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HEWLLET-PACKARD

SUBMITED TO:

MAAM JAWHIR

SUBMITED BY:

SANA ALI

JINNAH UNIVERSITY FOR WOMEN

DEPARTMENT OF COMMERCE

B.S - 4

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COMPANY PROFILE

Hewlett-Packard Company (NYSE: HPQ), commonly referred to as HP, is a consumerelectronics corporation headquartered in Palo Alto, California, USA. HP is the world'slargest technology company and operates in nearly every country. HP specializes indeveloping and manufacturing computing, storage, and networking hardware, softwareand services. Major product lines include personal computing devices, enterprise servers,related storage devices, as well as a diverse range of printers and other imaging products.HP markets its products to households, small to medium size businesses and enterprisesboth directly, via online distribution, consumer-electronics and office-supply retailers,software partners and major technology vendors.

HP posted US $91.7 billion in annual revenue in 2006, compared to US$91.4 billion for IBM,making HP the world's largest technology vendor in terms of sales. In 2007 the revenuewas $104 billion, making HP the first IT Company in history to report revenues exceeding

$100 billion. HP is the largest worldwide seller of personal computers, surpassing rivalDell, according to market research firms Gartner and IDC reported in January 2010 the gapbetween HP and Dell widened substantially at the end of 2009, with HP taking a near 8.3%market share lead. HP is also the 6th largest software company in the world. In 2008 HPretained its global leadership position in inkjet, laser, large format and multi-functionprinters market. Also HP became #2 globally in IT services as reported by IDC & Gartner. It is one of the only American PC-focused computer companies publicly traded under theNYSE.

Major company changes include a spin-off of part of its business as Agilent Technologies in1999, its merger with Compaq in 2002, and the acquisition of EDS in 2008, which led to

combined revenues of US$ 118.4 Billion in 2008 and a Fortune 500 ranking of 9 in 2009. InNovember 2009, HP announced the acquisition of 3Com.

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COPMANYS CORE INFORMATIONType Public: (NYSE: HPQ)

Founded: Palo Alto, California (1939)

Founder(s):

Bill Hewlett

Founder David Packard

Founder

H eadquarters: Palo Alto, California, USA

Area served : Worldwide

Key peo ple:

Mark V. Hurd

President, CEO & Chairman

Catherine A. Lesjak

CFO

Ann M. Livermore

EVP, Enterprise Business

Todd Bradley

EVP, Personal Systems Group

Vyomesh Joshi

EVP, Imaging & Printing GroupShane V. Robison

EVP, Chief Strategy & Technology Officer

Pete Bocian

EVP, CAO

Randy Mott

EVP, CIO

Marcela Perez de Alonso

EVP, HR

I ndustry:

y Computer Systems

y Computer Peripherals

y Computer Software

y Consulting

y IT Services

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Pr oducts:

y Computer Monitors

y Digital Cameras

y Indigo Digital Press

y Networkingy Personal Computers and Laptops

y PersonalDigital Assistants

y Printers

y Scanners

y Servers

y Storage

y Televisions

Revenue: US$ 118.364 billion (2008)

O perating inc ome: US$ 10.473 billion (2008)

N et inc ome: US$ 10.473 billion (2008)

T otal assets: US$ 113.331 billion (2008)

T otal equity: US$ 38.942 billion (2008)

E m pl oyees: 325,000 (after 3Com acquisition) (2008)

Divisi ons:

y Compaq

y Snapfish

y HP Labs

y ProCurve

y HP Enterprise Services

y VoodooPC

W ebsite: www. HP.com

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HISTORY

The 30s:

Following graduation as electrical engineers from StanfordUniversity in 1934, Bill Hewlett and Dave Packard go on atwo-week camping and fishing trip in the ColoradoMountains during which they become close friends. Billcontinues graduate studies at MIT and Stanford while Davetakes a job with General Electric. With the encouragement of Stanford professor and mentor Fred Terman, the twodecide to start a business "and make a run for it"themselves. Hewlett-Packard Company is founded January1, 1939.

K EY P OIN TS OF 30s:

y Formation: Dave and his wife Lucile move into the first floor flat of a house at 367Addison Avenue, Palo Alto, California. Bill rents the shed behind the house, and Billand Dave begin part-time work in the garage with $538 in working capital. The $538consists of cash and a used Sears-Roebuck drill press.

y HP's first product : the resistance-capacitance audio oscillator (HP 200A), anelectronic instrument used to test sound equipment.

y HPs first order: The Walt Disney Company orders eight Model 200B oscillators.

Disney engineers use the equipment to test the various channels, recordingequipment and speaker systems in the twelve specially-equipped theaters that showDisney's innovative Fantasia in 1940.

The 40s

Products from the fledgling company win excellent acceptanceamong engineers and scientists. The start of World War IIturns a trickle of U.S. government orders for electronicinstruments into a stream and then a flood. HP builds the first

of its own buildings and adds several new products.

As HP grows, Bill Hewlett and Dave Packard create amanagement style that forms the basis of HP's famously opencorporate culture and influences how scores of latertechnology companies will do business. Dave practices amanagement technique eventually dubbed "management by walking around" whichis marked by personal involvement, good listening skills and the recognition that "everyone

HP's first product, the 200A

audio oscillator

Dave Packard practices"management by walking

around"

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in an organization wants to do a good job." As managers, Bill and Dave run the companyaccording to the principle later called management by objective communicating overallobjectives clearly and giving employees the flexibility to work toward those goals in waysthat they determine are best for their own areas of responsibility.

HP also establishes its open door policy opens cubicles and executive offices without doors to create an atmosphere of trust and mutual understanding. The open door policyencourages employees to discuss problems with a manager without reprisals or adverseconsequences.

Bill and Dave make other important management decisions: providing catastrophic medicalinsurance, using first names to address employees (including themselves), and throwingregular employee parties and picnics.


y Movement to new place: HP moves from the garage behind Dave's apartment torented buildings at Page Mill Road and El Camino Real in Palo Alto.

y They give something unusual to their employee:Bill and Dave support his familyfinancially. Even more significant, they establish a companywide catastrophic healthinsurance plan, something almost unheard of at the time.

y HP become leader with their innovation:HP enters the microwave field withsignal generators developed for the Naval Research Laboratory and a radar-jamming device. At the end of the war, HP makes the critical decision to continue in

the microwave field; this area quickly becomes an important and growing share of the company's business, with HP the acknowledged leader in signal generators.

y HP got incorporated: HP is incorporated August 18, 1947. Dave is named president, Billvice president. The HP catalog features 39 products, and Dave tells participants at a NewYork trade show, "HP's future appears very promising.

The 50s

Hewlett-Packard goes through a growing and maturingprocess in the 1950s, learning much about the "new"

technology of electronics and about the internal effects of growth. "How" the company should grow is as hotlydebated as "how much" the company should grow. HPhammers out its corporate objectives the basis of itsspecial management philosophy and the core of the HPWay.

Production work in Palo Alto,

California in 1957

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The company goes public in 1957. In keeping with Bill Hewlett and Dave Packard's respect for workers, HP takes the then-unusual step of giving stock grants to employees.

