Thursday, July 26, 2012

Hewlett Packard (HP)'s WebOS and Touchpad Failure Case Study -Why it failed? What went wrong? What could have HP Done ?

Hewlett Packard (HP)'s WebOS and Touchpad Failure Case Study
This entire case study is posted as different parts as different blog posts (so pls see other posts to get an entire idea)
On August 19, 2011, HP, the second largest PC maker in the world dropped 20% in the New York Stock Exchange. This gigantic fall was triggered by a sequence of events starting July 1, 2011 when the company introduced the HP tablet called Touchpad, powered by WebOS operating system. HP acquired Palm, the maker of webOS, for US$1.2 billion in 2010. By owning WebOS, HP’s strategy was to control both the hardware and software and offer a more unified consumer experience. But, Touchpad with webOS turned out to be something of a toxic asset. Just six weeks after launching the Touchpad, on August 18th, HP cited tepid sales and announced it will discontinue the WebOS-based Touchpad tablet computer and phones. This led to the company’s largest decline in the share market since the market crash in 1987. The drop erased $16.2 billion from the HP market value in just two days. This clearly showcases the investors’ lack of confidence in the company. This report analyzes the company’s long term and short term strategy and how it could have avoided the consumer & investor discontent and gained their confidence instead.
Tablet Market: The Boston Consulting group(BCG) reports that Consumers around the world increasingly see tablets as multipurpose converged devices that are their personal windows onto the Internet and states that Tablet sales are expected to total some 370 million units in five years, achieving a much faster ramp-up than any other consumer-electronics or mobile device. About one-third of the U.S. adult population will own a tablet by 2016, as more people bring them to their workplaces, according to Forrester Research.
Competition Analysis: Apple’s iPad is the world leader in the tablet market and controls a whopping 73% market share according to Forrester Research. Amazon and Barnes & Noble’s vie for second place with a little more than 5% share. Samsung, Sony and Toshiba are trying to gain a place in this luscious market. Most of the players use Android-based OS on their tablets. Innovation has become synonymous with Apple’s name. It enjoys such a huge market share and charges premium because of the high quality of the product it has to offer. When customer’s use an iPad, they see an enhanced product. It has a huge fan base which is very loyal to Apple and its products. It built such a loyal following by being customer centric and promise centric. Actually Ipad is a product people can do without, as it is considered by many as a glorified iPhone. But, Apple has managed to create a “want” by producing an excellent product. Apple overturned the tablet market by offering an ecosystem and not just a product. The success of the iPad, along with the iPhone definitely helped Apple supplant Microsoft as the world’s most valuable technology company last year. Every technology company in the market wants to replicate Apple’s success and sees tablets as a way to achieve it. BCG reports that more than 100 tablets have been introduced since the iPad appeared.

1 comment: