Scheme of Remedies for Misrepresentation

Scheme of Remedies for Misrepresentation In pre-contractual negotiations, one party (the Representor) may make representations to another party (the Representee), which relate, by way of affirmation, denial, description or otherwise, to a statement of fact or present intention. If the representations made are untrue, they may be termed misrepresentations. The Representor may know that the statements are untrue; or they may be careless or reckless as to their truth. Alternatively, the Representor may hold an honest belief as to truth of the statements made. Generally there is no positive duty to act honestly in English Law a misrepresentation cannot be made by silence and even where one party proceeds, fully aware that the other is contracting on the basis of a misunderstanding of some fact, English law does not provide for a remedy. The exceptions are where the facts given are a half-truth, or where a statement is made, circumstances change and the maker of the statement fails to disclose this. Further exceptions are where a contract, such as one for insurance, is treated by the law as being of the utmost good faith and requiring the contracting party to disclose all relevant facts; or where the contract involves a fiduciary relationship such as between a company and its promoters. European Law, by contrast, imposes a positive duty to act in good faith and fair dealing, both during the course of negotiations and where a contract is concluded. It allows avoidance of the contract for fraudulent (deceitful) non-disclosure of information which, in accordance, with the principles of good faith and fair dealing, a party should have disclosed. The duty extends to situations where a contract is not even concluded: for example, where negotiations break down, or where one party is time wasting. This positive duty to act in good faith is common in other jurisdictions, including some common law systems. The scope of remedies for misrepresentation in English law depends on the type of misrepresentation that has occurred. Where the misrepresentation is fraudulent, the law sees the Representor as more blameworthy and the level of damages is not limited by, for example, remoteness, the duty to mitigate, and contributory negligence. The reasons for imposing wider liability on the intentional wrongdoer than on the innocent misrepresentor are certainly moral, but as Lord Steyn notes, the law and morality are inextricably interwoven and, to a large extent, the law is simply formulated and declared morality. It seems ironic, therefore, that there is no remedy whatsoever are where one party deliberately fails to disclose a material fact: an action that is intentionally dishonest, immoral and surely equally blameworthy. To be blameworthy means to be at fault or deserving of blame: from a moral standpoint, it implies conduct for which a party is guilty and deserves reproach or punishment. However, there is a logical consistency to, and a general policy of, not punishing intentional wrongdoers by civil remedies in English law: the primary remedy for civil wrongs is to provide compensatory damages, measured by the claimants loss; and the aim of providing a remedy, frequently cited, is to put the claimant into as good a position as if no wrong had occurred. However, the principles by which the remedies for fraudulent misrepresentation have developed do appear to go beyond this, having a punitive nature in their application. Fraudulent Misrepresentation Where the Representor makes a statement of fact (or a statement of intention, which involves a representation as to the existence of the intention which is itself a present fact) either knowingly, without belief in its truth, or recklessly, i.e., careless as to whether it is true or false, and this fact, being material, induces the other person to enter into the contract, this is a fraudulent misrepresentation. It does not matter that the Representee could have discovered the truth or spurned the opportunity to do so. The test as to whether fraudulent misrepresentation has taken place is whether there is an absence of honest belief; and honesty in this context refers to a subjective appreciation of events. The fact that the statement would not convince a reasonable person does not necessarily make it dishonest; however, where the statement is made recklessly or carelessly, the Court may make a finding of dishonesty, in that the person in question could not reasonably have believed in the truth of their statement. In all cases of fraudulent misrepresentation, however, dishonesty is a crucial factor damages cannot be claimed in deceit on the basis of recklessness alone since the basis of deceit is dishonesty. Where the misrepresentation is fraudulent, the Representee may rescind the contract a remedy available for nearly all types of misrepresentation and he may also recover any benefits that the Representor has enjoyed as a result of the contract being made, prior to the contract being rescinded. The Representee may also claim damages in the tort of deceit, and as noted, the damages are intended to restore the victim to the position he was in before the representation was made. The test for damages in fraud is one of direct consequence, rather than foreseeability, with damages being divided into two categories diminuation in value and consequential losses. Similar to damages for negligence, the House of Lords have confirmed that the Representor will be responsible for a sum representing the financial loss flowing directly from his alteration of position under the inducement of the fraudulent representations of the defendants. Unlike for negligence, however, the damages do not need to be foreseeable; as long as they have been caused by the transaction. This demonstrates that the Representors blameworthiness is important since the benefit of limiting liability to only foreseeable damages is not permitted to the dishonest person as it would be if the