Competitive Intelligence Report

SC ANALYTICS ESSENTIALS 33:799:475:90

Steven Yoon

shy34@scarletmail.rutgers.edu

Professor Zhao

Company & Industry

• Industry: Technology Hardware, Storage, & Peripherals

  • Sector: Information Technology

  • With all the recent news of IT companies struggling and conducting massive layoffs, I believed this was a good industry to dive deeper into to understand their struggles and lack of financial growth.

• Company: HP

  • HP still remains one of the top players in the IT industry
  • Stock has only grown about 20% over the last 5 years, and decreased by 5% in the last year

Industry Analysis

• Industry trend analysis
• Concentration and competition intensity
• Value chain analysis

Industry Analysis

• Despite having the largest total revenue, operating income, and median revenue, the Technology Hardware, Storage, & Peripherals industry also has the lowest median operating margin and median net margin

  • High revenue/operating income: Generates a significant amount of sales/revenue and is able to cover its operating expenses sufficiently
  • Low operating margin: Displays that the industry has high operating costs in relation to its sales (high COGS, R&D, labor, etc.)
  • Low net margin: Retains smaller portion of its revenue as profit

• HP is within the top 5 for market share within the Technology Hardware, Storage, & Peripherals industry

  • Everybody is chasing Apple as they are the clear leader of the industry

Competition Positioning Analysis

1. Revenue vs. cost, net income vs. total cost or total assets.
2. Profit frontier, liability asset ratio vs. return on assets
3. Enterprise ranking
4. KPI Examination

Competition Positioning Analysis

• HP remains a top player in the industry as 2nd overall in revenue and 9th in return on assets

  • Despite the high return on assets, they are above average in Liability Asset Ratio

• Apple is the only company consistently outperforming HP in multiple KPIs and categories

Enterprise Diagnosis

1. Strengths vs. Weaknesses

2. Value Driver Analysis

3. Breakdown Analysis

Competitive Intelligence Project

• Overall, HP remains one of the top players in the industry but can still improve in many areas

• Their proportion of net income is still very low compared to the industry average

• The Technology Hardware, Storage, & Peripherals industry generates a great amount of sales/revenue, but need to do better in cutting down costs as the industry's profits, operating margins, and net margins are lower than other industry sectors within the IT industry