HP 2015 Annual Report Download - page 21

Table of Contents
specialize in one or more of our product lines. As a result, we may invest less in certain areas of our business than our competitors do, and our competitors
may have greater financial, technical and marketing resources available to them compared to the resources allocated to our products and services that
compete against their products.
Companies with whom we have alliances in certain areas may be or become our competitors in other areas. In addition, companies with whom we have
alliances also may acquire or form alliances with our competitors, which could reduce their business with us. If we are unable to effectively manage these
complicated relationships with alliance partners, our business and results of operations could be adversely affected.
We face aggressive price competition and may have to continue lowering the prices of many of our products and services to stay competitive, while at
the same time trying to maintain or improve our revenue and gross margin. In addition, competitors who have a greater presence in some of the lower-cost
markets in which we compete, or who can obtain better pricing, more favorable contractual terms and conditions, or more favorable allocations of products
and components during periods of limited supply, may be able to offer lower prices than we are able to offer. Our cash flows, results of operations and
financial condition may be adversely affected by these and other industry-wide pricing pressures.
Industry consolidation may also affect competition by creating larger, more homogeneous and potentially stronger competitors in the markets in which
we operate. Additionally, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers or
suppliers.
Because our business model is based on providing innovative and high-quality products, we may spend a proportionately greater amount of our
revenues on research and development than some of our competitors. If we cannot proportionately decrease our cost structure (apart from research and
development expenses) on a timely basis in response to competitive price pressures, our gross margin and, therefore, our profitability could be adversely
affected. In addition, if our pricing and other facets of our offerings are not sufficiently competitive, or if there is an adverse reaction to our product decisions,
we may lose market share in certain areas, which could adversely affect our financial performance and business prospects.
Even if we are able to maintain or increase market share for a particular product, its financial performance could decline because the product is in a
maturing industry or market segment or contains technology that is becoming obsolete. Financial performance could decline due to increased competition
from other types of products. For example, growing demand for an increasing array of mobile computing devices has reduced demand for some of our existing
hardware products. In addition, refill and remanufactured alternatives for some of our LaserJet toner and inkjet cartridges compete with our printing supplies
business.
If we cannot successfully execute our go-to-market strategy and continue to develop, manufacture and market innovative products, services and solutions,
our business and financial performance may suffer.
Our strategy is focused on leveraging our existing portfolio of products, services and solutions to meet the demands of a continually changing
technological landscape and to offset certain areas of industry decline. To successfully execute this strategy, we must emphasize the aspects of our core
business where demand remains strong, identify and capitalize on natural areas of growth, and innovate and develop new products and services that will
enable us to expand beyond our existing technology categories. Any failure to successfully execute this strategy, including any failure to invest sufficiently
in strategic growth areas, could adversely affect our business, results of operations and financial condition.
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Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.