representation was made negligently: per Lord Denning in Doyle v Olby, it does not lie in the mouth of the fraudulent person to say that they could not have been reasonably foreseen. This decision was reaffirmed in Smith New Court. Further, the fact that the Representee had every opportunity to avoid the contract or transaction in question, or could have taken proceedings to rescind it, or asserted his rights to have it treated as void in proceedings brought to enforce it, does not bar his claim for damages. Once again, where dishonesty is involved, the law does not allow the misrepresentor any opportunity to reduce his liability, even where there is fault on the part of the Representee. Similarly, the contributory negligence of the Representee does not apply to reduce damages for the tort of deceit. Again, this feature has been applied because the tort involves dishonesty; regardless of the contributory negligence of the Representee, the Representor will have to pay for all damages because the law views him as blameworthy and cannot justify restricting his liability as a result of this. The Representee may also claim for consequential losses, although he is obliged to take all reasonable steps to mitigate those losses on discovery of the fraud. The type of damages that may be awarded to the Representee may include both special and general damages, as for A v B, where the claimant Representee was entitled to an award of  £7,500 in respect of general damages for distress even though his distressed state had not required medical attention. Although the potential heavier damages available to claimants may make a claim in fraudulent misrepresentation seem more attractive, it may be difficult to prove the Representors dishonesty and failure to succeed may result in an action for defamation; a claim under Section 2(1) of the Misrepresentation Act 1967 (MA1967) is more likely to be pursued for these reasons since the remedies available are similar. Negligent Misrepresentation The misrepresentation may alternatively give rise to an action for damages in the tort of negligence, if the statement is made (a) knowingly, (b) without belief in its truth or (c) recklessly, careless whether it be true or false; and a special relationship exists between the parties. A finding of dishonesty is not necessary: provided that it can be established that there is reasonable foreseeability of reliance on the statement and of the harm caused by that reliance. As established in Hedley Byrne, the Representor has a duty of care to do all that is reasonable to make sure their statement is accurate, regardless of the existence of a fiduciary or contractual relationship; only a sufficient degree of proximity between the parties is necessary for an action to be sustained. Such proximity would arise in professional relationships, such as those made with barristers and estate agents, and also in purely commercial transactions where the Representor has superior knowledge and experien ce to that of the Representee and it is reasonable for the Representee to rely on statements made by them. In all cases, it must be just and reasonable for the duty of care to be imposed. The remedies available to the Representee are rescission of the contract and damages in the tort of negligence; and, unlike a claim for fraudulent misrepresentation, damages will be subject to a test of reasonable foreseeability. The Court may however take account of benefits that the claimant has missed out on as a result of the misrepresentation. Despite the difficulties in establishing negligence, it should be noted that actions for negligent misrepresentation have the advantage that they are not limited to misrepresentations that induce contracts; nor are they limited to statements of fact. A parallel can be drawn with principles of European law, which recognise liability for losses during the process of negotiation, even if a contract is not made. However, whereas for negligent misrepresentation in English law a duty of care must be established, in European law no such duty is required. Such losses in European law include those incurred as a result of failure to act in good faith and fair dealing; a positive duty imposed on the parties, which may include failure to disclose pertinent information. Section 2(1) Misrepresentation Act 1967 More commonly, an action for misrepresentation will be made under Section 2(1) of the MA1967 where the misrepresentation results in a contract. Unlike an action in negligence, which requires the Representee to prove that a duty of care existed, the burden of proof is reversed: the Act requires that the Representors prove they had reasonable grounds to believe, and did believe up the time the contract was made, that the facts represented were true, and unless they can do this, they will be liable. This can be difficult to prove: a mere honest belief is not enough. Remedies available to the Representee are similar to those available for fraudulent misrepresentation unless the Representor is able to discharge this burden of proof (and if the Representor can discharge the burden, the Representee may still plead innocent misrepresentation with its consequent remedies). Effectively then, per Royscot Trust Ltd, damages in respect of an honest but careless representation are to be calculated as if the representation had been made fraudulently: this has attracted much criticism as it means in effect that the Courts are required to treat a person who is morally innocent as if he was guilty of fraud. However, under Section 2(1) the loss recoverable does not go beyond the consequences that arise from the negligent misrepresentation: this is narrower than the recoverable loss permitted for fraudulent misrepresentation per Doyle v Olby. In addition, unlike damages for fraudulent misrepresentation, the Court may reduce the sum if there is evidence of contributory negligence on the part of the Representee. The damages under Section 2(1) will be based on direct