The growing company begins building on the site that will become its corporateheadquarters in Palo Alto, California. HP also embarks on a path toward globalization,establishing manufacturing and marketing operations in Europe.


y HP converts time from minutes to seconds: HP invents the high-speed frequencycounter (HP 524A) and greatly reduces the time required (from about 10 minutes toone or two seconds) to measure high frequencies.

y HP breaks records to be the first company to turn their revenues from 5

millions to 20 millions in just 1 year: HP produces its first oscilloscopes: models130A/150A. Oscilloscopes, which show the variations in a fluctuating electricalquantity as wave forms that are visible on a screen, will form a significant part of HP's test and measurement products. Which account for billions of dollars inrevenues.

y HP become public: HP becomes a publicly traded company. Its initial publicoffering is held November 6, 1957 for $16 per share. All employees at all levels withsix months of service receive an automatic stock grant and become eligible for astock option program.

y HPs creativity even in their objective line: In keeping with the company'spractice of management by objective, the purpose of these objectives is to serve as aday-to-day guide for management decision-making in a rapidly growing company."We thought that if we could get everybody to agree on what our objectives wereand to understand what we were trying to do, then we could turn them loose andthey would move in a common direction," Dave later says about the meeting.

y The HP line HP WAY what does it means? The objectives cover seven points:profit, customers, and fields of interest, growth, our people, management andcitizenship. These management philosophies, radically different from the top-down

management style of many companies, serve as the basis of HP's management style,which comes to be known as the "HP Way."

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HP START ITS INTERNATIONALIZATIONHP plans to get globalized but they made very up to mark strategies before going into

another market.

y Initial studying: They first list out their close countries where the technological

advancement was on the top. So the result they got was European market.

y Preparation for capital to utilize in the new market: They need a heavy amount of capital to go in to European countries so they make its first acquisition: F.L. MoseleyCompany of Pasadena, California, producer of high-quality graphic recorders. Thismarks HP's entry into the business of plotters, a precursor to HP's printer business.

The company establishes a division structure so that its growing size does not result in a loss of nimbleness. Each product group becomes a self-sustaining organizationresponsible for developing, manufacturing and marketing its own products. Any

group that grows to 1,500 people is divided with the resulting groups having theirown profit-and-loss accountability. This decentralization allows the company toreact to changing conditions, move quickly and get away from an overlybureaucratic structure.

y Actual work begins: Bill sees new possibilities for U.S. companies in Europe based on

two developments: the 1957 Treaty of Rome and the European Common Market. He

travels to Europe to investigate setting up HP operations there.

y HP becomes a global company. As a result of Bill's scouting trip, the companyestablishes a European marketing organization in Geneva, Switzerland, and a

manufacturing plant in Boeblingen, Germany. From this base, HP steadily expandsits European operations.

y HP implements an employee stock purchase plan. HP acquires the Boonton RadioCorporation. The New Jersey-based company developed, manufactured and soldelectronic test instruments. The newest member of the HP family broadens theproduct line and includes impedance measuring devices and aircraft navigation test equipment.

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4PS OF HP AT THE TIME OF INTERNATIONALIZATION

(30s -40s)

y PRODUCT: they were making instrument to test the sound quality

y PRICE: the charge premium price as they had monopoly in the sound

testing device

y PLACE: They were local distributer and they enter in the European market

first.

y PROMOTION: it was completely B2B marketing.

SWOT ANALYSIS

(30s 40s)STRENGHTS:

y They were innovators of their product

y They had monopoly

y They were backed and supported by government

y They became first public listed electronic company

y It was dream work place for every person

WEAKNESS:

y They had limited market

y They had a limited product line and they only deal in high-tech

THREAT:

y As they were very much diversified due to media and arm force

y They had to face restriction due to arm forcey They face competition in media sector

OPPORTUNITIES:

y They could get in to international market as they were listed and wont face any

difficulties.

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PRODUCT WISE ENTRENCE IN OTHER COUNTRIES

NAME OF

PRODUTS

COUNTRY YEAR MODE OF

BUSINESS

Radio transistors Geneva, Switzerland 1959 Built their own

manufacture plant

5100A Canada 19692 Joint venture

5102B Japan 1963 Joint venture to a

Japanese company

and they used there

name as well as they

used HPYChemical analyzer Pennsy, livanries 1965 They acquire the

company. They were

having a share in

market but now they

fully acquire the

company

Green light monitors Germany 1967 Project venture

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CANADA AND HP

Canada is a country occupying most of northernNorth America, extending from the Atlantic Ocean in

the east to the Pacific Ocean in the west and northward into the Arctic Ocean. It is the world's second

largest country by total area. Its common border with the United States to the south and northwest is

the longest in the world.

CULT U RE :

Canadian culture has historically been influenced by British, French, and Aboriginal cultures and

traditions. It has also been heavily influenced by American culture because of its proximity and

the high rate of migration between the two countries. The great majority of English-speaking

immigrants to Canada between 1755 and 1815 were Americans from the Thirteen Colonies.

During and immediately after the War of Independence, 46,000 American Loyalists came to

Canada. Between 1785 and 1812; the Late Loyalists immigrated to Canada in response to

promises of land.

L ANGU AGE :

Canada's two official languages are English and French. Official bilingualism is defined in the

Canadian Charter of Rights and Freedoms, the Official Languages Act, and Official Language

Regulations; it is applied by the Commissioner of Official Languages. English and French have

equal status in federal courts, Parliament, and in all federal institutions. Citizens have the right,

where there is sufficient demand, to receive federal government services in either English or

French, and official-language minorities are guaranteed their own schools in all provinces and

territories.

RE LIGION :

Support for religious pluralism is an important part of Canada's political culture. According to

the 2001 census, 77.1% of Canadians identify as being Christians; of this, Catholics make up the

largest group (43.6% of Canadians). The largest Protestant denomination is the United Church

of Canada (9.5% of Canadians), followed by the Anglicans (6.8%), Baptists (2.4%), Lutherans

(2%), and other Christians (4.4%). About 16.5% of Canadians declare no religious affiliation, and

the remaining 6.3% are affiliated with non-Christian religions, the largest of which is Islam

(2.0%), followed by Judaism (1.1%). The number of Muslims in Canada is projected to be some

1.8 million in 2017.

E DU AC AT ION :

Canadian provinces and territories are responsible for education. Each system is similar, while

reflecting regional history, culture and geography. The mandatory school age ranges between

57 to 1618 years, contributing to an adult literacy rate of 99%.Post-secondary education is

also administered by provincial and territorial governments, which provide most of the funding;

the federal government administers additional research grants, student loans, and scholarships.

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In 2002, 43% of Canadians aged 25 to 64 possessed a post-secondary education; for those aged

25 to 34, the rate of post-secondary education reached 51%

E T HI C S AN D V ALU E OF C ANADIAN BU SINE SS:

Enhancing and maintaining public trust in the institutions of government is fundamental to thework of the Public Service of Canada. All employees must ensure their actions and decisions

uphold the values of the public service and conform to high ethical standards as expressed in

the Values and Ethics Code.

C ANADIAN CULT U RE AN D I TS E FF E C T ON H P

y Canada has the highest per capita immigration rate in the world driven by economic

policy and family reunification. In 2001, approximately 250,640 people immigrated to

Canada.

y The newcomers settle mostly in the major urban areas of Toronto, Vancouver and

Montreal. By the 1990s and 2000s, the largest component of Canadas immigrants camefrom Asia, including the Middle East, South Asia, South-East Asia and East Asia.[16]

y Canadian society is often depicted as being very progressive, diverse, and multicultural.

