Marketing :: essays research papers

Hewlett-Packard/Compaq MergerIn 2002, the (HP/Compaq) optical fusion announcement was made by Hewlett-Packard CEO Carly Fiorina and Compaq head Michael D. Capellas. If in fact the nuclear fusion goes through, it would be the largest merger in the computer industry history. Some may ask why this merger was so important to these companies. The truth of the matter is that both of these companies opinion that this merger give benefit their company not only at the present time but in the future also. Along with a huge merger like this one, there are some pros and cons that interact with a huge merger like this one. According to a quotation article these are some of the reasons why some may meet the merger and some reasons why some may oppose the merger Why to support the mergerThe new-made HP will experience the market leader in servers, storage, management software, printing and imaging, and PCs, improving our mightiness to offer the end-to-end solutions customers demand.We wi ll double our profitable and growing serve business, enhance our R&D efforts, and extend our customer reach in 160 countries.We will achieve annual cost savings of $2.5 billion, adding $5 to $9 in present revalue to each HP touch and increase earnings per share by 13% during the first twelvemonth following the merger.By improving profitability in enterprise reckoning systems, in PCs and access devices, and in IT services, we will have the financial metier to extend our successful imaging and printing franchise into new multi-billion horse categories like digital imaging and digital publishing.The closer you look, the more you will see that the merger of HP and Compaq is the single best way to sanction our businesses and improve our market position, deliver more of what our customers need, enhance opportunities for our employees, and increase the value of your investment.Why to oppose the mergerAcquiring market share does not translate to leadership, i.e., demonstrated better business model, technology innovation or success at winning business from competitors.Admission of no new significant technology/capabilities added to HPs portfolio. Significant overlap creates cost synergies which are startle by revenue losses from rationalized products and servicesLarge stock proceedings statistically more risky. Upon announcement of the proposed merger, Moodys downgraded HPs debt rating and put it on disallow watch, S&P has also put HP on ostracise outlookBigger, but in an unattractive business, commodity computing. Hardware as diminishing economies of scale and HP and Compaq already has significant scale.