PC powerhouse Hewlett-Packard (NYSE: HPQ ) is well on the road to recovery under CEO Meg Whitman.
As we saw with Hewlett-Packard's surprisingly upbeat earnings release last month, Whitman's 5-year turnaround
plan has HP investors looking to brighter days ahead. All told, Hewlett-Packard's shares have risen some 20% so far in 2014, absolutely trouncing ever major domestic index.
There's just one problem with this line of thinking: For all the wins that Whitman has notched at HP, Hewlett-Packard is by no means out of the woods.
Can Hewlett-Packard pull an IBM?
In order to adapt, and eventually thrive, in the post-PC world, Hewlett-Packard will need to execute a corporate pivot reminiscent of IBM's own massive strategic shift of the early 2000s.
At the time, IBM was deep in the hardware game (not unlike Hewlett-Packard today). However, under CEO Sam Palmisano's leadership, IBM was able to pivot away from lower margin hardware sales while also bolstering its higher margin consulting business in the span of three years with the acquisition of PwC Consulting in 2002 and the sale of its ThinkPad division to Lenovo in 2005.
Fast forward to today, and Hewlett-Packard appears pitted against the same problems that faced IBM years ago. In the video below, tech and telecom specialist Andrew Tonner looks at the similarities between Hewlett-Packard's and IBM's past and present predicaments and cautions about getting too excited too quickly about HP's prospects at the moment.
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