When companies become big, they often start diversifying their product line and service offerings. Hewlett-Packard, for example, sells PCs, printers, high-end business/corporate hardware, and service operations. This is not always ideal though, as addressing completely different customer segments can be a hard task for a single company to manage. As a result, Hewlett-Packard plans to split the company into two different companies later this week: one that sells PCs and printers and another one that sells corporate hardware and services operations. The advantage of doing this is that each of the two separate companies would be able to adopt a focus strategy that better addresses and focuses in on their respective customer segments, which are families and people that need personal computers/printers and businesses that need business hardware and services. This would be beneficial for HP since the company has struggled with its PC business in recent years due to the shift towards mobile computing in tablets and smartphones, while the corporate services market is a market that has grown at a much faster pace. Therefore, a specific company that adopts a low cost or differentiation focus strategy directed towards offering hardware and services to businesses would allow HP to position itself a lot better towards future growth in this corporate services industry. Basically, this business-oriented company’s management would now be able to focus all of its energy on the more profitable business of offering hardware and services to businesses while not having to worry about managing a declining PC business.

Article Source: http://www.reuters.com/article/2014/10/05/us-hp-restructuring-idUSKCN0HU0QY20141005

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