Hewlett-Packard's primary strength is its financial position. The company has a significant amount of cash on hand-more than $10 billion at the end of 2008, and it maintains a low debt position. The company has enough cash to pay off its long-term debt in its entirety with nearly $3 billion remaining. This puts the company in a strong position to take advantage of market opportunities, and is more impressive because the company recently acquired EDS. The company was also able to increase its inventory turnover from 2007 to 2008, but in an indication that HP also suffers from the downturn in the economy overall, its accounts receivable turnover declined slightly (2008 Hewlett Packard Annual Report, 2009).
The acquisition of EDS is critical to HP's success, and without that acquisition, the company's sales would have had nearly $5 billion less in sales. The acquisition causes other problems for HP, including integrating the new company into the much larger HP, although the Compaq acquisition in the 1990s ultimately proved successful. This time, HP must quickly resolve redundancies and integrate the two corporate cultures in order to remain successful. In addition, HP needs to address its underlying weakness that was camouflaged in part by EDS's contribution both to revenues and the company's bottom line (Bylund, 2009).
There are numerous opportunities that can play to HP's strengths. The company forecasts that the global "digital data set" will double approximately every 18 months, and that data needs to be manipulated, stored, processed and printed. These are the core competencies of HP. The company was also once largely dependent on hardware, but today it combines hardware with software and services so that it is able to offer the right products to the marketplace. It is also able to continue to use its large cash reserves to invest in ac
...