This is a good case study for a number of strategic management concepts:
i) planned and emergent strategies: a few months ago HP had announced that they will concentrate on WebOS which has not produced the expected results; HP is quick in changing strategy, even if it must be very financially painful for them.
ii) exit from its cash-cow business: selling pc BU which is considered the biggest in the world. Interpreting the justification from a strategic management perspective, it seems that the software segment has larger profit margins. Interesting to note that this refocusing is a combined with the acquisition of Autonomy.
iii) the refocusing of the business is based on the expertise of its new CEO who has joined from SAP.
The article draws the parallel between HP and IBM a decate ago, but there is a fundamental difference; IBM was not No. 1 when decided to diversify. Also, HP's history of mergers has shown that it is not the most adaptable and flexible company.
Hewlett Packard to exit computing and buy Autonomy
Hewlett Packard has confirmed plans to stop making PCs, tablets and phones, in order to refocus on software.
It has also emerged that the US company has agreed to buy UK software firm Autonomy for £7.1bn ($11.7bn).
Read the whole article at: http://www.bbc.co.uk/news/business-14584428