HP is one of the largest companies in the world but despite its success and multinational reach, it is still subject to forces beyond its control. Hence, in order to properly defend its empire and plan for growth, management of HP have to understand the way the external world works, where it is progressing towards and how it all affects HP. Three broad and different categories form the external environment of HP and these are the general, industry and competitor environments. The more relevant and significant aspects of each will be delved into for the purposes of this analysis. General Environment The general environment affects HP’s operating landscape as well as the markets it competes in. Attempting to strategise without understanding these forces will be disastrous to HP. HP’s presence around the globe requires a multi-ethnic workforce and this exposes it to different value systems. If HP were to impose its successful Silicon Valley mindset on a subsidiary in a different continent, it might not be able to observe the same performance from employees. Even though there are signs of increased receptiveness to American culture from other countries, a drastic change to centuries of heritage cannot be expected. Moreover, as mentioned in the case, the HP-Compaq merger will also raise organisational culture issues and it will be a complicated process in optimising synergy in two geographically large companies. The origin of HP and its future lies in technological progress. It was relatively easier for HP to outperform competitors because the pace of new breakthroughs was slower decades ago then it is now in the 21st century. It is thus important for HP to continue monitoring changes in technology and react decisively or it may be left behind. As mentioned in the case, HP failed to take advantage of the Internet and thus lost out on a possible golden