Accusing a person of racism in Canada is usually considered a serious slur.

y Canadian political parties are now cautious about criticizing their country's high level of

immigration, because, as noted by the Globe and Mail, "in the early 1990s, the old

Reform Party was branded 'racist' for suggesting that immigration levels be lowered

from 250,000 to 150,000."

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JAPAN AND HP

Japan is an island country in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea

of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the

north to the East China Sea and Taiwan in the south. The characters which make up Japan's

name mean "sun-origin", which is why Japan is sometimes identified as the "Land of the RisingSun".

Japan is an archipelago of 6,852 islands. The four largest islands are Honsh, Hokkaid, Kysh

and Shikoku, together accounting for 97% of Japan's land area. Most of the islands are

mountainous, many volcanic; for example, Japans highest peak, Mount Fuji, is a volcano. Japan

has the world's tenth-largest population, with about 128 million people. The Greater Tokyo

Area, which includes the de facto capital city of Tokyo and several surrounding prefectures, is

the largest metropolitan area in the world, with over 30 million residents.

CULT U RE :

The culture of Japan has evolved greatly over millennia, from the country's prehistoric Jmon

period to its contemporary hybrid culture, which combines influences from Asia, Europe and

North America. After several waves of immigration from the continent and nearby Pacific

islands (see History of Japan), the inhabitants of Japan experienced a long period of relative

isolation from the outside world during the Tokugawa shogunate until the arrival of "The Black

Ships" and the Meiji period.

L ANGU AGE :

The Japanese language has always played a significant role in Japanese culture. The language is

spoken mainly in Japan but also in some Japanese emigrant communities around the world. It isan agglutinative language and the sound inventory of Japanese is relatively small but has a

lexically distinct pitch-accent system. Early Japanese is known largely on the basis of its state in

the 8th century, when the three major works of Old Japanese were compiled. The earliest

attestation of the Japanese language is in a Chinese document from 252 A.D.

Japanese is written with a combination of three scripts: hiragana, derived from the Chinese

cursive script, katakana, derived as shorthand from Chinese characters, and kanji, imported

from China. The Latin alphabet, rmaji, is also often used in modern Japanese, especially for

company names and logos, advertising, and when inputting Japanese into a computer. The

Hindu-Arabic numerals are generally used for numbers, but traditional Sino-Japanese numerals

are also commonplace.

RE LIGION :

Many religions are practiced in Japan but most Japanese follow Shint or Buddhism. Generally

they do not associate themselves exclusively with one of these, but incorporate features of

both into their daily lives in a process known as syncretism. Shinto and Buddhism are even

taken to as being interwoven in the country. Japanese streets are decorated on Tanabata, Obon

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and Christmas. Japan grants full religious freedom allowing minority religions like Christianity,

Islam and Sikhism to be practiced. According to the CIA World Fact book and the Japanese

Agency for Cultural Affairs 84% to 96% adhere to Shinto and Buddhism while 4% to 16% of the

demographic population adhere to other religions or non-religious, atheist groups. However,

such high numbers come primarily from birth records, following a longstanding practice of

family lines being officially associated with a local Buddhist temple and not the people trulyfollowing the religion. The majority of Japanese carries on the roles of one or more religious

body, but do not consider them believers in one particular religion, but are syncretistic.

M AT ERIAL AN D E LE M EN T:

E C ONOM Y :

In the years following World War II, government-industry cooperation, a strong work ethic,

mastery of high technology, and a comparatively small defense allocation (1% of GDP)

helped Japan develop a technologically advanced economy.

y Today, measured on a purchasing power parity basis, Japan is the third-largest economy

in the world after the US and China; measured by official exchange rates, however,

Japan is the second largest economy in the world behind the US.

y Two notable characteristics of the post-war economy were the close interlocking

structures of manufacturers, suppliers, and distributors, known as keiretsu, and the

guarantee of lifetime employment for a substantial portion of the urban labor force.

y Both features are now eroding under the dual pressures of global competition and

domestic demographic change.

y Japan's industrial sector is heavily dependent on imported raw materials and fuels.

y A tiny agricultural sector is highly subsidized and protected, with crop yields among the

highest in the world In October 2007 Japan's longest post-war period of economic

expansion ended after 69 months and Japan entered into recession in 2008, with 2009

marking a return to near 0% interest rates.

y The 10-year privatization of Japan Post, which has functioned not only as the national

postal delivery system but also, through its banking and insurance facilities, as Japan's

largest financial institution, began in October 2007, marking a major milestone in the

process of structural reform; however, in December 2009, the Democratic Party of

Japan-led government passed a law to freeze future sales of Japan Post shares, halting

the privatization process begun by Liberal Democratic Party governments.

IN F RAST RUC T U RE :

Japan has a very advanced and well-maintained infrastructure, which undergoes regular

upgrading and expansion. Both the private and public sectors undertake various infrastructural

projects and operate their respective services.

Japan has a very extensive and modern road network. It consists of 1,152,207 kilometers

(715,981 miles) of highways, of which 863,003 kilometers (536,270 miles) are paved. They

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include 6,114 kilometers (3,799 miles) of expressways. The number of motor vehicles increased

from 70,106,536 in 1995 to 73,688,389 in 1999. Major development projects to expand the

Japanese highway network include a $32-billion project for the construction of a second Tomei-

Meishin Expressway, connecting Tokyo and Kobe via Nagoya. The length of Japan's railways is

23,670 kilometers (14,708 miles), more than half of which is electrified. Japan is famous for its

high-speed trains.

E DUC AT ION :

In Japan, an education is compulsory at the elementary and lowers secondary levels. Virtually

all students progress to the upper secondary level, which is voluntary. Most students attend

public schools through the lower secondary level, but private education is popular at the upper

secondary and university levels.

The schooling years in the Japanese education system are segmented along the lines of 6-3-3-4:

6 years of primary or elementary school; 3 years of middle or junior high school; 3 years of high

school; and 4 years of university. Many private schools, however, offer a six year programmedincorporating both junior high school and high school. Specialized schools may offer a five year

programmed comprising high school and two years of junior college. There are two options for

tertiary education: junior college (two years) and university (four years).

J AP AN AN D I TS E FF E C T ON H P

HI ST ORY

HP enters the Asian market and forms its first joint venture, Yokogawa Hewlett-Packard (YHP),

in Tokyo, Japan, with Yokogawa Electric Works. By 1963, overseas sales already account for 18

percent of HP's business; the largest foreign markets are Western Europe, Canada and Japan.

J AP AN ASIAN H U B OF H P:

y As Japan always work with in HP to support it technical need.

y Together they have launched many products

y HP has capture the Asian market through Japan

y When HP enters the Japanese market it does not face any difficulties as Japan always

welcome new technologies

y Together Japan and HP say Our research in Seamless Collaboration aims to extend

telepresence from fixed infrastructure solutions to everyday devices.

y Hp and japans upcoming device The desire to move beyond the limits of todaysunnatural mouse and keyboard-based user interfaces to include stylus, touch, speech,

hand gestures, and other forms that can be used individually or integrated for a

multimodal experience.

