett-Packard Company’s personal computer and printer businesses were rebranded Hewlett-Packard Enterprise, while the organization’s product and services businesses were renamed, Hewlett Packard. Hewlett Packard was renamed to more clearly reflect the company’s enterprise product and business.

HP Inc. became Hewlett-Packard as a result of this split, while HPE became a distinct publicly-traded company. Hewlett Packard Enterprise was formerly known as HPQ and was listed on the New York Stock Exchange under the ticker symbol HPE.

The New York Stock Exchange has decided to put HP in the S&P 500 index (NYSE). In terms of unit sales, it was the world’s second-largest personal computer seller as of January 2021, behind only Chinese behemoth Lenovo in the rankings. According to the Fortune 500 ranking, HP was placed 58th out of 500 businesses.

History of HP

HP Inc. was formerly known as Hewlett-Packard, which was the company’s original name. In 1939, Bill Hewlett and David Packard, both graduates of Stanford University with degrees in electrical engineering in 1935, founded Hewlett-Packard, which later became known as Hewlett-Packard when the firm was rebranded. Bill Hewlett and David Packard were the company’s first employees. The firm’s beginnings may be traced back to Palo Alto, California, where the corporation was founded. It was placed within the HP Garage, which was a convenient location. After splitting its business unit and renaming it Hewlett-Packard Enterprise, the company formed Hewlett-Packard Inc. on November 1, 2015. Hewlett-Packard Enterprise was formerly known as Hewlett-Packard before being split into two distinct companies.

Segments of the business world

Business segments of HP

HP’s Devices, Printing, and Corporate Investments divisions are in charge of the company’s publicly available financial statistics. From desktop and notebook PCs to Workspaces, thin clients to corporate mobility devices to POS systems to screens and the related accessory and software – HP has it all in its Personal Systems category. HP’s printing division provides both personal and business printers, as well as scanners, with products and equipment, solutions, and services. HP’s corporate investments division includes the HP laboratories as well as other particular initiatives.

Personal systems of HP

The personal systems division of Hewlett-Packard has four distinct business areas that are focused on notebooks, desktop computers, workstations, and other products. Put another way, this category is made up of personal computers for individuals and commercial computers for companies. HP’s desktop business includes PCs for both personal and commercial usage, as well as thin clients and point of sale systems for retail establishments. Business-related laptop workstations and equipment are included in the workstations’ business-related component. Services oriented at consumers and companies, as well as personal computer capabilities, are examples of other business fields. In terms of net revenue, private systems accounted for 64 percent of the overall income in the year 2018.

Printing Services of HP

The printing business segment’s global business capabilities include office and home printing, graphic solutions, and 3D printing, among other things. Home appliances, business hardware, and supplies are the three business segments that make up the printing industry’s three business segments: household appliances, corporate hardware, and supplies.

Professional Printing Service, Visual Ideas, and 3D printing are among the commercial hardware options available, apart from the usual supplies. Home printing solutions, excluding supplies, are the consumer hardware portion of the whole system. The supplies business category includes everything from printing and laser capsules to media, visual supplies, 3D printer supplies, Android A4 and A3 supplies, and OEM supplies, all of which are used in Personal and Business Hardware.

HP’s net sales were dominated by the printing industry in 2018, accounting for about 35% of total sales. In 2018, the printing business division of Hewlett Packard earned around $20.8 billion in revenue. The most profitable sector in this sector was printing supplies, which was followed by business software and consumer electronics.

The business Risk of HP

Additionally, HP’s business model is riddled with threats and challenges. Aside from growing competition, HP is dealing with several other difficulties, such as regulatory limitations and supply chain instability.

The PC industry is crowded, with businesses such as Lenovo, Dell, Apple, Acer, and Asus posing significant challenges to HP. Every year, the threat of competition increases, and as a consequence, the competitor is forced to spend more on marketing, research, and innovation than ever before. Furthermore, in 2015, HP separated from HPE to focus only on laptops, desktop computers, and printers exclusively. Each of its rivals invests significantly in quality control and marketing, as well as product development, in order to compete in these areas.

The degree of risk involved with dealing with and complying with regulatory requirements has increased for PC businesses such as HP. Additionally, the firm is under a significant deal of pressure to comply with data privacy requirements, in addition to increased regulatory monitoring. As a consequence of the global economic downturn, the market environment has also become very tough. Profit margins are also being squeezed as a result of changes in the worldwide marketplace and fluctuations in the value of currencies.

