HP's New CEO, Mark Hurd: The New Imperatives
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Code :LDS0010
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Region : USA |
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Introduction: By 2004, Hewlett-Packard Company (HP), whose hi-tech products1 range from digital cameras worth $100 to multi million dollar computer solutions, earned a profit of $3.49 billion on annual revenue of $79.9 billion with employee strength of 151,000.2 In February 2005, the board of HP asked its CEO and President, Carleton (Carly) S. Fiorina to resign. It was reported that one of the major reasons behind this dramatic move had been differences between the board and Carly Fiorina (Fiorina) on the implementation of the strategy of delivering all the different products and services from under one roof. During the 21 quarters (5 years and 4months)with Fiorina as theCEO,HPfailed tomeet its quarterly profit targets eight times. In March 2005, shares of HP traded at around $21 – a far cry from $70 (in 2000). On March 29th 2005, HP announced appointment ofMark Hurd (Hurd) as its new CEO. Hurd had been the CEO of NCR,3 which was into different product lines likemanufacturing ofATMmachines, business data storage systems and providing software solutions.During Hurd’s two-year tenure as theCEOatNCR(fromMarch 14th 2003 toMarch 31st 2005), the company witnessed profits from the losses it incurred to the tune of $220million in 2002. NCR’s share value increased by 332%to $39. In 2004, its profits jumped by 391%to $285million, and sales rose by 7%to $6 billion.4 In eight consecutive quarters at NCR, Hurd reported profits above the expectations of the financialmarkets.Since 2003,NCRhas also reduced costs to an extent of $200million.5 At HP, Hurd is expected to bring about a similar kind of change by focussing on operational strategies like cost cutting, downsizing and increasing sales, which his predecessor Fiorina had failed to address. |
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