PEST analysis is a traditional way of considering the external environment (Adcock 2000). It is usually conducted to obtain understanding of the macro environment affecting the business or sector being studied. The Porter¡¦s analysis seeks to summaries the competition forces at work in a particular sector (www.defence.gov.au). Porter does not see these external factors as working alone, they act in relationship to each other, and can also be influenced by the organisation which the effect, in understanding them the organisation is in the best position to influence them (Thompson, 1998). If we apply this to Hewlett Packard then we will see a very interesting company that has some strengths as well as weaknesses.

Key points that HP needs to focus on to maintain profitability and customer base worldwide are (Rahul, 1999):

Growth trends are moving away from HP strongholds, such as black-and-white laser printers, where HP claims 70% of the market. Instead, consumers and businesses are buying more color printers and all-in-one devices that can print, fax, scan, and copy -- markets where HP faces tougher competition from Canon, Lexmark, and Xerox (Elgin, 2001).

Some topics in this essay:
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