Hp Cisco
What are the challenges facing Jim Heal and Mike Thomas? Jim Heal of Hewlett-Packard, Inc (HP) and Mike Thomas of Cisco Systems, Inc (Cisco) were both leaders of strategic alliance management teams that were formed in early 1997. Both teams were created to help facilitate the strategic alliance that was formed between HP and Cisco. As with all alliances, a wide variety of issues and challenges emerged that had be to be resolved and it was the purpose of the alliance teams to solve such issues. Beginning in February 2002, a formal contract to expand the HP and Cisco alliance was being negotiated and it was during this time that several important challenges emerged that would require the full attention of Mr. Heal and Mr. Thomas. One of the first challenges facing Mr. Heal and Mr. Thomas is the notion of strategic vs. tactical decisions. On page three of the case, we learn that in February 2002, Mr. Thomas met with HP’s then worldwide alliance manager for Cisco, Fabio Fontana, and decided that the “alliance would benefit if HP become more strategic while Cisco became more tactical.” Further discussion on page three tells the reader that strategic refers to a firm achieving long term goals while tactical refers more to achieving short-term goals. In fact, the case mentions that “over 70% of the team’s (Cisco) success (was) measured by factors other than near-term revenue.” (Page 3) Therefore the challenge will be in finding goals that enable both firms to achieve a significant financial return on the alliance, yet enable the alliance to be successful. If the HP CEO elects to place more emphasis on short term revenue goals due to a sequence of missed quarterly earnings, then such action could create conflict for the Cisco alliance. Further, as the case states on page eight, “the company rarely makes as much money selling someone else’s products as it does selling its own.” Therefore if there is a pressing need to increase revenue in the near term for
References: Casciaro, Tiziana and Christina Darwall. The HP-Cisco Alliance (A). Boston: Harvard Business Publishing, 2003. Print. Casciaro, Tiziana and Christina Darwall. The HP-Cisco Alliance (B). Boston: Harvard Business Publishing, 2003. Print.