consequence (as for the tort of fraud/deceit) rather than what was reasonably foreseeable (as for the tort of negligence). In Royscot Trust, the Court of Appeal held that the correct measure of damages was based on the tort of deceit and that the Plaintiff was entitled to recover all losses even if those losses were unforeseeable, provided they were not otherwise too remote. Therefore, the measure for damages for innocent misrepresentation under Section 2(1) is the same measure as for fraudulent misrepresentation. This has since been questioned, however, and in Smith New Court Securities, Lord Steyn asked whether it was correct to treat a person who was morally innocent as if he were guilty of fraud when it comes to the measure of damages. This measure seems incorrect: especially as, per Avon v Swire (where representations as to the future were presented as statements as to existing intention), the section may be used to produce damages on a scale commensurate with fraud where otherwise the contract would allow no damages in the event of breach and there would be no damages for negligent misrepresentation in tort. Innocent Misrepresentation Where the statement made is innocent, in that there is no provable fault, the remedy is rescission of the contract unless the Court awards damages at its discretion under Section 2(2) MA1967; alternatively it may award rescission with an indemnity; the aim of the Court in all cases being not to unjustly enrich the Claimant. The equitable remedies that the Court may award discretionarily may include the setting aside of a deed or other instrument and the restitution of property, with any pecuniary adjustment that might be necessary on either side by way of accounting for profits or allowance for depreciation. Although there is no indication as to the level of damages, it is considered that this should be lower than the damages awarded under Section 2(1), as implied by Section 2(3). The Court exercises its discretion in accordance with the principles of equity and so there may be no remedy offered if the facts as a whole make it inequitable to grant the relief, or if there is improper conduct or suggestion of a harsh bargain on the part of the Representee. Mispresentation and blameworthiness: considerations It has been noted that misrepresentations can be made intentionally, carelessly or recklessly, or innocently. In each case, there is a remedy for the Representee; but the value of that remedy varies based on several factors. We have seen that where fraudulent misrepresentation is proved (for which dishonesty is required), the level of damages awarded may be far greater than for other types of misrepresentation: the Representor must pay all financial losses flowing directly from the misrepresentation. There are few limits to this: the damages do not need to be foreseeable and matters of the Representees conduct, such as the fact that he had the ability to avoid the contract or to discover the dishonesty, does not bar his claim. Similarly, his contributory negligence is irrelevant to the calculation of damages. The only restriction is that Representee needs to take reasonable steps to mitigate his consequential losses. Following the recent case of A v B, we have also seen that general damages may be available for distress suffered, even though this is not medical. Under the MA1967, we have seen that a Representee can claim damages on a scale commensurate with fraud even where the representation was innocent, although these will be limited by any contributory negligence. It seems unjust that the Representees contributory negligence is ignored in fraudulent misrepresentation: this is fault per se on the part of the Representee and if the reason for allowing wider damages is blameworthiness, surely the blameworthiness of the Representee must also be a consideration. The European approach of considering all circumstances, including, but not limited to, whether the Representee could reasonably acquire the information, seems fairer. The flexibility of this approach, in contrast to the unlimited scope of damages in English Law permitted for fraudulent misrepresentation, may demonstrate a better approach to the calculation of damages. The European approach may be contrasted to awards made for innocent misrepresentations in English law, which follow equitable principles; in such cases the conduct of all parties is taken into consideration before reaching a decision. The fault of both parties is balanced in order to reach a decision that is fair to both, and such a system would make a more just compromise between the heavy benefits of a successful claim for fraudulent misrepresentation. It has also been noted that it is entirely illogical that the law should take such an iron-handed approach where the Representor makes a positive statement which he knows to be incorrect; but provide no remedy whatsoever when the same person dishonestly fails to disclose a material fact that he knows would have a material bearing on the contract. James notes that the EU is taking tentative steps towards the abolition of national contract laws of member states, and the replacement with a single European code. If this happens, we will see the introduction of a positive obligation to act in good faith, both in pre-contractual negotiations and in the formation of contracts. This obligation on contracting parties to be open with each other in negotiations is foreign to English law; it has previously been avoided because of principles of contractual freedom and economic efficiency. However, a model which requires honesty and diligence on the part of both parties, and provides for remedies to either party where there is a loss to be made good, with each partys conduct assessed for fairness, seems a far more balanced approach than the present system of remedies in English law for misrepresentation, and accords more with the principle of restitutio in integrum that is inherent throughout our contract law system.