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P OLI T I C AL EN V IRON M EN T OF J AP AN :

The politics of Japan is conducted in a framework of a parliamentary representative democratic

monarchy, where Prime Minister of Japan is the head of government. Japanese politics uses a

multi-party system. Executive power is exercised by the government. Legislative power is

vested in the Diet, with the House of Representatives and the House of Councilors. TheJudiciary system of Japan is an independent entity. In academic studies, Japan is generally

considered a constitutional monarchy with a system of civil law.

L AW OF J AP AN :

The modernization of the Law of Japan was based on the European legal system. At the

beginning of Meiji era, the system of Europe especially the civil law of Germany and France -

was the model of the Japanese court system and legal system. However, after the Second

World War, the Japanese legal system underwent major legal reform. Constitutional law and

criminal procedure law, which are most important for the protection of human rights, were

revised by modeling American law. Therefore, it is possible to say the Japanese legal system is ahybrid of continental and Anglo-American law. Japanese Constitutional Law was adopted in

1946 after the Second World War. The Japanese Constitution contains thirty-one articles

relating to human rights and it also provides for the separation of three powers: Legislative,

Judicial and Governmental power

E FF E C T OF LEGEAL SY ST E M

U S AN D J AP AN RE L AT ION S:

y 1952 security pact, the new treaty provided for a ten-year term, after which it could be

revoked upon one year's notice by either party. The treaty included general provisionson the further development of international cooperation and on improved future

economic cooperation.

y A qualitatively new stage of Japan-United States cooperation in world affairs appeared

to be reached in late 1982 with the election of Prime Minister YasuhiroNakasone.

Officials of the Ronald Reagan administration worked closely with their Japanese

counterparts to develop a personal relationship between the two leaders based on their

common security and international outlook.

y Of course, there also were instances of limited Japanese cooperation. Japan's response

to the United States decision to help to protect tankers in the Persian Gulf during the

IranIraq War (198088) was subject to mixed reviews.y In either countries, new or "revisionist" views of the Japan- United States relationship

were promoted. In Japan some commentators argued that the United States was weak,

dependent on Japan, and unable to come to terms with world economic competition.

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GERMANY AND HP

As Europe's largest economy and second most populous nation (after Russia), Germany is a key

member of the continent's economic, political, and defense organizations. European power

struggles immersed Germany in two devastating World Wars in the first half of the 20th century

and left the country occupied by the victorious Allied powers of the US, UK, France, and theSoviet Union in 1945. With the advent of the Cold War, two German states were formed in

1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic

Republic (GDR). The democratic FRG embedded itself in key Western economic and security

organizations, the EC, which became the EU, and NATO, while the Communist GDR was on the

front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War

allowed for German unification in 1990. Since then, Germany has expended considerable funds

to bring Eastern productivity and wages up to Western standards. In January 1999, Germany

and 10 other EU countries introduced a common European exchange currency, the euro.

C ulture of Ger many

German culture began long before the rise of Germany as a nation state. Due to its rich culture,

Germany is often known as das Land der Dichter und Denker (the land of poets and thinkers).

German literature can be traced back to the middle Ages, with the most notable authors of the

period being Walther von der Vogelweide and Wolfram von Eschenbach. The Nibelungenlied,

whose author remains unknown, is also an important work of the epoch, as is the Thidrekssaga.

The fairy tales collections collected and published by Jacob and Wilhelm Grimm in the 19th

century became famous throughout the world.

L ANGU AGE :

German is a West Germanic language, thus related to and classified alongside English and

Dutch. It is one of the world's major languages and the most widely spoken first language in the

European Union. Globally, German is spoken by approximately 105 million native speakers and

also by about 80 million non-native speakers. Standard German is widely taught in schools,

universities and Goethe Institutes worldwide.

RE LIGION :

The German government has limited responsibilities for culture, which is devolved to the states

of Germany, called Länder. 64.1 percent of the German population belongs to Christian

denominations. 31.4 percent are Roman Catholic, and 32.7 percent are affiliated with

Protestantism.

CU ST OM S AN D T RADI T ION S:

The Weihnachten as Christmas is known in Germany is celebrated with much gusto and

enthusiasm. The first of December to the twenty-fourth is known as the Adventszeit or the

Advent Season and the Germans observe some of the ancient traditions including children

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writing letters to Christkindl or the Christ Child, enacting the nativity scenes and visiting the

Christkindlmarkt or Christmas Markets. The St. Nicholas's Feats Day celebrates the generosity of

the warm saint who gifted the most desired things to all.


E C ONOM Y :

y The German economy - the fifth largest economy in the world in PPP terms and Europe's

largest - is a leading exporter of machinery, vehicles, chemicals, and household

equipment and benefits from a highly skilled labor force.

y The modernization and integration of the eastern German economy - where

unemployment can exceed 20% in some municipalities - continues to be a costly long-

term process, with annual transfers from west to east amounting in 2008 alone to

roughly $12 billion.

y These advances were undone by the global financial crisis that began in 2008 and

subsequent economic downturn, which drove Germany's export-driven economy into itsdeepest recession since World War II. GDP grew just over 1% in 2008 and contracted

roughly 5% in 2009.

y Germany crept out of recession in the second and third quarters of 2009, thanks largely

to rebounding manufacturing orders and consumer demand, and will recover to about

1.5% growth for the year 2010.

IN F RAST RUC T U RE :

Germany has one of the world's most developed transportation and communication

infrastructures. Intensive investment since reunification in 1990 has brought the undeveloped

eastern Germany in line with that of western Germany. Transport and communications utilitiesin Germany have been liberalized following EU requirements. A dense and efficient network of

motorways, railways, and waterways connects the country with major centers and the world. In

2000 the total length of paved highways was 650,891 kilometers (404,444 miles), including

11,400 kilometers (7,083 miles) of express-ways. More than 45 million motor vehicles were on

the road, causing high road usage and frequent traffic jams, but the lack of speed limits on

highways helped alleviate traffic problems.

E DUC AT ION :

Responsibility for the German education system lies primarily with the Bundesländer (states)

while the federal government only has a minor role. Optional kindergarten education is

provided for all children between three and six years old, after which school attendance is

compulsory for mostly 11 to 12 years. Compulsory school attendance applies to students of

German citizenship, students of foreign citizenship residing in Germany, and stateless students

residing in Germany.

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F INANI C AL M ARK E T:

The Frankfurt Stock Exchange is one of the biggest and most efficient exchange places in the

world. It is owned and operated by Deutsche Börse, which also owns the European futures

exchange Eurex and clearing company Clearstream.

The Frankfurt Stock Exchange has over 90 percent of turnover in the German market and a big

share in the European market. Here the Frankfurt Stock Exchange floor trading loses, but in fast

developing and expanding electronic trading (Extra trading system) the FSE gains in European

and international trade: partner-exchanges adopted the Extra (trading system) (as the Vienna

Stock Exchange in 1999, the Irish Stock Exchange in 2000 and the Budapest Stock Exchange in

2003); consolidation continues.

E FF E C T OF GERM AN CULT U RE ON H P

HI ST ORY :

HP becomes a global company. As a result of Bill's scouting trip, the company establishes a

European marketing organization in Geneva, Switzerland, and a manufacturing plant in

Boeblingen, Germany. From this base, HP steadily expands its European operations.

