Why did HP desire UPS as a partner?

Answer

Why did HP desire UPS as a partner?

HP needed a partner because it had just completed a successful merger through acquisition of its rival, Compaq, and so it desired a partner, especially in UPS to assist it in the integration process after the merger, since UPS was so knowledgeable about the companies that HP had merged with, with regard to their preexisting processes. Compaq had been UPS customer. UPS was desired since it was seen as a strategic partner since, due to its would class reputation, it would be the most suitable for HP when it comes to outsourcing of its non-core processes. UPS had the capability and the reputation to carry out HP’s noncore processes effectively.

 What advantages could UPS bring to HP?

The fist advantage that UPS would bring to HP is that it would carry out the noncore processes on behalf of HP, thereby enabling HP to focus on its key business and what it was good at, that is delivering technological innovations.UPS would also enable HP enhance and build on its operational efficiencies since transportation logistics would be carried out by UPS. Operational excellence was also promoted since HP could take advantage of UPS celebrated culture of innovation.

What were the unique advantages of each company, and how could they be brought together to benefit both?

Each company had excelled in its niche and so their partnering was of mutual benefit. For HP, it was well know to have an excellent culture of technological innovation and cooperation and so if UPS had technological problems, HP provided ready solutions to fix them. On the other hand, UPS is internationally known for its focus on high performance and operational excellence. This would be important for HP’s competitiveness since its customers would still get excellent services because of UPS’s expertise in transportation and freight logistics. HP’s customer could thus be reached efficiently regardless of which part of the world they were located. UPS thus would be of great benefit to HP is as far as synchronization of HP’s global business was concerned.

How is customer value co-created through this partnership?

The partnering of these two companies would greatly enhance their economies of scale and thereby increase their ability to deliver customized solutions as per their respective customer’s needs, hence crating business value. Partnering together would also enable the two companies concentrate on what each is good at, their core business as opposed to noncore processes, thereby effectively responding to the ever changing customer needs. Thus outsourcing of transportation and logistics to UPS would increase their concentration on product innovation hence customers would get better quality even on the delivery process.

Briefly describe the partnership structure, highlighting the points that were well structured, and those that needed to evolve as the partnership matured

The companies came up with a performance metric that was to be used to measure each partner’s financial and service oriented achievement. They thus developed a performance oriented metric that they used for evaluation. For the three years that the contact lased, HP aimed at reducing their financial spending by 12% , while UPS aimed at increasing the volume of services rendered. Both partners designed a unit cost system that was used in measuring account fluctuations and shifts over time. For service target, they came up with service leverage agreement (SLAs), that was mostly useful in coordinating activities between the firms.

Assess the three main objectives, commenting on how they should be implemented and providing advice on partnering strategy.

The three main objectives that UPS had included having flexible IT infrastructure by pursuing business (B2B) to business connectivity. UPS intended to derive economies of scale since this was key in creating value to their customers. To implement this strategy, UPS secure a partnership with a high tech firm such as HP since their technological expertise would help them develop the IT system they need.

The second objective was coordinating the firm’s internal capabilities. This implied a need for integrating a range of services that are delivered to customers without risking them being persuaded to seek outsourced or external services. To achieve ore internally coordinated processes among its various sub units, UPS can achieve this through restricting so reduce the number of subunits in the firm for easier coordination.

The third objective was recognizing the importance of strategic information sharing, since this was also vital for the firm’s effectiveness in networking with global partners and customers. For effective information sharing especially with its customers, UPS would need to win the trust of its customers this would require to them to look for a partner with both knowledge and reputation to build customer trust.

When it comes to partnering, it is wise to both set up the structure and define the terms of the partnership when it comes to evaluating both financial and service process metrics. The partnership should be of great mutual benefit for the business and actually solve a firm’s business need. It is therefore wise to look for a partnership that has the desirable knowledge, efficiency and reputation.