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Hp Compaq

In: Business and Management

Submitted By matt00112233
Words 1001
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‡ Dell Computers and IBM posed threat for HP (Hewlett Packard) and
‡ Decision regarding whether HP should merge with Compaq or not.
‡ Carleton S Fiorina strongly in favor of merger while Walter B Hewlett, son of one of the founder member was against the merger.
‡ Certain pros and cons for HP regarding merger:
i. Compaq¶s huge storage business i. New CEO could start fresh strategy ii. Compaq¶s Himilaya server ii. Merger will expose HP as PC popular computers, diluting its printing business iii. Deal could double the size of iii. Difficult to merge such two large
HP¶s repair-business. firms Strengths and Weaknesses
i. Imaging and printing system ii. Strong reputation for innovation and quality iii. Strong in UNIX servers.

i. Declining growth of PC market ii. Weak in server market that has profit potential iii. Vague direction of working.

i. Hardware business ii. Strong distribution channel iii. Known for information technology

i. At time of merger, it had huge. inventory ii. Dell had strong position in online business iii. Less capable of taking orders and customizing computers

Problem Faced
‡ Difficult for Fiorina to make up minds of all board members in favor of merger. ‡ Workers anger because of laying off workers and les salaries offered.
‡ Steep fall in Stock of HP after merger.
‡ Shares fall from $23.5 billion to $17.70 billion as investors slashed value of deal from $25 billion to $19 billion.
‡ Sales of HP¶s Window server fall from 10.6% to 8.2%
‡ Share of HP¶s PC dropped from 7.8% to 6.9%
‡ Fiorina promised 15% revenue in 2000. But at the end of the year it was realized that company earnings of $9.22 million was 25% below.


SWOT Analysis of Case
‡ HP is a renowned company and is well…...

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