HP attempts to emulate Starbucks, P&G

07 June 2012

NEW YORK: Hewlett-Packard, the IT giant, is looking to learn lessons from companies like Starbucks, the coffee house chain, and Procter & Gamble, the FMCG group, to reignite growth.

Meg Whitman, who took over as HP's CEO eight months ago, argued reversing the firm's fortunes mirrored the huge challenge for Howard Schultz upon returning to an ailing Starbucks in 2008.

"Usually these kinds of turnarounds take anywhere between four or five years," she said, as reported by Bloomberg. "To have HP humming exactly the way I envision it - this is a big undertaking."

Another exemplar was Procter & Gamble under former chief executive AG Lafley's, who almost doubled sales to $83.5bn from 2000-09, not least due to transforming its marketing and innovation.

"There's nothing fancy about these turnarounds. "This is not advanced business, this is 101," Whitman added. "It's about optimising our existing set of businesses to perform as best as they possibly can. They're not ... We have to position ourselves to take advantage of the bigger changes in the technology industry."

Alongside cutting roughly 27,000 jobs, Whitman intends to boost HP's focus on a smaller number of "bigger bets", including cloud computing, networking technology and mobile gadgets like tablets.

"If we can bridge the consumer with the enterprise and create desirable devices, that's a big opportunity for HP," Whitman said. "Ultimately we have to solve the mobility challenge."

Marketing will also play a key role in this process, with all of HP's communications to be based around the tagline "Make it Matter", and an attempt to "tell our story better", according to Whitman.

"When you start a marketing campaign, you always start with the authentic truth about the company because you have to be able to say something that no one else can say and that's authentic about the company," she added.

"What we do makes it matter. It matters to the International Space Station or the Department of Works and Pensions or the U.S. Navy or Alianz or Deutsche Bank or Facebook. It matters what we do."

Jeff Matthews, founder of hedge fund Ram Partners, suggested the obstacles facing HP may more closely reflect the case of IBM, which successfully switched from making PCs to providing services, or Eastman Kodak, the troubled photographic and imaging firm.

"It could break either way," Matthews said. "It could be Kodak, which was long and drawn out. Or maybe it can be like IBM."

Data sourced from Bloomberg/AllThingsD; additional content by Warc staff