HP-Compaq Combination - Examination:
Compaq pre-merger Compaq – Founded more than 20 years ago Primary power - Creativity Compaq's primary business categories – Get, commercial and consumer Computers Enterprise processing: servers and storage goods Global solutions Market leader in Computers, with more foreign sales than US Industry leader in fault tolerant computing and industry standard servers
Compaq pre-merger Compaq had successfully create a direct style in Computers #2 inside the PC business, stronger on the commercial part Continuously deterioration performance made Compaq administrators impatient Dell became strong competitor through cost performance Compaq missed the online bus and its made-to-order system through its stores failed to lift off due to awful inventory supervision
Compaq pre-merger To bring Compaq for the online industry, Capellas (CEO) bought Digital Equipment (AltaVista) Acquisition was incohesive leading to 15000 layoffs and loss in 1998 Fresh management lacked the cutting edge to maintain stableness Bad investments Got captured in a cycle of expense cutting and layoffs Organization was as well small and badly run to maintain its wide array of goods and solutions
Hewlett Packard – pre-merger:
Hewlett Packard – pre-merger Made its debut in 1938 simply by two Stanford graduates – William Hewlett and David Packard. HEWLETT PACKARD incorporated in 1947 HORSEPOWER introduced their first PERSONAL COMPUTER in 80 and the LaserJet (company's the majority of successful product) in 1985 In 2150, HP got 85, 000 employees and revenues of $48. eight bn Ranked 13th among Fortune 500
Growing challenges at HORSEPOWER:
Developing problems for HP HEWLETT PACKARD was not establishing to technological innovation fast enough Margins were going down IPG (HP's The image and Stamping Group) was the leader in the market part but did not rank everywhere among top 3 in servers, storage space or services Printing line was facing competition by Lexmark and Epson which are selling low-quality inexpensive printers Needed to build strong complementary business lines
Fiorina attempts to rejuvenate HORSEPOWER:
Fiorina tries to rejuvenate HP Carly Fiorina joined in 1999 hoping to excite a complacent HORSEPOWER Cut incomes, laid off workers Wanted to help to make high end computers HP's target According to her, home and business Computers, UNIX servers were the biggest areas of expansion
Pre-merger statistics for Compaq and HORSEPOWER:
Pre-merger statistics to get Compaq and HP
HP's position ahead of merger:
HP's situation before combination By 2001, as the industry stumbled, meeting growth targets became difficult intended for HP and it was forced to cut jobs and scrap plans Consequently HP stock price fallen drastically. Turning the company around required more than just strategy from within
Falling inventory prices just before merger:
Falling inventory prices prior to merger Back again
Potential impact of Combination:
Potential impact of Merger Merger would make a full-service technology firm able of doing everything from selling Personal computers and printers to setting up complex systems Merger would eliminate redundant product teams and costs in marketing, advertising, and shipping, and preserving most of the two companies' revenues.
Market Benefits Merger will creates quick end to end leadership Compaq was a very clear #2 inside the PC business and better on the industrial side than HP, yet HP was stronger within the consumer side. Together they would be #1 in market share in 2001 The combination would also greatly expand the numbers of the company's support professionals. Therefore, HP would have the largest market share in all hardware market sections and become the quantity three in market share in services. Boosts access to the marketplace with Compaq's direct capability and low cost structure The much larger company would have scale positive aspects: gaining bargaining power with suppliers; and scope benefit: gaining discuss of finances in significant accounts.
Detailed benefits of Combination:
Detailed benefits of Combination HP and...
References: Buchanan, Anna Deb., The Combination of HP and Compaq, Case (A) and (B), Darden Business Publishing, 2005 Hoopes, Charlotte L., The Hewlett-Packard and Compaq Merger: A Case Analyze in Business Communication, Marriott College of Administration Supply Cycle Management to get the adaptive enterprise, HP's Internal Record www.nasdaq.com Strategic Analysis: The mixing of Hewlett-Packard and Compaq, Tiffany Adams and Renee Poutous Compaq and Hewlett-Packard, Mergent On the web, www.mergent.com Burgelman, Robert A. and Webb McKinney, Handling the Strategic Dynamics of Acquisition Integration: Lessons from HP and Compaq, August 2005
Contributions Simeen Mirza –Premerger Situation Pingali Bharadwaja V L - Reason Shrikanth E – Deal financials Surya Prashant S N Rao - The use Nilangsu Mahanty – Analysis of merger But finally, everybody worked on everything..
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