HP Case Study †Strategy Essay

Hewlett-Packard’s personal computer (PC) division operates in a hyper-competitive, highly-commoditized industry subject to dynamic shifts. The PC industry is driven by technological advancements requiring continuing commitment to research and development to capture the ever-changing PC market. For most of the past five years, Hewlett-Packard led the PC industry in terms of market share. However, Hewlett-Packard’s market share is currently declining and recent industry reports indicate that a Chinese low cost PC manufacturer, Lenovo, is now the market share leader. Over four primary sections, we performed an analysis of Hewlett-Packard’s strategy in the PC industry. First, we performed an external industry examination to obtain information on the current conditions of the market, including industry trends, buyer and supplier marketplace power, and emerging market concerns, such as the threat of PC substitutes. Second, we conducted an internal analysis to determine Hewlett-Packard’s top resources, assets and liabilities, and potential capabilities from its value chain. Third, we documented Hewlett-Packard’s current strategic position within the PC industry. Fourth, we examined and scrutinize Hewlett-Packard’s current industry strategy of returning to its core competencies while consolidating aspects of its PC manufacturing and sales. From the information in these sections, we conclude that if Hewlett-Packard is to sustain (or regain) its place as the market leader in the PC industry, it must leverage its brand recognition, economies of scale advantages, and product integration features to capture market value while producing technologically competitive products. Introduction This analysis is focused on the personal computer (PC) segment of Hewlett-Packard (HP). For clarification, HP’s PCs segment includes desktop, laptop, and notebook / netbook computers. Hardware devices falling outside of the PC category are mobile personal computing devices, such as tablets and cellular phones. HP’s PC sales for fiscal year 2012 were $41. 5 billion, which represents 26. 5% of HP’s $120 billion total revenue from all products and services. HP’s PC sales captured a 16% share of the total PC market (Trefis, 2012). From an analytical standpoint, HP has made many significant moves over the past three to four years, including numerous changes in company leadership and distinct shifts in business strategy. As a result, the ultimate effectiveness and success of HP’s strategies discussed has yet to be seen. Therefore, some of the conclusions we draw regarding HP’s forward strategy will be measured by whether HP’s strategic decisions align with its competitive advantages and obligations to stakeholders. External Analysis The global PC industry is led by a small number of large scale manufacturers who are homogenizing products and looking to capitalize on low cost labor resources. Industry demand is driven by technological developments, disposable consumer spending, and corporate spending cycles (First Research, 2012). Although global demand for PCs has increased, profit margins are decreasing, creating an industry focused on price rivalry and little differentiation (MarketLine, 2012). In addition, PC substitutes are a major threat to the PC industry (Indigo, 2012). The traditional PC industry, with its focus on desktops and laptops, is in the mature or declining stage of its life cycle. Our external analysis examines the significant factors influencing the current PC environment, including potential market threats and opportunities during the next five years, and how HP is performing relative to its industry competitors. Exhibit One illustrates the forces currently affecting the PC industry. Threat of New Entrants Overall, the threat of new entrants is low because any new entrants face numerous competitive obstacles in order to obtain industry relevance. The PC industry has significant fixed entry costs and the challenges to compete with the economies of scale of major companies would be exceedingly difficult for potential entrants to overcome. Brand recognition creates another distinct entry barrier because PC consumers have high brand awareness (MarketLine, 2012). With that mentioned, Microsoft and Intel are powerful industry suppliers so the threat for forward integration is reasonable. In addition, the oversaturation of basic PC component suppliers in Southeast Asia poses an additional concern for potential entrants to the industry. New firms could originate in Southeast Asia by leveraging the low cost labor force and avoiding expensive supply chain expenditures. Buyer Power Differentiation: The industry trend is to move manufacturing abroad in order to capture low cost labor efficiencies. There also has been a trend to homogenize products across the industry (Krabeepetcharat, 2012). In order to drive manufacturing costs down, most basic components used in the PC industry are standardized and lack significant differentiation (MarketLine, 2012). The exception differentiators are memory size, processor speed, and product form features (Bradley, 2012). Overall the industry has moved toward commoditization, which strengthens buyer power. Network Effect / Brand Recognition: Regardless of particular PC brand, consumer brand awareness is high in this focal industry. Apple has carved out a unique and loyal customer following largely because its users have higher switching costs than other PC users due to Apple’s specific computer operating system. If Apple consumers were to change to a non-Apple computer, they would be required to learn a new operating system. Apart from Apple computers, the majority of the other PCs run on Microsoft Windows-based operating systems. Consumers of PCs operating on Windows have lower switching costs overall, allowing more independence in switching brands. Despite this, brand awareness is still high among consumers of Windows-based PCs, thus contributing to an overall moderate buyer power rating. Supplier Power Microsoft and Intel are two powerful suppliers to the PC industry. Intel is the leading manufacturer of the processors inside all PCs. Intel’s brand name carries significant brand recognition to