HP's New PC Chief Sees Opportunities

Todd Bradley has the daunting task of competing against Dell and the new Lenovo in the cutthroat PC market.
Hewlett-Packard's new executive team is beginning to make its imprint as it confronts the many challenges facing the computer and printer company. The toughest challenge may be leading HP's PC unit, which has the daunting task of competing against Dell and the new Lenovo Group Ltd. in the cutthroat PC market.

"We have a challenge and an opportunity, and now we need to execute," says Todd Bradley, who was named executive VP of HP's Personal Systems Group last month. "We already have a very strong identity with the HP Pavilion and Compaq Presario brand names, and we span the gamut in all segments from consumers to small and medium businesses to the enterprise."

Bradley was the second of three significant executive hirings at HP that took place after former president and chief executive Carly Fiorina left in February. First, Mark Hurd was hired to replace Fiorina in March, followed by the addition of Bradley in June to run HP's PC business. Most recently, former Dell CIO Randy Mott was named HP's CIO earlier this month.

Bradley had resigned in January as president and chief executive of handheld computer maker palmOne Inc. and had previously spent three years at Gateway Inc. The hiring of Bradley was among the initial major moves made by Hurd, who also reversed one of the last moves made by Fiorina--combining the Personal Systems Group with the company's Imaging and Printing Group in January. Upon hiring Bradley, Hurd spun off the PC unit into a separate business unit.

On Tuesday, when HP said it will reduce its workforce by 14,500, the only business-unit realignment announced was that the Customer Solutions Group, which was responsible for sales to businesses of all sizes, would be disbanded and its salespeople merged directly into HP's three major product groups: Personal Systems Group, Technology Solutions Group, and Imaging and Printing Group.

The move, Hurd said Tuesday, will provide each of the business groups with a tighter link to its customers, greater insight into operations, and greater control over the individual profit and loss centers, including operational elements such as sales coverage models, demand generation, and field selling costs.

"I am very confident as we engage and execute this new go-to-market strategy, we'll get to market faster, make decisions faster, and our customers will win faster," Bradley says. "This move will provide both increased focus and increased accountability."

According to research firm IDC, HP trailed only Dell in 2004 in worldwide PC shipments. Dell last year controlled nearly 17% of the market, followed by HP with 16%, and IBM with about 6%. In the United States, however, Dell has a greater lead, with 33% of the market, followed by HP with 20%, and Gateway and IBM with 5% each.

Some analysts have said HP should consider spinning out or selling its PC business, similar to the decision made earlier this year by IBM to sell its PC business to Lenovo.

"Wall Street analysts are Wall Street analysts," Bradley says. "We believe the product and business mix we have today, as well as the channels we use and segments we address, are what we need to optimize. We're not going to spend a lot of time speculating on what some analyst thinks we should or shouldn't do."

HP's PC business has a multichannel sales strategy that will be more tightly tuned in the coming months, he says. HP sells through partners, its direct sales force, and through its Web site. The Web site sales channel is expected to see some changes in the coming months with the arrival of Mott from Dell.

"People are focusing on the headline of 14,000 jobs lost," Bradley says. "But the real message is around the focus and accountability we're bringing to our market business units. We're bringing new clarity to the company."

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