GERM ANY E U ROP EAN H U B OF H P:

y It was the first country in which hp enters

y It was know as innovation hub of their time new technology

y In the 1940s, an Austrian émigré and Hollywood glamour girl helps the U.S. war effort by

inventing a radio-control device for torpedoes that is immune to jamming.

y

The Lamarr-Antheil patent expired after 17 years and was not renewed, but all laterpatents for spread spectrum technology acknowledge the original. He was working with

HP corporation as controller of 5102B

y In Germany you are welcome to HP's largest subsidiary, where the ideas of over 8000

people from more than 60 nations contribute to our organization's world-wide success.

y The US is Germanys principal trading partner outside the EU and Germany is the USs

most important trading partner in Europe. 2007 saw once again an increase in the

volume of bilateral trade in goods (on a dollar basis)

y German takes third place after Spanish and French among the foreign languages taught

at private secondary schools, colleges and universities in the US.

y Some 16 million American soldiers lived in Germany with their families in the years after

the Second World War, coming to appreciate the country and bringing the American

way of life to us. While there are an almost endless number of German-American

associations, they are devoted more or less exclusively to cultivating German customs

and tradition

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P OLI T I C AL EN V IORN M EN T:

Politics of Germany take place in a framework of a federal parliamentary representative

democratic republic, whereby the Chancellor is the head of government, and of a plurality

multi-party system. Federal legislative power is vested in the parliament (Bundestag) and the

Bundesrat as the representation of the regional states. Since 1949, the party system has been

dominated by the Christian Democratic Union (CDU) and the Social Democratic Party of

Germany (SPD).

The Judiciary of Germany is independent of the executive and the legislature. The political

system is laid out in the 1949 constitution, the Grundgesetz (Basic Law), which remained in

effect with minor amendments after 1990's German reunification.

The constitution emphasizes the protection of individual liberty in an extensive catalogue of

human rights and also divides powers both between the federal and state levels and between

the legislative, executive, and judicial branches.

L AW SY ST E M :

The modern German legal system is a system of law which is founded on the principles laid out

by the Basic Law for the Federal Republic of Germany, though many of the most important laws

as for example most regulations of the civil code (Bürgerliches Gesetzbuch, or BGB) were

developed prior to the 1949 constitution. It is composed of public law (öffentliches Recht),

which regulates the relations between a citizen/person and the state or two bodies of the state

(including criminal law) and the private law (Privatrecht) which regulates the relations between

two people or companies and the criminal law.

U S AN D GERM AN RE L AT ION :

GermanAmerican relations are the transatlantic relations between the Federal Republic of

Germany and the United States of America. Today, the United States is regarded as one of

Germanys closest allies and partners outside the European Union.

y The contributions of German and American scientists to various fields of science are

countless, as are the co-operations between academics from both countries

y German scientists have provided invaluable contributions to American technological

advancement, especially in the mid-20th century.

y In the post-war era, a number of institutions, devoted to bring the characteristic aspects

of American culture and society into the awareness of Germans, were established and

are in existence today, especially in the south of Germany, the area of the former U.S.

Occupied Zone.

y The good professional contacts between government agencies on both sides are

underlined by the regular visits to the US by Federal Chancellor Merkel and her

government ministers.

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PAKISTAN AND HP

Pakistan (Urdu: ), officially the Islamic Republic of Pakistan, is a country in South Asia. It

has a 1,046-kilometre (650 mi) coastline along the Arabian Sea and Gulf of Oman in the south

and is bordered by Afghanistan and Iran in the west, India in the east and China in the far

northeast. Tajikistan also lies very close to Pakistan but is separated by the narrow WakhanCorridor. Thus, it occupies a crossroads position between South Asia, Central Asia and the

Middle East.

CULT U RE :

Pakistani society is largely hierarchical, with high regard for traditional Islamic values, although

urban families have grown into a nuclear family system because of the socio-economic

constraints imposed by the traditional joint family system. Society and culture of Pakistan

comprises numerous diverse cultures and ethnic groups from the Punjabis and Sindhis in the

east to the tribal cultures of the Baloch and Pashtun in the west and the ancient Dardic in the

north. These Pakistani cultures have been greatly influenced by many of the surroundingcountries' cultures, such as those of Turkish, Persian, Afghan, and Indians of South Asia, Central

Asia and the Middle East.

RE LIGION :

Pakistan is the second-most populous Muslim-majority country and also has the second-largest

Shi'a population in the world.[10] About 95% of the Pakistanis are Muslim, of which nearly 75%

are Sunni and 20% are Shi'a.[14] Although the two groups of Muslims usually coexist peacefully,

sectarian violence occurs sporadically.

L ANGU AGE :

Pakistan has two official languages: Urdu (which is also the national language) and English. In

addition there are five major regional languages: Punjabi, Pashto, Saraiki, Sindhi, and Balochi.


E C ONOM Y :

The economy of Pakistan is the 27th largest economy in the world in terms of purchasing

power, and the 48th largest in absolute dollar terms. Pakistan has a semi-industrialized

economy which mainly encompasses textiles, chemicals, food processing, agriculture and otherindustries. Growth poles of Pakistan's economy are situated along the Indus River. Islamabad

has steadily raised development spending in recent years, including a 52% real increase in the

budget allocation for development in FY07, a necessary step toward reversing the broad

underdevelopment of its social sector.

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SOC IAL IN F RAST RUC T U E :

y Everyone in society has his own definition of his social status as superior in power,

privilege and prestige taken together or singly.

y While one defines one's social status as superior to that of others in terms of power,

privilege or prestige, one also realizes or acknowledges the inferior aspect of one'sstatus in any one of the three aspects. The lower groups justify their superiority in non-

material terms; the top groups may explicitly or implicitly acknowledge their inferiority

in terms of degrees of the three aspects of their status.

y Decision on the superior aspect and inferior aspect of one's status is consciously made

by constantly comparing one's status with that of others at various intra-and inter-

societal levels.

y In the comparing process, one consciously weighs one's deprivations against one's

possessions and attempts to compensate either by asserting one's possessions of

certain aspects of social status (power, privilege or prestige) or by acquiring the

deprived aspect.

F INAN C IAL M ARK E T:

With the economy finally responding strongly to the monetary stimulus in FY03, the SBP

retained its accommodative monetary policy through most of FY04 in order to sustain the

growth momentum and drive real GDP growth above the desired long-term growth target of

over 6 percent. In doing so, however, the SBP was well aware of the need to strike a balance

between supporting growth and the risk of accelerating inflation and therefore sought, as a

policy, to stabilize interest rates, as indicated in the Monetary Policy Statement for H1-FY04.

E DUC AT ION :

Education in Pakistan is divided into five levels: primary (grades one through five); middle

(grades six through eight); high (grades nine and ten, leading to the Secondary School

Certificate); intermediate (grades eleven and twelve, leading to a Higher Secondary School

Certificate); and university programmes leading to graduate and advanced degrees.

Pakistan also has a parallel secondary school education system in private schools, which is

based upon the curriculum set and administered by the Cambridge International Examinations,

in place of government exams. Some students choose to take the O level and A level exams

through the British Council.

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E FF E C T OF CULT U RE ON H P:

Hp links to Asia through Japan so indirectly Pakistan deals with Japan to get hp product.