end-level consumers providing Intel with a powerful industry position. Similarly, Microsoft’s widely-used Windows operating system provides Microsoft a powerful industry position as well. As mentioned earlier, the manufacture of most basic component PC parts is being outsourced to Southeast Asia to capitalize on low cost labor. Since Southeast Asia is replete with component suppliers competing with one another, major PC manufacturers face low switching costs when deciding on basic component suppliers. Therefore, supplier power in the PC industry is divided between powerful suppliers, such as Microsoft and Intel, and basic component suppliers with relatively little power. However, any examination of supplier power must acknowledge a growing socio-cultural concern regarding working conditions in low-cost labor regions that may factor into business decisions. Substitutes The PC industry has been significantly impacted by the threat of substitutes in recent years. Emerging mobile technologies, such as smart phones and tablets, now account for 61% of total PC market volume (MarketLine, 2012). While smart phones and tablets are strong substitutes for consumer PC purchasers, up to this point mobile devices have not had the same impact on business-end users, who generally chose the robust functionality of traditional PCs over less powerful smart phones and tablets. It is important for PC manufacturers to leverage these capabilities to diminish the functionality gap between PCs and PC substitutes. Degree of Rivalry Market Value Forecast: Future PC sales are projected to generate slimmer profit margins than the current 3. 8% industry average (Krabeepetcharat, 2012). As major manufacturers leverage manufacturing efficiencies abroad, product costs are lowering, creating a degree of rivalry and a focus on end-level costs. Manufacturers are essentially looking to cut costs and offer cheaper products to gain market share (First Research, 2012). Since products within the industry lack differentiation, price competition becomes the default battleground, resulting in ever-shrinking profit margins (Porter, 2007). This is very apparent in the PC industry market forecast (exhibit two), which projects a 10% decrease between 2011 and 2016 (MarketLine, 2012). Apple’s position in this analysis is noteworthy. Apple is the only pure hardware/software integrator, which has allowed Apple to create an incredibly strong position that is unique to the PC industry. Apple’s five-year rolling profit margin average is approximately 23%, significantly higher than the PC industry (exhibit two) at large (YCharts, 2012). Large Scale Manufacturers: Computer manufacturing is labor intensive. Major industry participants have moved manufacturing abroad to take advantage of low cost labor and geographic proximity to electronic component manufacturers (ECMs) in Southeast Asia. This close proximity to ECMs contributes to low switching costs for PC manufacturers (Krabeepetcharat, 2012). Shifting production of PC manufacturing to low cost labor regions and having access to numerous component suppliers creates economies of scale advantages for these large PC manufacturers. HP’s Performance Relative to PC Manufacturing Competitors Since 2007, Hewlett-Packard held the market share leader position (MarketLine, 2012). However, in the fourth quarter 2012, Lenovo, Chinese PC manufacturing firm (formerly IBM’s PC division), overtook the market share leader position (Gaudin, 2012). HP’s brand still carries superior brand integrity in the PC industry. The integration of multiple HP products, such as laptops seamlessly linking to HP printers, help differentiate an HP consumer’s experience. Additionally, HP’s ancillary products and services are still a strong differentiator (Bradley, 2012), and HP was able to capture a 5. 6% profit margin in 2011 (Hughes, 2011), a margin higher than the industry average of 3. 8% (MarketLine, 2012). Exhibit two captures HP’s competitive advantage over top rivals in regards to profit margins. In the United States, HP remains the largest domestic PC manufacturer (MarketLine, 2012). With the high degree of rivalry in the industry, the maturing/declining PC industry is shifting manufacturing to low cost regions abroad. Since the United States is the second-largest PC consuming country in the world, HP must continue to delicately balance its outsourcing activities (Krabeepetcharat, 2012). Once considered a technological leader in the PC industry, HP now struggles with competition from PC substitutes such as tablets and phones. Looking forward, it is critical that HP retains market share and re-establishes profitable growth in the PC industry by being first-to-market with new technologies or higher performing capabilities (First Research, 2012). Internal Analysis As a whole, the PC industry is currently in the mature or declining stage of its life cycle. During the six-year period spanning 2005 to 2011, HP’s unfavorable strategic decisions caused a refocusing and restructuring of its PC division. Listed below are HP’s top resources from its VRIST and top capabilities from its value chain. Comparing these resources and capabilities against HP’s past and current weaknesses allows an analysis of whether HP is propitiously positioned to regain its former status as the world’s leading PC manufacturer. HP’s PC Resources and Capabilities R&D / Intellectual Property Trusted Brand / Profit Margin Interoperability Market Share HP’s PC Weaknesses Acquisitions Substitutions Market Share Trends PC Revenue Trend Value Chain In the Technology section of HP’s Value Chain, HP is returning to one of its long standing core competencies by increasing investments in its Research & Development department (R&D). According to exhibit three, prior to 2004, HP’s R&D budget was more than $3. 7 billion. But after Mark Hurd became CEO in 2005, the R&D budget was reduced to as little as $2. 8 billion in 2009 (Y-charts, 2012). As shown in the lag metrics for new products over the past two years, this significant decrease in R&D correlates directly to the middling success of HP’s recent product launches. HP’s initial launch into the smart phone and tablet market offers tangible evidence of mediocre product development as both the Palm webOS and touchpad were subsequently discontinued. In 2010, HP started to increase its R&D budget again and the reporting for calendar year 2012 shows the R&D budget is over $3. 