How IT companies compete. (strategy of information technology firm Hewlett-Packard Canada)

INFORMATION TECHNOLOGY COMPANIES ARE USING INTERNAL AND EXTERNAL STRATEGIES TO BOOST THEIR COMPETITIVENES

Information technology (IT) companies worldwide understand that their share of any product category or service might evaporate overnight. They accept that today's array of products and services could become obsolete and therefore unprofitable tomorrow. Product life cycles for everything from CPUs to storage capacity are measured in months, not years. To compete effectively, next year's solutions must be on the drawing board today.

Another cold reality: The products and services that drive the information highway no longer generate the same returns they did just a few years ago. Profit margins seem to be shrinking almost as fast as the products themselves evolve, and to compete effectively, IT companies must merchandise to global markets. These new business imperatives have led to a rethinking of how IT companies compete, especially in the Canadian context.

Hewlett-Packard Canada has developed a strategic outlook that maximizes its competitive advantage in the face of these new business imperatives. The first element of the company's strategy, embodied in its Centres of Excellence Program, addresses the need to compete within the organization itself for the global production mandates that dictate the company's long-term success. The second element focuses on enhancing the shift towards "co-opetition," a term coined by Ray Noorda, Chief Executive Officer, Novell Inc. Co-opetition is characterized by the constantly changing alliances and partnerships within the IT sector whereby companies challenge each other for business opportunities while at the same time collaborating on the development of specific projects, products and services.

CENTRES OF EXCELLENCE PROGRAM

Given that the Canadian market accounts for less than 5 per cent of its revenue, Hewlett-Packard Canada, as is the case …