Ex-Board Member Says HP Is Committing 'Corporate Suicide' 394
theodp writes "If Apple's looking for a seamless transition, advises the NYT's James B. Stewart, it definitely shouldn't look to Hewlett Packard. In the year after HP CEO Mark Hurd was told to hit-the-road-Jack, HP — led by new CEO Leo Apotheker — has embarked on a stunning shift in strategy that has left many baffled and resulted in HP's fall from Wall Street grace (its stock declined 49%). The apparent new focus on going head-to-head with SAP (Apotheker's former employer) and Oracle (Hurd's new employer) in enterprise software while ignoring the company's traditional strengths, said a software exec, is 'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes.' Former HP Director Tom Perkins said, 'I didn't know there was such a thing as corporate suicide, but now we know that there is.'"
Re:Deja vu (Score:3, Informative)
Yeah, they should have stayed with making rubber boots. Heck, they should have stayed with making Paper.
Re:Ford Trimotor (Score:2, Informative)
You mean you couldn't give a shit. Your homework is to watch:
David Mitchell's soapbox (series 2 episode 2) [channelflip.com]
Re:Ford DID make airplanes (Score:5, Informative)
You realize that Ford DID make airplanes a long time ago. Not only that but they were GOOD at it.
Actually all Ford did was buy up a company that had shamelessly copied much of the technology behind what became the Ford Trimotor from Junkers Flugzeugbau AG in Germany (the same kind of intellectual property borrowing the US is now complaining that China does). One could almost say the Ford Trimotor was a Fokker F.VII made with Junkers' methods. In fact the Fokker F.VII and the Ford Trimotor look so much alike people often confuse photographs of the two even though the two aircraft used completely different construction methods. Mind you the Ford was easily the superior design... thanks in no small measure to Prof. Junkers. Ford's significant contribution was not their designs, it was the way they applied Ford's assembly line techniques to aircraft production making their prices highly competitive which was one of the reasons why Junkers never managed to get much of a foothold on the US market. Ford later contributed hugely to the 18.000 plus B.24 bombers made during the war.
Re:Deja vu (Score:2, Informative)
It's easy to increase short term profits after slashing R&D.
Re:Gave up too quickly (Score:4, Informative)
Maybe I'm wrong and all other industries suffer from the same level of management problems - it's just that the technology industry is the one I'm most familiar with.
You are. This sort of shortsighted next-quarter-stock-prices chasing happens in all industry. It's a fairly obvious flaw of how a stock market distorts the free market....stockholders are the bosses, and at some point it because easier to make money by bumping up the stock price for two months and selling their stock to new unsuspecting people, than to actually get paid any dividends from the profits of the company.
In other words, the American economy operates by trading intangible assets from one person to another and hoping that they make worse guesses than you in selecting what and when to buy, instead of actually paying people to take $X worth of goods, put in $Y worth of labor, and selling to customers for $X+$Y+profit.
Re:Gave up too quickly (Score:5, Informative)
That's a market assumption for regular economics, You're basically saying that the customer can always enforce their determination. Macro-economics is, in some small part, just about what happens when they customer decision causes them to lose power to further enforce the market.
Let's take a largeish example. Suppose a lot of customers think it's worth $26.37 for a copy of the 'Professor Y and the Y-men fight Gyroscopo' DVD. The company bet that it would sell 40 million copies in the first pressing, and it does (Whooo!!!) Year after year, the customers think, in large enough numbers, that the series is worth purchasing. Sales stay good. But, an increasing number of those customers are stretching their credit cards to the max, and getting into financial modes where they really need to go back and put more money aside for a rainy day, pay the car insurance, put aside more for little Billy's college, and so on. Eventually, a bunch of customers simply don't have the extra in their entertainment budget to buy Y Men 27 by the 40 millions. These people may still feel 26 dollars is a fair price, but they aren't customers any more, because they just don't have 26 dollars in the entertainment part of their budget. To make them customers again, the DVD maker needs to charge only $17.28, at which point the customers may be thinking, "This is a real bargain, way better than fair. With food prices skyrocketing and gas totally beyond my social class, this is a real steal!!", but it's still what the company has to charge if they want to get 40 million sales again. The customer can think that the high food and gasoline prices are what's unfair, but they are practical necessities. The slack is in things that are optional. The customer has an opinion about what's fair, but it may not match the market forces - when it doesn't, the market forces compel the customer's vote even by, if necessary, stopping him from being a customer at all.
Apple could be overcharging, if the people who think the Apple premium is fair find themselves faced with other financial choices that take them out of potential customer status, and the people who buy the cheaper options increasingly attribute still having discretionary cash available to having made 'smarter' choices in the past.