4 billion through November. This increased financing and refocus into technology development is a promising indicator, but any resulting intellectual property will take time to build back up. VRIST Analysis HP continues to be a trusted PC brand name (FTSE, 2012). Next to its intellectual property, HP’s brand name is its most valuable extraordinary resource. HP manages to earn higher profit margins than the rest of the leading hardware PC manufacturers based in part on this brand awareness (MarketLine, 2012). HP’s trusted brand image is a competitive advantage that it must sustain. Through brand recognition and interoperability with other products across its platform, HP is able to charge consumers a slightly higher premium over other leading PC manufacturers. Interoperability HP expects the interoperability of its Ultrabooks, ElitePad, and smart phones with other HP products and solutions, such as ePrint Cloud Services, to be its distinguishing competitive advantage (video link). HP’s next generation Ultrabooks boast stylish form features, low power consumption, world-class security features, and preserve mainstream price points. HP and its partners anticipate that these features will differentiate its PCs from its competitors (Bradley, 2012) and could one day be an extraordinary resource much like it is for the Apple brand. Since the PC market is facing continued encroachment from tablets and other PC substitutes, HP is marketing its enterprise tablet (ElitePad 900) in early 2013. Additionally, HP’s managers feel its enterprise tablet has the opportunity to differentiate with other products HP offers by providing interplay between the physical and digital worlds (Bradley, 2012). Overall, the size, scale, and connection that HP products have will enable customers to create, store, consume, and share information safer than before (Bradley, 2012). Market Share Since 2007, HP was the leading global PC manufacturer (MarketLine, 2007). But in the fourth quarter of 2012, Lenovo, a Chinese PC manufacturing firm overtook HP and now leads all manufacturers in global PC sales (Gaudin, 2012). Furthermore, China is now the largest global PC consumer market (Dauod, 12). HP faces substantial difficulty regaining its prior spot as market leader because Lenovo’s is a Chinese company with greater access to the China’s PC market; the largest and quickest growing PC market in the world. HP currently manufactures 16% of all PCs shipped worldwide, however that market share has declined since 2010 (MarketLine, 2012). Once a technological leader, HP is now an industry laggard and must develop new marketable technology to maintain its market share position in this hyper-competitive market. Acquisitions HP recently made some costly acquisitions with the goal of reaching product segments with higher profit margins (Krabeepetcharat 2012). Autonomy, a British software firm which specializes in â€Å"unstructured data† or human information, was purchased for nearly $11 billion dollars. HP is now accusing Autonomy of overvaluing its financial records and has taken an $8. 8 billion write-off against its balance sheet for this acquisition (Rushe, 2012). HP also purchased Palm in 2010 for $1. 2 billion with the hope of capitalizing on the emerging tablet market. But consumer sales of HP’s new tablet, the TouchPad, failed to support the product line, and the TouchPad was discontinued less than a year after product launch (Panzarino, 2012). Beyond these noted questionable acquisitions, HP made numerous other eyebrow-raising acquisitions under past CEOs that were not in line with HP’s core competencies. Internal Analysis Conclusion In August 2011, HP’s last CEO announced that HP planned to divest of its PC division (Krabeepetcharat, 2012). However, HP’s current CEO, Meg Whitman, has stated a renewed commitment to the PC segment. Part of HP’s internal strategy is to rebuild the balance sheet through the newly formed Printer and Personal Services (PPS) division in order to accommodate acquisition-related charges (Thacker, 2012). This is part of the CEO’s five-year plan to rebuild HP (Whitman, 2012). While multi-billion dollar write-offs are staggering hurdles for any company to survive, if HP can return to its core competencies and re-brand itself as the company of innovation (as it was once known), then HP can remain a dominant participant in the PC industry. Current HP Strategic Position Our strategy diamond analysis, shown in Exhibit five, determines that HP plans on implementing the following five strategies in the PC industry: (1) Focus on R&D (vehicles) (2) Pursue emerging markets (staging) (3) Reduce SKU’s offered (arenas) (4) Integrated products & services (differentiators) (5) Economies of scale & Consolidation (Economic Logic) Vehicles HP’s primary strategy vehicle is a commitment to R&D in order to re-establish HP as a technologically focused hardware company (Times, 2012). Exhibit 2 illustrates HP’s changing strategy regarding R&D investment. Starting in 2005, HP’s investments in R&D steadily decreased. After reaching its lowest figure in 2010, the R&D budget was increased. In 2011, HP invested $3. 25 billion on R&D, a significant improvement from 2009, when HP invested just $2. 