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Hewlett-Packard - Coursework Example

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Hewlett-Packard

In line with this merger, many have stated that this endeavor is both beneficial to the company. Upon analyzing the performance of Hewlett-Packard and Compaq as separate entities, these two are making waves for their markets specifically those of IT in nature. The merging of the company created a US$ 19 Billion value of the company, which signaled a big boom in the financial markets with high hopes and expectations regarding the company's operation formed by two IT giants. The company's future undertakings made me more interested in this study. The website www.news.com, also cited that this company would dictate a whopping 81% share in the US PC Market. One question was still unsettled, " will this merger eliminate all doubts and speculations during the negotiations of these giants to merge"
Making profit out of the production if we are to deal with the IT industry is not the main goal of it nor it would justify the productivity of the company. In this regard, the threat of extinction among the big names in the IT industry is inevitable.
The said companies (HP and Compaq) are making profit in this field, however, to compensate the needs of these companies and for them to be stable, they must increase their production above the projected number of these companies in order to compensate the demands and high rising cost of maintaining an IT company. To add to that, competitors like DELL, IBM, Toshiba, Sony and Sun Microsystems are some of the many competitors who divides the market of HP and Compaq. These premises made HP and Compaq decide to join forces in order to dominate the IT world.
There are numerous mergers in the IT industry, which these mergers were intended to dominate the Market, wherein the common thinking during that time is " the survival of the fittest." Below is the timetable of the merger of these two companies.
Table A




Due to rising competition among different It companies, merger seems to be only option left fro the market of the company to expand and survive.
REASONS FOR THE MERGER:
Dealing with IT market is a great task to deal with. Innovations and related strategies is an important component to fare with other activities that are dominated by some firms. To further analyze the problem, it is essential to know different components concerning this. There are main reasons on why merger took place regarding the merger of the said companies.
1) Servers- Perhaps this is the main reason on why competitions in the IT industry is a though thing to deal with. Market leaders in this sector are the HP Alpha 9000 series servers with UNIX playing a dominant role as well. Other noteworthy firms in this sector are IBM and Dell but they are far behind from HP. Compaq is not a factor in this sector.
2) The rise of digital gadgets- Printers, Scanners and Digital cameras is indeed dominating the world of technology. In this regard, innovations concerning these gadgets are fast rising and these challenges are among the main reason of being obsolete from these things compared with the products and services offered by these two companies.
3) IT Services- The importance of this kind of service play a vital role not only in the World of technology, but the business world who needs it badly which is their primary ...Show more

Summary

When Hewlett-Packard made a history on the 3rd of May year 2002 by acquiring Compaq, which is considered as one of the largest tech mergers in history books, many questioned the aforementioned merger. After eight months in the works, including a three-day trial in Delaware, with several consultations, HP-Compaq (HPQ) came into picture with the transaction "all-share merger" (www.economist.com).
Author : nhand
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