68.1% of net revenues, up from 66% in 1997. A.G. Edwards just released a report forecasting that HP뭩 EPS should increase 18% in the year 2000, and stock target price should be in the range of $130/share. HP has not ignored its setback in 1998 financials, and has taken a proactive approach. Examples of this proactive approach are the new corporate focus on providing E-services, and server/workstation sales, and the corporate realignment. These steps to counteract the recent setback are positive, and will help prepare HP for the new millenium. Section 7 Internal Analysis Strengths ?Diversification ?Brand awareness ?R & D ?new product development/improvement ?Alliances ?Creation of Agilent Tech ?International Sales Diversification: Nearly 85% of HP뭩 revenue comes from its computer and related products/services. This leaves almost 15% of revenue to come from Agilent, where sales come from testing and measurement equipment and medical equipment. Brand awareness: HP, established in 1966, has a long-standing reputation and good 밷rand awareness?in the computer industry. R & D: HP spent $3.4 billion in R&D during 1998 and placed on the market 24 new products company wide. HP is positioning itself well in the Internet market ?either by providing E-services or Internet sales of products. Alliances: AT&T announced an alliance with HP to provide Internet service to small/medium businesses using the new HP Brio line targeted at this segment. Another recently announced alliance is with Viador to introduce the industry뭩 first on-line implementation service to enable e-services. Agilent Technologies: Creation of this separate company provides two distinct industries that HP is involved in. These industries focus on computer and related products/services in HP, and scientific equipment and services in Agilent. This divergence gives each company a distinct focus, where previously each SBU stood alone within HP. International Sa...
