Financial Management

19 May No Comments

Running Head: BUSINESS

Financial Management

From the case study and e-Activity, determine whether or not you agree with Meg Whitman’s approach for Hewlett-Packard to spend more funds on research and development, rather than on continued acquisitions. Provide a rationale for your response.
From the scenario, rate the recommendations that Tammy Partridge made to expand product lines at the current production facility and to take the company public in order to provide additional capital for expansion of the business (1 meaning that you highly disagree with her recommendations; 5 meaning that you highly agree with her recommendations). Determine whether or not the recommended approaches seem to be viable. Provide a rationale for your response.

Answer: 1

On the basis of the case study, I am not agreed with the approach of Meg Whitman for Hewlett-Packard to spend more funds on R&D rather than on continued acquisitions. There are a lot of reasons behind it. For instance, the R&D approach would increase the cost of the company and there would be more chances of failure. The company need more funds as well as employees that would decrease the revenues and profitability of the company. In contrast, acquisitions are profitable for the company. Moreover, acquisition is the one of the most important means of growth for the business and also a faster, less expensive, and a less risky approach for the businesses. In this way, Hewlett-Packard should focus on acquisition approach rather than R&D approach for the growth of the business.

Answer: 2

I will give rate 5 to the recommendations that Tammy Partridge made to enlarge product lines at the current production facility and to obtain the company public to provide additional capital for expansion of the business. The main reason behind it is that, the 3 new product lines the company is talking in order to expand into are for airliner that was initially from England & France. Moreover, the market of the company was so very much in the United States. Furthermore, Tammy saw sales figures of the company and analysis that only 10% of the sales of the company come from overseas. Therefore it would be an unnecessary expense for the company.

References

Beer, M. (2009). High Commitment High Performance: How to Build A Resilient Organization for Sustained Advantage. USA: John Wiley & Sons.




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