P OLI T I C AL EN V IORN M EN T:

Recently the Politics of Pakistan has taken place in the framework of a federal republic, where

the system of government has at times been parliamentary, presidential, or semi-presidential.

In the current semi-presidential system, the President of Pakistan is the head of state, the

Prime Minister is head of government, and there is a multi-party system. Executive power is

exercised by the government. Legislative power is largely vested in the Parliament.

LEGAL SY ST E M OF P AK I ST AN :

Court system of Pakistan is made up of many courts differing in levels of legal superiority and

separated by jurisdiction. Some of the courts are federal in nature while others are provincial.

Pakistan has three levels of federal courts, three divisions of lower courts, and a SupremeJudicial Council. District courts exist in every district of each province, with civil and criminal

jurisdiction. The High Court of each province has appellate jurisdiction over the lower courts.

The Supreme Court has exclusive jurisdiction over disputes between and among provincial

governments, and appellate jurisdiction over High Court decisions.

U S AN D P AK I ST AN RE L AT ION :

The United States established diplomatic relations with Pakistan started on October, 20th in

1947. The relationship since then was based primarily on U.S. economic and military assistance

to Pakistan. Pakistan is a Major non-NATO ally of the United States.

y After the September 11, 2001 attacks in the United States of America, Pakistan became

a key ally in the war on terror with the United States.

y In 2003,US officially forgives US$1b in Pakistani debt in a debt ceremony in Pakistan as

one of the rewards for Pakistan joining the U.S war on terror 'Today's signing represents

a promise kept and another milestone in our expanding partnership.

y On 11th June, 2008, a US airstrike on the Afghan-Pakistani border killed 10 members of

the paramilitary Frontier Corps. The Pakistani military condemned the airstrike as an act

of aggression, souring the relations between the two countries.

y Pakistan's relations with the United States developed against the backdrop of the Cold

War. Pakistan's strategic geographic position made it a valuable partner in Westernalliance systems to contain the spread of communism.

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PRODUCT LIFE CYCLE (LAPTOPS)

IN T RODUC T ION :

TOUCHSMART TM2

Review: The HP TouchSmart tm2 is a 12.1 inch swivel touch screen laptop. It is powered by Intel

Core 2 Duo processors and makes use of ATI Mobility Radeon graphics. The multi-touch screen

is usable by both fingers and pens, and it comes with a multi-gesture touchpad that has no

buttons other than the pad itself. It is energy efficient and can last for nine hours on a six cell

battery. The HP TouchSmart tm2 comes loaded with software, including a product by Netflix;

finger friendly Coral Paint, an interactive dolphin screensaver and the BumpTop 3D desktop.

The physical design of the laptop is very similar to the new line of HP Envy laptops with some

color and pattern options.

Price: it is available for $945 in rupees starting from 100,000

Advertising: Fun on the run The HP TouchSmart tm2 Notebook PC builds on the 'capacitive touch' technology of the

popular TouchSmart tx2 Notebook PC which gives fingertips precise accuracy leaving users free

to enjoy exclusive HP TouchSmart apps. A world of entertainment including gaming, music, film,

and video and photo apps is available to tap into. Customers can also stay organized with

touchable calendar and email programs.

Gr ow th:

ENVY

Review: Now that Windows 7 is starting to close the gap with Apples operating system, its

only fitting that it runs on systems that come closer to Apples vaunted design. One of the first

to approach this ideal is the HP Envy 13 (starting at $1,699; $1,899 as configured). In both looks

and performance, this system meets or exceeds all of its Windows competitors. However, the

Envy 13 costs $500 more than the 13-inch MacBook Pro. For that premium, HP rewards you

with faster performance, switchable graphics, a brighter screen, and up to 14 hours of battery

life (with the optional slice). However, the Envy 13 has a few flaws that otherwise prevent this

system from being the ultimate ultraportable.

Price: it is costing from 75,000 to 100,000

M aturity:

PAVILLION

Review: In 1995, Hewlett-Packard introduced a line of personal computers known as HP

Pavilion (applied to both desktops and laptops product range). It is unusual because most

manufacturers treat their desktop and laptop products as separate product lines.

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The Pavilion comes with a CD-RW drive and a DVD drive. The drives have automatic doors that

open and close when you push a button on the hardware box. Their operation is very smooth

although the doors consist of flimsy plastic bits. The keyboard is a bit smaller than others but

functional. The mouse has two buttons and a scroll wheel, and it is fairly generic. Windows is

preloaded on the computer and consumers get a Word perfect, for word processing which

claims to be compatible with MS Word.

HP Pavilion has all the features as in any desktop and is the perfect choice for daily needs. The

innovative design enables consumers to enjoy the best entertainment and productivity

experience. The hp pavilion notebooks are available in the following series. They are dv8000

series, dv5000 series, dv2000 series and dv1000t.

Price: starting from 50,000 to 70,000

DE CLINE ST AGE :

OMNIBOOK

These PCs have a full range of different solutions that simplify your work making it more

productive and faster. You cannot afford not to bye it since it represents a unique tool with

exceptional performance characteristics.

The HP OmniBook 2100 configurations now integrate Intel Mobile Pentium processors with

ultra-modern MMX technology and feature exceptional RAM expansion to a maximum of 288

MB making it possible to work with different applications running at the same time without loss

of speed and high performance. SDRAM technology allows you to expand your hard disk space

up to 4.0 GB and store all your favorite file and applications without any problems. These

notebook PCs have the full range of common docking solutions - from a simple port replicator

that provides basic cable management to a full docking system with monitor stand that offers

the ultimate in network connectivity, security, and expandability.

These solutions work interchangeably across the entire new HP OmniBook line to lower the

total cost of ownership for large enterprises. This model is designed with a flexible module bay

that allows you to hot swap a standard floppy disk drive or 24X-max-speed CD-ROM drive (you

can use the CD-ROM and floppy drives simultaneously), a Zip drive, a second battery that

doubles runtime, or a 2X digital video disk (DVD) drive. Flexibility means investment protection

when future technologies such as DVD become commonplace. Every HP Factory installed

Windows 95 or NT 4.0 allow you to enjoy the most modern environments, which are capable of changing your whole point of view on how to work with your files and applications. It is

upgradeable to Windows 98 giving you even more you could expect.

Price: starting from 30, 00 to 40,000

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5 FORCES FACTOR

Apple

Sony

Dell

Buyers include

Asian market

through china and

Japan

HP doesnt have

any suppliers it

have its own

industry for

everything else its

metal finish

material

China

makers Japanese

Samsung

Google

Russian

market

Indian

market

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Rivals: HPs no 1 rival is APPLE this company have hard-hitting competition with HP as HP and

APPLE both stands for innovation they are always in competition as for the war of market

share. HPs other competitors also include Sony and dell they also hits the share of HPs market.

As for there competition HP has launched its many product against them.

Substitute: Laptops are which substitute is table PC. As concern to those PCs HP has also have a

product line it. But now PCs consumers are switching over to non-branded PC which is more

reasonable and low cost maintains .Chinese are giving this market.

New entries: new entrance are Google which is now fast launching it on operating system the

strategy of Google is to capture the software the base market of computer industry and then

launch it own pc and laptop through collaboration. Same is Indian market doing India has nowlaunched there own microprocessor and Russian market is also in head for doing this.

