Hewlett Packard

.. ailable for all Delta Air Lines employees at a substantial discount through PeoplePC. – 5 – The Wired Workforce program was announced February 4 in a joint presentation with PeoplePC. The San Francisco based company will be responsible for order fulfillment and technical support for the program. Over the next few months, Delta Technology and PeoplePC will work closely to test all aspects of the program, including secure access to the airline’s intranet.

HP will provide multiple configurations from its HP Pavilion desktop line, the No. 1 selling retail PC. HP is moving rapidly forward with implementation of their ‘Wired Workforce’ program and look forward to the advantages their people will gain. In 1997, the HP established a dedicated task force to address the issues raised by the introduction of a European single currency (the Euro) for early performance as of January 1, 1999 and during the transition period through January 1, 2002. HPs primary focus has been on the changes needed to deal with a mix of Euro and local denomination transactions from the first day of changeover – January 1, 1999.

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Since the beginning of the transition period, product prices in local currencies are being converted to Euros as required. At an appropriate point during the transition period, product prices in participating – 6 – countries will be established and stored in Euros, and converted to local denominations. System changes were implemented to give multi-currency capability to the few internal applications that did not have it yet, or to ensure that external partners facing systems processing euro conversions be compliant with the European council regulations. ( Advertising Age ) The HP has developed plans to support display and printing of the Euro character by impacted products. Most products are currently able to do these functions while plans are still in process for a few remaining products. HP does not presently expect that introduction and use of the Euro will materially affect the Company’s foreign exchange and escaping activities or the Company’s use of derivative instruments.

HP management does not expect that the introduction of the Euro will result in any material increase in costs to the Company and all costs associated with the introduction of the Euro will be expensed to operations as incurred. While the HP will continue to evaluate the impact of the Euro introduction over time, based on currently available information, management does not believe that the introduction of the Euro currency will have a material adverse impact on the HP’s financial condition or overall trends in results of operations. – 7 – Hewlett Packards Response to a Globalizing Political Environment Economic, political and other risks associated with international sales and operations, particularly in Korea and Japan, could negatively affect HP sales. They sell products worldwide, their business is subject to risks associated with doing business internationally. HPs net revenue originating outside the United States, as a percentage of our total net revenue, was 54.4% in fiscal year 1998 and 54.9% for the nine months ended July 31, 1999.

They predict that revenue from international operations will continue to represent a large portion of our total revenue. In addition, many of their manufacturing facilities and suppliers are located outside the United States. HP does a substantial portion of their business in Korea and Japan, which have been subject to increased economic instability in recent years. Their business has declined in 1998 when Korea and Japan experienced economic difficulties. The return of weakness in these economies or weakness in other international economies could and may have a significant negative effect on HPs future operating results. HP is dealing with various rules and regulations, in particular is its compliance with the Food and Drug Administration regarding regulations on a wide variety of product activities from design and development to labeling, manufacturing, promotion, sales and distribution.

– 8 – The medical device products produced by Hips healthcare solutions business are subject to those standards given by the United States Food and Drug Administration (FDA) and similar international agencies. HP has received a warning letter from the FDA in 1996 alleging non-compliance with the FDA’s quality system regulations at one of our facilities. The FDA’s quality systems regulation includes elaborate design, testing, control, documentation and other quality assurance requirements. HP had to apply considerable resources to address the FDA’s concerns. HP has resolved the issues identified in the FDA’s letter and the FDA is satisfied with our assessment If HP fails to keep up acceptable compliance with the FDA’s quality system and other regulations, HP will be forced to recall products and cease their manufacture and distribution.

( Hoovers.com ) The Global Industry The worldwide personal computer industry grew 21 percent last year, led by strong demand in the United States. Increasing affordability of PCs and the growing demand to get ” online “, the percentage of U.S. homes with PCs advanced from 38.5% in 1995 to 52.7% in 1999. As a computer Industry as a – 9 – whole had to compete for DRAM in late 1999 because of the Taiwan earthquake. Prices doubled 100% in August and then again in September. This suspended the demand in PCs during the holiday season.

In entry-level computer HP was again behind IBM with 12% of market share compared to IBMs 21%. HP has gained market share in the midrange PCs with 21% compared to IBMs 23%. ( Standard & Poors ) HP grew in market share during the end of 1999 from 6.2% to 8.4%. HPs growth rate worldwide is 39.6%, which is the second fastest growth rate behind Dell computer. In revenues HP is 2nd behind IBM with $47 billion and 2nd again in net income behind IBM with $2.9 billion.

Under operating profit margins HP ranked 6th with 8.16%and with return in capital of 15.51% also 6th in the industry. ( Moodys Industry Review ) One thing that HP does lack in is in computer sales in other countries outside of the U.S., like Canada where they are not even ranked in the top 5. Globally HP leads the printer market with their HP inkjet printers and is gaining market share in the PCs. HP is growing rapidly into the worldwide market and is growing at a faster rate than before because of the global access offered to business and customers over the Internet. – 10 – Bibliography Global Computer Industry, New York Times, New York; Jan 29, 1999; Late Edition; pg.C.18 Hoovers Online Business Network; computer industry analysis; hoovers.com Tobi Elkin; Advertising Age, Chicago; Jan 31, 2000; Vol. 71, Iss.

5; Midwest region edition; pg. 32, 3 pgs Laabs, Jennifer J. (1993), ” Hewlett Packards core values drive HR strategy, “Personal Journal, 72, 9 (February) 38-48 ” History, ” (2000), http://www.hp.com (accessed 2-9-00) “Hewlett Packard Company ” (2000), http://www.firstsearch.oclc.org (accessed 2-9-2000) Korzenowski, Paul (1999), ” Hewlett Packard Makeover Starts Turning Heads, ” InformationWeek, 761, 9 (February) 189-192 Moodys Industry review (1999), ” Comparative Rankings. ” ” Computer Hardware, ” (1999), Standards and Poors Lazich S. Robert; Market Share Reporter, (1999) pg 190-192 – 11 -.