HP 2014 Annual Report Download - page 26

ITEM 1A. Risk Factors.
The following discussion of risk factors contains forward-looking statements. These risk factors may
be important for understanding any statement in this Form 10-K or elsewhere. The following
information should be read in conjunction with Part II, Item 7, ‘‘Management’s Discussion and Analysis
of Financial Condition and Results of Operation’’ and the Consolidated Financial Statements and
related notes in Part II, Item 8, ‘‘Financial Statements and Supplemental Data’’ of this Form 10-K.
Because of the following factors, as well as other variables affecting our results of operations, past
financial performance may not be a reliable indicator of future performance, and historical trends
should not be used to anticipate results or trends in future periods.
If we are unsuccessful at addressing our business challenges, our business and results of operations may be
adversely affected and our ability to invest in and grow our business could be limited.
We are in the process of addressing many challenges facing our business. One set of challenges
relates to dynamic and accelerating market trends, such as the decline in the PC market, the growth of
multi-architecture devices running competing operating systems, the market shift towards tablets within
mobility, the market shift to cloud-related infrastructure, software, and services, and the growth in
software-as-a-service business models. Another set of challenges relates to changes in the competitive
landscape. Our major competitors are expanding their product and service offerings with integrated
products and solutions; our business-specific competitors are exerting increased competitive pressure in
targeted areas and are going after new markets; our emerging competitors are introducing new
technologies and business models; and our alliance partners in some businesses are increasingly
becoming our competitors in others. A third set of challenges relates to business model and
go-to-market execution. In addition, we are facing a series of significant macroeconomic challenges,
including weakness across many geographic regions, particularly in the United States, Central Eastern
Europe and Russia, and certain countries and businesses in Asia. We may experience delays in the
anticipated timing of activities related to these efforts and higher than expected or unanticipated
execution costs. In addition, we are vulnerable to increased risks associated with these efforts given our
large portfolio of businesses, the broad range of geographic regions in which we and our customers and
partners operate, and the integration of acquired businesses. If we do not succeed in these efforts, or if
these efforts are more costly or time-consuming than expected, our business and results of operations
may be adversely affected, which could limit our ability to invest in and grow our business.
In May 2012, we announced a company-wide restructuring plan. The restructuring plan includes
both voluntary early retirement programs and non-voluntary workforce reductions. Significant risks
associated with these actions that may impair our ability to achieve anticipated cost reductions or that
may otherwise harm our business include delays in implementation of anticipated workforce reductions
in highly regulated locations outside of the United States, particularly in Europe and Asia, decreases in
employee morale and the failure to meet operational targets due to the loss of employees. In addition,
our ability to achieve the anticipated cost savings and other benefits from these actions within the
expected time frame is subject to many estimates and assumptions. These estimates and assumptions
are subject to significant economic, competitive and other uncertainties, some of which are beyond our
control. If these estimates and assumptions are incorrect, if we experience delays, or if other
unforeseen events occur, our business and financial results could be adversely affected.
Competitive pressures could harm our revenue, gross margin and prospects.
We encounter aggressive competition from numerous and varied competitors in all areas of our
business, and our competitors may target our key market segments. We compete primarily on the basis
of technology, performance, price, quality, reliability, brand, reputation, distribution, range of products
and services, ease of use of our products, account relationships, customer training, service and support,
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