Input supplier: as HP is totally globalized the input supplier has no effect on its price and

distribution as they make all the parts from a single button to there own motherboard. HO has

gathered its all supplier so bounded that it doesnt face any kind of pressure from supplier.

Buyer: as concern to HP the names well known for its globalization HP has very saturated

market. HP has no pressure of prices as HP every series has 5 to 6 models so the price range is

vast this is the competitive advantage of HP.

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COMPANY VALUE CHAIN

PRIMARY ACTIVITIES:

We utilize a number of contract manufacturers (CMs) and original design manufacturers

(ODMs) around the world to manufacture HP-designed products. The use of CMs and ODMsisintended to generate cost efficiencies and reduce time to market for certain HP-designed

products.

Third-party OEMs manufacture some products that we purchase and resell under the HP

brand. In addition to our use of CMs and ODMs, we currently manufacture finished products

from components and sub-assemblies that we acquire from a wide range of vendors.

We utilize two primary methods of fulfilling demand for products: building products to order

(BTO) and configuring products to order (CTO). We employ BTO capabilities to maximize

manufacturing efficiencies by producing high volumes of basic product configurations. CTO

permits configuration of units to the particular hardware and software customizationrequirements of certain customers. Our inventory management and distribution practices in

both BTO and CTO seek to minimize inventory holding periods by taking delivery of the

inventory and manufacturing immediately prior to the sale or distribution of products to our

customers.

We purchase materials, supplies and product subassemblies from a substantial number of

vendors. For many of our products, we have existing alternate sources of supply, or such

sources are readily available. However, we do rely on sole sources for laser printer engines,

LaserJet supplies and parts for products with short life cycles (although some of these sources

have operations in multiple locations).

We are dependent upon Intel as a supplier of processors and Microsoft for various software

products. However, we believe that disruptions with these suppliers would result in industry-

wide dislocations and therefore would not disproportionately disadvantage us relative to our

competitors. We also have a valued relationship with AMD, and we have continued to see

greater acceptance of AMD processors in the market during fiscal 2006.

Like other participants in the high technology industry, we ordinarily acquire materials and

components through a combination of blanket and scheduled purchase orders to support our

requirements for periods averaging 90 to 120 days. From time to time, we experience

significant price volatility and supply constraints of certain components that are not available

from multiple sources.

Frequently, we are able to obtain scarce components for somewhat higher prices on the open

market, which may have an impact on gross margin but does not disrupt production. On

occasion, we acquire component inventory in anticipation of supply constraints or enter into

longer-term pricing commitments with vendors to improve the priority and availability of

supply. See Risk FactorsWe depend on third-party suppliers, and our revenue and gross

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margin could suffer if we fail to manage supplier issues properly, in Item 1A, which is

incorporated herein by reference.

A pplicati on Gl obalizati on Services prepare the code during the development cycle, localizing

and testing. We start with assessment and training services to set the overall scope of the

solution. We work with you to investigate the current status of existing localization solutionsand evaluate them in relation to business needs and best practices.

As a next step, our internationalization services begin reparation for streamlined and efficient

localization efforts. We develop a single, internationalized code base, including double-byte,

Unicode and bi-directional enabling. As a natural follow-up, our localization services will

combine expert linguistic know-how with state-of-the-art engineering technology to meet all of

your foreign-market needs.

SUPPORTACTIVITY:

Software design and localization are decoupled. All languages are treated in the same way. Adatabase contains the text strings for all languages, and automated tools aid the translator.

The HP Component Monitoring System is an international product designed for a worldwide

market. Among the requirements for the product were introduction Of localized versions

simultaneously with the shipment of the standard product, full Asian language support, and low

incremental effort for localization in any new language.

Research and Development We remain committed to innovation as a key element of HPs

culture. Our development efforts are focused on designing and developing products, services

and solutions that anticipate customers changing needs and desires and emerging

technological trends. Our efforts also are focused on identifying the areas where we believe we

can make a unique contribution and the areas where partnering with other leading technology

companies will leverage our cost structure and maximize our customers experiences.

HP Labs, together with the various research and development groups within the five principal

business segments, are responsible for our research and development efforts. HP Labs is part of

our Corporate Investments segment. Expenditures for research and development in fiscal 2006

were $3.6 billion compared to $3.5 billion in fiscal 2005 and $3.6 billion in fiscal 2004. We

anticipate that we will continue to have significant research and development expenditures in

the future to provide a continuing flow of innovative, high-quality products and services to

maintain and enhance our competitive position.

For a discussion of risks attendant to our research and development activities, see Risk

Factors If we cannot continue to develop, manufacture and market products and services

that meet customer requirements for innovation and quality, our revenue and gross margin

may suffer, in Item 1A, which is incorporated herein by reference.

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DISTRIBUTION

Our products and services are available worldwide. We believe this geographic diversity allows

us to meet demand on a worldwide basis for both consumer and enterprise customers, draws

on business and technical expertise from a worldwide workforce, provides stability to our

operations, allows us to drive economies of scale, provides revenue streams to offset

geographic economic trends and offers us an opportunity to access new markets for maturing

products. In addition, we believe that future growth is dependent in part on our ability to

develop products and sales models that target developing countries. In this regard, we believe

that our broad geographic presence gives us a solid base to build upon for such future growth.

A summary of our domestic and international net revenue and net property, plant and

equipment is set forth in Note 18 to the Consolidated Financial Statements in Item 8, which is

incorporated herein by reference. Over 60% of our overall net revenue in fiscal 2006 came from

outside the United States. The substantial majority of our net revenue originating outside the

United States was from customers other than foreign governments.

For a discussion of risks attendant to HPs foreign operations, see Risk FactorsDue to the

international nature of our business, political or economic changes or other factors could harm

our future revenue, costs and expenses and financial condition, in Item 1A, Quantitative and

Qualitative Disclosure about Market Risk in Item 7A and Note 9 to the Consolidated Financial

Statements in Item 8, which are incorporated herein by reference.

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MARKETING

Business study:

Hp is a globalized company the intended The company is also taking an active role in

developing the capacity of new markets all around the world, engaging with othermultinational corporations, non-governmental organizations and other world governing bodies

to reignite the competitiveness at home and abroad through policies and strategies that can

support free-market economies. This is one of the reasons that make HP a leading technology

company in the growing IT markets

During fiscal 2006, our operations were organized into seven business segments: Enterprise

Storage and Servers (ESS), HP Services (HPS), Software, the Personal Systems Group

(PSG), the Imaging and Printing Group (IPG), HP Financial Services (HPFS) and Corporate

Investments. Given the solution sale approach across our enterprise offerings, and in order to

capitalize on up-selling and cross-selling opportunities, ESS, HPS and Software are structured

beneath a broader Technology Solutions Group (TSG). While TSG is not a business segment,this aggregation provides a supplementary view of our business. In each of the past three fiscal

years, industry standard servers, technology services, desktops, notebooks and printing

supplies each accounted for more than 10% of our consolidated net revenue.

IT need:

TSG provides servers, storage, software and information technology (IT) services that enable

enterprise and midmarket business customers to better manage their current IT environments

and transform them into a business enabler. TSG products help accelerate growth, minimize

risk and reduce costs to optimize the business outcomes of customers IT investments.

