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Hp And Compaq Case Essay

1700 words - 7 pages

On November 6, 2001 Carly Fiorina HP CEO announces merger with Compaq. This is the one of the most notable days in HP history and as well as PC industry. It was called Largest merger in the PC industry and dumbest deal of the decade. When analyzing this merger after 13 year picture is changed. HP share price has raised more than 150% after merger. Carly Fiorina is not CEO and HP is still one of the most profitable companies in the world.
HP is one of the famous companies found in Pao Alto in the garage. It was founded in 1938 in the year when PC industry wasn’t existing, when Steve jobs and Bill Gates weren’t even born. It is the company from which PC industry giants like Apple and ...view middle of the document...

ALL CEO beginning from 1977 till 1999 have worked in the company many years. All of them new and praised HP culture.
Nineties were hardest years for HP as for the most companies. Revenues were decreasing and shareholders thought that it needed changes. IN 1999 Carly Fiorina was appointed in HP.

Carly Fiorina became chairman and CEO of HP in 1999. She received a Bachelor of Arts in philosophy and medieval history from Stanford University in 1976.  She joined AT&T in 1980 as a management trainee and rose to become a senior vice president overseeing the company's hardware and systems division. In 1995, Fiorina led corporate operations for the spinoff from AT&T of Lucent, reporting to Lucent chief executive Henry B. Schacht; she played a key role in planning and implementing the 1996 initial public offering of stock and company launch strategy .She became the
first woman to lead so large a company, and consequently, one of the nation’s most
prominent female executives. While she was chief executive at HP, the company weathered the collapse of the dot-com bubble, although the stock lost half of its value throughout her tenure. Perhaps more important to HP’s future, however, Fiorina became the first outsider to take charge of the 62-year-old company.

She thought that HP needed some changes to survive in this highly evolving industry. HP was standing still after inventing Printer and one day without innovations HP would be gone. HP was not capable for innovations way out of this problem was buying another company.
Annunciations of merger with Compaq were struck for many HP loyal fans. HP share Price has fallen next day. Everyone thought HP won’t survive.
The company is better known as Compaq Computer Corporation. This was company that started itself as a personal computer company in the year 1982. It had the charm of being called the largest manufacturers of personal computing devices worldwide. The company was formed by two senior managers at Texas Instruments. The name of the company had come from-"Compatibility and Quality". The company introduced its first computer in the year 1983 after at a price of 2995 dollars. In spite of being portable, the problem with the computer was that it seemed to be a suitcase. Nevertheless, there were huge commercial benefits from the computer as it sold more than 53,000 units in the first year with a revenue generation of 111 million dollars.
Idea of the merger came from the phone call between Fiorina and Compaq chairman
and CEO Michael Capellas in late June of 2001. Original idea of the call was possible licensing agreement.
Fiorina thought so many licensing agreements were not profitable for the company. She wanted to consolidate all parts of the PC industry and thus to offer clients more sophisticated products.
Compaq was specialized in manufacturing and selling PC, Servers, Pocket Computers and Storage. Merger would consolidate those businesses and thus boost creativity in the...

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