The business model of HP

Customer Segments of HP

Customers of HP don’t vary much since the company operates on a mass-market approach. Small and medium-sized companies (SMBs) and major corporations, such as those in the education, health care, and government sectors, are among the company’s target market categories.

Value Proposition of HP

HP’s value propositions are divided into three categories: innovation, accessibility, and brand/status.

Innovation has been ingrained in the company’s culture. Numerous “firsts” in the industry, such as scientific calculators and laser printers, may be credited to it. Apart from R&D departments dedicated to certain business divisions, HP Labs has facilities for brainstorming and developing innovative technology solutions.

Usability is a primary focus for the company. They are “committed to providing accessible products and services for those with disabilities,” according to their “diversity imperative.” As a standalone service or in combination with assistive equipment, it is intended to fulfill the demands of a wide range of users. Simple switches, buttons, and knobs, as well as the appropriate use of contrast levels on the product text, are examples of HP’s attempts to simplify the user interface.

Channels that HP uses

In terms of consumer and small business distribution, HP’s website and large retail shops serve as the company’s key channels (e.g., Best Buy). Major companies are assigned a specialized buying account manager by the company. Among the additional ways of distribution that it employs are distributors and open-source software providers, among others (ISVs).

Customer Relationships of HP

Most HP’s interactions with consumers are conducted via self-service. There is limited interaction between consumers and employees at the organization. On the company’s website, you may get self-help resources such as videos and answers to often asked topics. Thus, peer-to-peer forums, phone, and live chat support, as well as training and certification program, make people feel more connected to the larger community.

Key Activities employed by HP

The process of designing and developing products and services is at the core of HP’s business strategy. It outsources the production of its items to outsourced manufacturers (OMs), the majority of whom are located in Asia, to reduce costs and time to market.

Key Partners

HP has the following important strategic alliances:

  • Chain stores and online merchants that offer their items to the broad public are considered general merchandise retailers.
  • Resellers that specialize in marketing their goods and services to certain target segments.
  • Distributors are individuals that transport products to resellers on behalf of a corporation.
  • OEMs, or original equipment manufacturers, are businesses that integrate and resell a company’s goods and services into their own products and services.
  • The company provides services to its customers via the sale of goods and services provided by independent software vendors (ISVs).
  • Information system integrators who are in charge of the selling of a company’s goods and services.
  • Small and medium-sized enterprises that provide information technology and management consulting services while also using HP goods and services

In conclusion we answered the Question that is “How does HP make money?” We found out that HP makes money by personal computers, such as laptops, workstations, and desktop computers, and also through printers, which may be used to print a variety of supplies, office equipment, and consumer items. Located in Palo Alto, California, HP Incorporation’s corporate headquarters serve as its headquarters.

Frequently Asked Questions (FAQ): How does HP make money

Where does HP make most of their money?

In 2021, HP Inc. expects to generate over $63 billion in revenue, with personal systems accounting for around $43 billion of that total.

How does HP Inc make money?

HP Inc. generates revenue from two distinct business segments: personal computing and printing services. When it comes to being relevant in a quickly changing technological world, HP has placed a strong emphasis on product design and cutting-edge technology.

Where does HP revenue come from?

HP Inc. earns money from two different business segments: personal and printing. HP has concentrated on product design and innovative technologies in order to remain relevant in a rapidly evolving technological environment.

How much money does HP make a year?

HP Inc reported net profits of 6.5 billion dollars in fiscal year 2021, up from 2.8 billion dollars in fiscal year 2020.

Is HP a good company?

Workers at Hewlett Packard Enterprise Company rate it as an excellent place to work at 87 percent, compared to 59 percent at a typical U.S.-based firm. In its corporate operations, leadership is honest and ethical. People are given a great deal of responsibility here.

Why did HP split?

It has opted to divide itself in half in strategies to succeed more efficiently in a technological sector that is retrenching, after growing into a lumbering titan offering personal computers at a time when phones are the leading personal computing device.

References

V. (n.d.). HP Business Model Canvas. Vizologi | rethinking business model design. https://vizologi.com/business-strategy-canvas/hp-business-model-canvas/.

Pratap, A. (2019, April 14). Hewlett Packard Business Model: A Brief Overview | Notesmatic. notesmatic –. https://notesmatic.com/hewlett-packard-business-model-a-brief-overview/.

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