Companies around the globe leverage HPs infrastructure solutions to deploy next generationdata centers and address business challenges ranging from compliance to business continuity.

TSGs modular IT systems and services are primarily standards-based and feature differentiated

technologies in areas including power and cooling, unified management, security, virtualization

and automation.

Business segments:

Industry Standard Servers: Industry standard servers include primarily entry-level and mid-

range ProLiant servers, which run primarily on the Windows,(1) Linux and Novell operating

systems and leverage Intel Corporation (Intel) and Advanced Micro Devices (AMD)

processors. The business spans a range of product lines that include pedestal-tower servers,density-optimized rack servers and Windows is a registered trademark of Microsoft

Corporation.

HPs BladeSystem family of blade servers: In fiscal 2006, HPs industry standard server business

continued to lead the industry in terms of units shipped. HP also has a strong position in blade

servers, the fastest-growing segment of the market. Business Critical Systems. Business Critical

Systems include Itanium(2)-based Integrity servers running on the HP-UX, Windows, Linux and

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OpenVMS operating systems, including the high-end Superdome servers and fault-tolerant

Integrity NonStop servers. Business Critical Systems also include the Reduced Instruction Set

Computing (RISC)-based servers with the HP 9000 line running on the HP-UX operating

system, HP AlphaServers running on both Tru64 UNIX(3) and OpenVMS, and MIPs-based

NonStop servers.

Storage: HPs StorageWorks offerings include entry-level, mid-range and high-end arrays,

storage area networks, network attached storage, storage management software and

virtualization technologies, as well as tape drives, tape libraries and optical archival storage.

We manage our business and report our financial results based on the principal business

segments described above. Our customers are organized by consumer and commercial

customer groups, and distribution is organized by direct and channel. Within the channel, we

have various types of partners that we utilize for various customer groups. The partners

include:

retailers that sell our products to the public through their own physical or Internetstores;

resellers that sell our products and services, frequently with their own value-added

products or services, to targeted customer groups;

distribution partners that supply our solutions to smaller resellers with which we do not

have direct relationships;

independent distributors that sell our products into geographies or customer segments

in which we have little or no presence;

original equipment manufacturers (OEMs) that integrate our products with their

ownhardware or software and sell the integrated products;

independent software vendors (ISVs) that provide their clients with specialized

software products, frequently driving sales of additional non-HP products and services,and often assist us in selling our products and services to clients purchasing their

products; and

systems integrators that provide various levels and kinds of expertise in designing and

implementing custom IT solutions and often partner with HPS to extend their expertise

or influence the sale of our products and services.

The mix of HPs business by channel or direct sales differs substantially by business and region.

We believe that customer buying patterns and different regional market conditions necessitate

sales, marketing and distribution to be tailored accordingly. HP is focused on driving efficiencies

and productivity gains in both the direct and indirect business.

TSG manages enterprise and public sector customer relationships and also is charged with

simplifying sales processes across our segments to improve speed and effectiveness of

customer delivery. In this capacity, TSG manages our direct sales for value products including

UNIX, enterprise storage and software and pre-sales technical consultants, as well as our direct

distribution activities for commercial products and go-to-market activities with systems

integrators and ISVs. TSG also drives HPs vertical sales and marketing approach in the

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communication, media and entertainment, financial services manufacturing and distribution

and public sector industries. PSG manages SMB customer relationships and commercial reseller

channels, due largely to the significant volume of commercial PCs that HP sells through these

channels. In addition to commercial channel relationships, the volume direct organization,

which is charged with the management of direct sales for volume products such as commercial

PCs and industry standard servers, is hosted within PSG.

IPG manages HPs overall consumer-related sales and marketing activities, including our annual

consumer product launch for the back-to-school and holiday seasons. IPG also manages

consumer channel relationships with approximately 28,000 third-party retail locations for

imaging and printing products, as well as other consumer products, including consumer PCs,

which provides for a bundled sale opportunity between PCs and IPG products. In addition, IPG

manages direct consumer sales through www.hp.com.

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PRICING

HPs stock price has historically fluctuated and may continue to fluctuate, which may make

future prices of HPs stock difficult to predict.

HPs stock price, like that of other technology companies, can be volatile. Some of the factorsthat can affect our stock price are:

speculation in the press or investment community about, or actual changes in, our

executive team, strategic position, business, organizational structure, operations,

financial condition, financial reporting and results, effectiveness of cost cutting efforts,

prospects or extraordinary transactions;

the announcement of new products, services, technological innovations or acquisitions

by HP or competitors; and

quarterly increases or decreases in revenue, gross margin or earnings, changes in

estimates by the investment community or guidance provided by HP, and variations

between actual and estimated financial results.

General or industry-specific market conditions or stock market performance or domestic or

international macroeconomic and geopolitical factors unrelated to HPs performance also may

affect the price of HP common stock. For these reasons, investors should not rely on recent

trends to predict future stock prices, financial condition, results of operations or cash flows. In

addition, following periods of volatility in a companys securities, securities class action

litigation against a company is sometimes instituted. If instituted against HP, this type of

litigation could result in substantial costs and the diversion of management time and resources.

System security risks and systems integration issues could disrupt our internal operations or

information technology services provided to customers, and any such disruption could harmour revenue, increase our expenses and harm our reputation and stock price. Experienced

computer programmers and hackers may be able to penetrate our network security and

misappropriate our confidential information or that of third parties, create system disruptions

or cause shutdowns. In addition, computer programmers and hackers may be able to develop

and deploy viruses, worms, and other malicious software programs that attack our products or

otherwise exploit any security vulnerabilities of our products.

As a result, we could incur significant expenses in addressing problems created by security

breaches of our network and any security vulnerabilities of our products. Moreover, we could

lose existing or potential customers for information technology outsourcing services or other

information technology solutions or incur significant expenses in connection with ourcustomers system failures or any actual or perceived security vulnerabilities in our products.

Conclusion

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After its merger with Compaq it became world's biggest computer hardware and peripherals

company in the world, ranking 20 in the Fortune 500 list. Company is doing business in more

then 170 countries including the ones that are developing and under-developed. Being a large

company gives HP many advantages like dominating the market for printers, both laser and

inkjet, and both for consumers and companies using the economies of scale. The company is

also taking an active role in developing the capacity of new markets all around the world,

engaging with other multinational corporations, non-governmental organizations and other

world governing bodies to reignite the competitiveness at home and abroad through policies

and strategies that can support free-market economies.

This is one of the reasons that makes HP a leading technology company in the growing IT

markets (HP Annual Report, 2003). Hewlett-Packard generated nearly $6.1 billion in cash flow

from its operations and increased its cash and equivalents by 3 billion in 2003 (D

atamonitor,2004). Debt levels in this year were also very low which was significantly lower then the

previous year. This is a great advantage which enables the company to increase its

investments.

HP always recognized the need to compete in global markets. Product diversity of the

company is another big advantage that enables the company to hold its position even in the

times of recession. As long as the products are good and have reasonable prices there will be

a demand. Company has a product span from calculators to laser printers , from notebook

computers to servers. The company has a long history of inventions and innovations until it

came to this stage. Research andD

evelopment (R&D

) is foucused on key growth areas like richdigital media, mobility, management softwares and security.

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