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HP-Compaq Merger

Free Essay Sample «HP-Compaq Merger»

The business world is a constantly changing entity which requires imagination and an ability to look ahead. Companies and whole organizations separate and join in order to increase profits and decrease spending. A great example of an enormous change is the merging of two companies, Hewlett Packard and Compaq, which specialize in computers and information technology. Even though a great amount of people believed that this sort of change would be detrimental to both firms, particularly to HP, the results have shown that the decision made by executives was a correct one.

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Case Summary

The acquisition took place in 2002 with Hewlett Packard spending 19 billion dollars to purchase Compaq. As each company had problems of its own, many strategic specialists and observers were predicting that these issues will be multiplied instead of being fixed. However, Fiorina, chairman and CEO of Hewlett Packard as well as the board of directors wanted to make an epic move through the merger, thus making HP computers one of the largest companies in the world. During the transformation stage, shareholders of Compaq were accepting of the change and did not back down while there was hesitation and disbelief on the part of HP’s shareholders. An enormous amount of planning ent into the merger, and it eventually proved beneficial since savings and profits vastly increased. The unification of the two companies is definitely an innovation case because the plans and goals are bold and far reaching.

Discussion

Hewlett Packard and Compaq are two well-known companies that provide products and services to businesses as well as private individuals, so the market is covering all social and business spheres.  The merging was a great idea because separately the firms have been experiencing problems. Together, they have not multiply their issues as many prophesized, instead, the equipment, locations and ideas were exchanged to produce a much more efficient and resource saving partnership. In a world where businesses are appearing and evolving at an increased rate, it is imperative to calculate loses and benefits of a merger as the decision might be fatal to organizations. In case predictions are wrong, it is quite possible that the firm will go bankrupt or ruin its reputation.  The fluctuation in the demand has been uncertain with the emergence of rivalry companies and new technology. IPads and ultra thin notebooks produced by Apple create a worthy competitor, so the ideas HP brings forth for the new generation are crucial. <

Another important part of HP and Compaq merger is the direction and understanding of the market. It is well-known that the recent decade has seen some economic problems and things are looking grim in the future as well. Nonetheless, the merger did take place and has proven beneficial because technology is an inseparable part of the human world. The increase in production and businesses will require computers and their evolvement, so the larger the company, the greater the physical area it can cover. Not only will these firms provide products, IT services will be handled by professionals through the unification of two computer giants. The interest and determination of executives as well as board members will target the development sectors and technological innovations.  It is possible to assume that with the confirmation of companies’ success investors will be more than willing to provide the needed resources.

Overall, it has been demonstrated that even when there are risks and criticism regarding a major decision being made by organizations, planning and strategy do pay off in the end. Hewlett Packard and Compaq are still on the market, and the prognosed increases in profits are showing to be even greater than originally predicted by both sides.

Free Essay Sample «HP-Compaq Merger»

 

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