77 billion in R&D (Yarrow, 2012). Interestingly, the bottom chart on Exhibit 2 shows that Apple spent less on R&D than HP but delivered technologically superior products. This exemplifies how R&D spending does not always equate cleanly with results. R&D is critical to generating a pipeline of intellectual property. Intellectual property is critical to HP’s growth because it is one of HP’s extraordinary resources. Strong R&D investments are often a good leading indicator of well-received future products. On the other hand, the lag metrics arising from HP’s previous R&D slashing indicate numerous problems. Of most concern is the failed WebOS that affected both HP’s initial smart phone and tablet touch pad releases (Davis, 2011). After the poor reception of HP’s WebOS, it became open-source software available to the general public to freely use and modify. HP is currently working on developing its own WebOS but is opening the system to the free market to encourage outside development of mobile applications. Staging Pursuing emerging markets such as China will enable HP to produce and distribute PCs more cost effectively. In fact, China is the future hub of both HP’s manufacturing and distribution plan (Bradley, China, 2012). HP’s executive team is aware of China’s increasingly vital role in consumer PC sales. China currently accounts for 20% of the market and is expected to double the United States’ PC consumption by 2016 (Bradley, Shanghi summit, 2012). HP is acting early by building PC manufacturing facilities in China, both to act as a distribution hub for other Asian suppliers and to distribute PCs directly to the Chinese market. Since HP began this strategy two years ago, HP seems to have been correctly following leading indicators and should see a beneficial pay-off over the coming years as China’s market surpasses the United States’ PC market. Arenas HP intends to reduce the number of its PC and printer stock-keeping units (SKUs) by 25% and 30% respectively by 2015 (Bradley, Newsroom, 2012). The maintenance cost of servicing over 2,100 types of laser printers is neither sustainable nor conducive to continued growth and profitability. Instead of divesting the PC division, as considered in 2011, HP now intends to re-invent its existing product line by focusing on quality innovation over quantity of product offerings. Geographically, HP will also be building a Chinese-based manufacturing facility which will help them operate more cost effectively in that emerging market. Differentiators HP expects to differentiate itself from other PC manufacturers by integrating products with services solutions, a process HP has already begun. In March 2012, HP combined its Personal Systems Group (PSG) with its Imaging and Printing Group (IPG) to form a new segment named Printing & Personal Systems (PPS) (Bradley, 2012). According to a HP director, merging the two groups into PPS â€Å"was a key strategy to provide consumers and business customers with better products and solutions that are seamlessly integrated with each other. † For example, upon purchasing a HP laptop, a consumer can expect his or her new laptop to wirelessly find and automatically connect with any of the consumer’s HP printers or other products. In addition, by integrating internal supply chain processes between the old PSG and IPG, and having a single HP sales person selling both PCs and printers, HP can keep the prices of its products and services competitive. It is business strategies such as these that show HP is still forward-thinking and seeking innovative or cost effective technologies. Refer to Exhibit 3 to view one of HP’s marketing videos (HP marketing, 2012). Another example of how the newly-formed PPS group integrates products can be seen in their â€Å"Exstream† product, which has been put to use by Humana and saved millions Humana millions by integrating static and dynamic content for easier communication with clients (HP marketing, Humana, 2012). Economic Logic Economies of Scale: As HP seeks to differentiate its PPS group to drive product innovation, there will be significant cost-saving effects due to increased economies of scale. Essentially, HP will save money by manufacturing more products directly in emerging markets like China. With China’s consumer PC market expected to double that of the United States, HP is ideally situated to take advantageous benefit of China’s emerging market through manufacturing plants and distribution channels located within China. Consolidation: By consolidating its PC and Printing groups, HP strengthened its position in many ways, including lowering costs in the supply chain. In addition to consolidating its supply chain functions, HP is also streamlining its sales teams and reducing its functional support organizations (Bradley, 2012). HP’s current PC strategy of consolidation is a direct byproduct of both a planned decrease in SKUs and the PC manufacturing and consumer sales reaching the ending stage of their lifecycles. If HP can successfully set new standards for PC and printing synergies through consolidation, then HP can create a viable path to maintaining its history of premium pricing via product features. HP Strategic Implementation Based on our analysis, the facets of HP’s strategy diamond are internally consistent. HP’s analyzed strategies are both interconnected and overlapping. For example, being focused on China provides HP with a strong arena given China’s anticipated growth in the consumer PC market. But a presence in China also validates HP’s economic logic by producing lowered costs. Overall, HP’s PC strategy is sound because HP is returning to its core competencies, such as hardware innovation. On a larger scale, HP’s renewed focus on R&D coupled with the creation of the PSG division supports HP’s current desire to grow organically rather than through mergers and acquisitions. One weakness that continues to hamper HP is operating with over $20 billion in debt derived almost entirely from acquisition costs related to fruitless assets. Looking back, HP could have benefited from smarter business plans, including a balanced scorecard, prior to some of these acquisitions. With such information, HP would have had a more realistic chance to make each acquisition profitable, or perhaps it would have had enough qualitative metrics to realize that the acquisition may not integrate with its core processes. Since change in the PC industry is highly iterative, HP must continually adjust the implementation of its forward strategy. Fortunately, HP appears to be taking the necessary steps to address its past failures and to capitalize on future opportunities. Since HP still has industry-wide brand name recognition, its return to market dominance is entirely feasible. But as technology progresses and markets shift, HP’s ability to maintain sustainable growth will depend largely on whether HP’s new PC business strategy can capture value while simultaneously producing competitive, cutting edge products.

