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The Market Research & Information Center is Hewlett-Packard's central market research function. It operates as a shared resource of all divisions worldwide. Not every HP entity that needs market research can justify establishing its own full-time market research activity. By sharing ownership of the activity, all HP divisions get a higher level of research competence and more efficient research operations. The central research function brings another advantage to the decision-making process that may be even more important. By being a partner with--but not completely owned by--any given divisional organization, it can provide a perspective and level of objectivity that is not otherwise available inside the division.
To understand how HP's central market research function works requires an understanding of the company and its situation. Hewlett-Packard is a $14 billion company that makes products for technical and business applications. Its core competence is applying technology creatively and productively to technical and business problems. Its major businesses are computer and instrument products for business, engineering, science, and medicine. HP makes printers, calculators, workstations, mini-computers, and engineering test equipment such as oscilloscopes, logic analyzers, and board test systems. It also makes medical imaging and monitoring equipment for doctors and hospitals, and chemical analysis and test equipment for the drug and chemical industries.
THE DECISION ENVIRONMENT
The decision environment is characterized by rapid, complex change. The major force driving change in the industry is technology. Improvements in technology have reduced the cost-per-electronic-function between 25% ad 50% per year for the last 20 years or more. This lower cost of performance has expanded the markets that can be addressed.
As increases in power have become available, the benefits have been translated into products that are cheaper, smaller, and easier to use, which in turn has caused markets to burgeon. As a result, industry participants have a heavy emphasis on new product development. In HP's case, 70% of current sales come from products that did not exist five years ago.
The change in products is also changing the way in which companies compete in the marketplace. Basic user protocols have been standardized. Off-the-shelf hardware technology and pre-packaged software enable startups to enter the market without a big R&D investment. Closed proprietary systems are under attack as manufacturers conform to industry...