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    HP-CSO Case Study

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    vijaygopal210
    1) Manuel Diaz is reviewing an audit of HP's customer management approach to identify opportunities for growth and cost reduction, but another major change could strain the sales organization. 2) The audit found opportunities in repurchasing existing customers, expanding sales to customers, and innovating for customers, but the sales force needs to change to capture these opportunities. 3) Diaz must determine if now is the time for HP-CSO to make another round of major changes to its sales force structure and customer management approach.

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    HP-CSO Case Study

    Uploaded by

    vijaygopal210
    3K views14 pages
    1) Manuel Diaz is reviewing an audit of HP's customer management approach to identify opportunities for growth and cost reduction, but another major change could strain the sales organization. 2) The audit found opportunities in repurchasing existing customers, expanding sales to customers, and innovating for customers, but the sales force needs to change to capture these opportunities. 3) Diaz must determine if now is the time for HP-CSO to make another round of major changes to its sales force structure and customer management approach.

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    1) Manuel Diaz is reviewing an audit of HP's customer management approach to identify opportunities for growth and cost reduction, but another major change could strain the sales organization. 2) The audit found opportunities in repurchasing existing customers, expanding sales to customers, and innovating for customers, but the sales force needs to change to capture these opportunities. 3) Diaz must determine if now is the time for HP-CSO to make another round of major changes to its sales force structure and customer management approach.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views14 pages

    HP-CSO Case Study

    Uploaded by

    vijaygopal210
    1) Manuel Diaz is reviewing an audit of HP's customer management approach to identify opportunities for growth and cost reduction, but another major change could strain the sales organization. 2) The audit found opportunities in repurchasing existing customers, expanding sales to customers, and innovating for customers, but the sales force needs to change to capture these opportunities. 3) Diaz must determine if now is the time for HP-CSO to make another round of major changes to its sales force structure and customer management approach.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    HP-CSO Case Study

    Group :
    Alok Saha (XPGDM 06)
    Vijay Gopal(XPGDM 53)
    AbhaySharma( XPGDM 01)
    Pradyut Roy (XPGDM 33)
    Case Overview
    • In late 1996, Manuel Diaz, head of Worldwide Sales
    for Hewlett-Packard's (HP) Computer Systems
    Organization (CSO), is reviewing the results of an
    audit of HP's enterprise customer management
    approach with the objective of identifying market and
    organizational opportunities that might provide HP
    the next wave of growth while further reducing sales
    and support costs. HP's current customer
    management approach, although successful, had
    involved structural changes that had forced a deep-
    rooted overhaul of HP's traditional regional sales
    approach. The new recommendations would
    necessitate another round of drastic changes in the
    way HP manages relationships with its large
    enterprise customers. Diaz does not want to put the
    sales organization through another round of changes
    Is this the time for HP-CSO to make
    more changes?

    • Considering the opportunities which lay in the


    area of repurchase, expansion & innovation
    segments it is critical for HP-CSO to make the
    right changes in the organization of its sales force
    to capture these three segments. Another
    problem was the customers desire to consolidate
    its supplier base. Moreover, the sales generated
    in these segments was initiated from customers.
    HP being a preferred vendor & strong in
    repurchase, it was difficult for it to enter the
    innovative projects segment where customers
    doubted its ability to deliver the goods.
    • I light of the above facts, it has become apparent
    Why does HP treat its
    salesforc as a cost center
    • The structure of HP was grouped into three main
    divisions i.emeasurement systems, computer
    products & computer systems. Each had its own
    sales force & others support departments.
    Manufacturing possessed significant possessed
    significant wordwide product line charters & were
    measured as profit centers. The divisions
    captured profits through transfer price
    mechanisms when they shipped products to HPs
    sales regions. Transfer between divisions & sales
    regions were mostly made at market price less
    allowances for subsequent manufacturing and/or
    marketing cost.
    What are the implications
    of such a sales structure?

    • Major implications of this structure are below


    metioned
    • Sales force can concentrate on the achieving
    sales target without having to worry about
    making profits for itself & spend time in non core
    activities.
    • The sales force does not need to employ much
    additional non sales staff to manage its overall
    functions. Appointments can made on the basis of
    minimum requirement needed
    • Cost cutting measures can put pressure on total
    What is HP-CSO’s approach to building
    relationships with enterprise customers &
    what are its strength & weaknesses ?
    • HP-CSO reorganized its sales approach by way of providing
    greater autonomy to its divisions. CSO henceforth could
    draw on the HPs resources while operating in a more
    entrepreneurial fashion. Freed from the constrained of a
    drawn our approval process, CSO began to race the market
    with new computers built around RICS chips. By 1994, HPs
    business was growing at 40% annually. To capitalize on the
    new market position, sales force was redesigned. Red sales
    force team was created which constituted of sales reps
    specializing in industries HP had decided to target & to one
    of the 3 business units HP decided to target, one focused on
    financial service such as banking & supply chain
    companies in retail, oil & gas. The second focused on the
    federal government & discrete manufacturing industries
    such as aerospace & the third focused on
    Cont…
    Strengths of the approach
    • This domain specific approach would
    enabled HP to focus on big ticket customer
    more seriously & attentively.
    • Generate more sales because of over
    specialization of the sales force.
    • Sales force would be able to nurture the
    relationships developed over time with
    enterprise customers.
    • In depth knowledge about this big ticket
    Contnd…
    Weakness of the approach
    • As we saw in the case, sales force
    was resistant to change & did not
    wanted to lose power over their
    regional fiefdoms & lose their smaller
    customers. They also resented being
    relegated to the channel partners or
    telephone reps.
    • To transform salesperson from order
    Do you agree with the findings of the
    two audits?

    We agree with the finding of the first audit.


    However, the second audit does not give
    us a lot confidence in the true depth of
    findings due the methodology adopted.
    The customer selected was largest, HP had
    good relationship with the client, industry
    of the client was HPs strong point & only
    one region was chosen for the study. All
    these factors tells us that a lot areas which
    were perfect with this customer & may not
    be perfect with others with have been
    What about the
    consultants
    • The recommendations of the consultant are not
    properly structured. This anomaly might also be
    due to the way case is written & not the complete
    report of the consultant.
    • The recommendations however provide deep
    insights about the strong & weak links in the
    sales strategy of HP-CSO.
    • The section on repurchase, replacement &
    expansion projects provide great insight on the
    weakness of HPs sales force but does not provide
    methods of how to overcome those weaknesses.
    The same goes for section on innovative projects
    How is the new approach
    to managing enterprise
    • The new approach to managing enterprise
    customers may not bear fruit as long as
    the sales force does not get proper
    training to come up with upcoming
    change.
    • The approach of entering the bottom &
    slowly making way up the ladder may be
    time consuming & entail climbing a lot
    barriers put up by competitors. The time
    lost to climb barriers may put HP-CSO way
    behind the competition & it may never
    Are you comfortable with
    the conclusions of the
    We are not comfortable with the
    conclusions of the second audit. The
    conclusions are devoid of any future
    projections on numbers, structured
    action plan is missing. Also the
    conclusions are weak & are not in
    line with HP-CSO long term strategy.
    Recommendations to
    Diaz
    • Need to develop competence in
    midstream & especially upstream
    segment of the market to capture
    the true potential market share for
    HP-CSO.
    • Develop as value proposition to
    target the upstream market.
    • Increase conversion rate of
    downstream & midstream segment.
    Thank You

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