Racism And Its Impact On Society - 779 Words

Racism is a concept that has been around for years. It is something that has left its mark, and even scars on our society. It has lefts mark and scars on our businesses, schools, churches, communities, and even on relationships. Racism has cost both those of color and Whites their health, families, friends, livelihoods, and even their lives. Racism has many people greatly. People of color and people who are White experience the costs of racism each and every day. Racism is felt and experienced more by people of color. According to Hays and Erford (2014), the â€Å"imprint of racism is historically rooted in the social structure-laws, traditions, and customs of the United States and lives within its social systems-occupations, education, and justice system† (p. 89). Look at what is taking place at the University of Missouri. Students of color are fearing for their lives because of hateful and racist remarks and actions that have been said and taken against them. Hays and Erfor d (2014) stated that â€Å"racism has associated cognitive, affective, interpersonal, and physical costs for people of color† (p. 89). Cognitive costs of racism include the â€Å"mental energy and psychological process used to evaluate racism in a person’s life, negative thinking, and internalized racism† (p. 91). It also has affective, or emotional costs. Affective costs are a result of the cognitive costs of racism which include frustration, irritation, and hostility (Hays Erford, 2014, p. 91). Many people ofShow MoreRelatedRacism And Its Impact On Society848 Words   |  4 PagesRacism is simply any form of discrimination towards skin color and a different race than your own. It can involve categorizing, insulting, abusing, and isolation. It is differing treatment of another human, but sadly it almost seems like it’s apart of human nature now. Racism can also be considered nature of competitiveness. 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Are GMOs Safe - Free Essay Example

Sample details Pages: 3 Words: 803 Downloads: 2 Date added: 2019/02/14 Category Health Essay Level High school Tags: GMO Essay Did you like this example? Are GMOs a threat, or are they safe to consume? In todays technological world, the access to information is as easy as peeling a banana, a product that can be consumed with GMOs or 100% organic. With the waves and spread of sensationalist news on the internet, many people consume information at such a rate that their attention span frequently fails to drive them into researching the information. As survivalists’ beings, we tend to look out for what we eat and what might cause us to develop health complications along our lifespan, which is why the GMO scare is somewhat justified. Don’t waste time! Our writers will create an original "Are GMOs Safe?" essay for you Create order However, we as humans are a product of GMOs, as we mix with other races and get vaccinated, we are modifying our genetics at a faster rate than we would have through an organic process. So, are GMO’s safe? My extensive and unbiased investigation agrees that it is safe. Many people do not even know what GMO stands for, it is an abbreviation of Genetically Modified Organism, in other words any living being that has been tempered with through genetical engineering. The benefits of GMO’s go beyond economically, many people consider these products as a creation of evil corporations that only seek to fill their pockets at the expense of the people who cannot afford organic food. Though it is true that these products are created as a new source of income for corporations, GMO’s are helping the development of farms and livestock in places where it previously was impossible. For example, tomatoes do not favor cold or damped terrain, but through the modification of its genetic code with some specific gens from salmon it is now possible for tomatoes to adapt to this terrain. Consuming this product, will not affect humans in any way, the nutritional value stays the same and the modification will not make humans mutate. When considering the amount of research required to have an unbiased opinion on the subject, it is guaranteed to have read publications against GMO’s. As previously mentioned, today, information is constant, and it exceeds our attention and retention span. Many journalists and â€Å"researchers† take advantage of this by creating sensationalist headlines. Many, if not all, of the articles I read had scary headlines that are memo rable. Even if the information read on these articles were favorable for GMO’s, the headline and first paragraph are enough to scare people away. The truth on these articles is that are opinion based without any research to back up their claim. It would be no surprise that the people writing these articles wear tin foiled hats and are worried that the government is putting something in the water to make the frogs gay. It is almost impossible to find an article that does not cross the conspiracy theory line, their sole base to argue against these products is fear and that is how they have been able to spread so far and wide in a technological society. The modification of organisms through genetic manipulation is not something new, corn is believed to be the first of these products. A scientific achievement that makes the world a more habitable place, providing food to people who previously had a scarce access to it and have an all year-round production. With the large quantities that are produced through the genetic modification has allow the costs to be reduced and for food to be more accessible. While organic food still holds the edge when it comes to flavor, the constant investigations and advancement on the field of GMO’s can guarantee that it is only a matter of time before both are equal in every aspect except production. Organic food, though more natural, would not produce the number of crops required to feed the population of a large city, it depends on constant attention and investment for it to be viable in large quantities, hence the high costs. GMO’s are not only a solution for world hunger, it is also an economic solution for many people who in the past had to choose between quantities and quality of nutritional value in food. It provides access to food to people who were unable to grow crops due to the terrain and it allows livestock to adapt. The research shows that most articles and investigations done against GMO’s are done by people with no qualifications on the field and it is borderline conspiracy theory, its fuel is fear. While it is a positive thing to have a level of skepticism, it is also good to accompany it with research on the subject, through a diverse opinion pool. When in doubt about the needs of GMO’s, remember that more people are having access to quality food than they did or would ever had through the organic crops.