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The merger between HP and Compaq elicited several issues. Indicatively, there are critical lessons about corporate strategy that can be learnt from this merger. The acquisition was unique from other dominant mergers that have occurred in the recent past. The stock market played a crucial role in the acquisition process.
This strategy enabled HP to develop a potential stepping-stone towards a remarkable global performance. The corporate strategy applied also enabled HP to acquire the largest share, (64 percent) of the total value. The next strategy involved the absorption of Compaq employees in HP. This integration also included the senior board members of the company.
The strategy was vital since it enabled the protection of key interests of Compaq. Particularly, this is critical in the process of decision-making and policy formulation. The acquisition involved the establishment and analysis of product plans. This important observation enabled HP to continue dealing in the Compaq products.
However, the product brand changed and combined both the companies. The strategy has enabled a successful process of marketing and product promotion during the period of merger. The two companies also rationalized the product lines. Apart from this, they engaged in the harmonization of branding and outlook. This initiative enabled Compaq to continue with its client base and market orientation. Hp decided to operate within four major frontlines and divisions.
In the acquisition deal, the IT infrastructure division was slotted for Compaq’s leadership. The president of the Compaq was to provide the critical leadership in this special division. Operating within four divisions managed at a focal point was a transformational and unique corporate strategy.
The fundamental objective was to enable Compaq to exhaust all its products and attain its projected level of efficiency. HP chipped in to augment the low level of organic development evident in Compaq. Another significant strategy for the merger process was the development of a uniform business model. This strategy entailed the engagement of expert advice and assistance. Key partners from the two companies tested the operational structure.
The testing process provided a chance for identification and classification of expected challenges. A remarkable length of time was used for rationalization. During this period, several operations were undertaken. These included the closure of several manufacturing plants.
The merger also made specific improvements on different joint operations. These included improvements on product brands, manufacturing and delivery systems. Observably, the acquisition process applied diverse strategies that are crucial for effective learning and development.
The Advantages and Disadvantages Associated With the Strategies Followed By Dell and HP
The corporate strategy applied by the two companies during the process of acquisition has notable disadvantages and advantages. For instance, the strategy enabled a smooth and successful transition process.
This was achieved through fusion of the major product lines and brands. Apart from this, it is notable that the strategy enabled the reinforcement of the human resource and expert capacity. The companies brought together most of their senior, experienced and expert workers together. Other notable disadvantages emanate from this strategy.
For example, absorption of employees from Compaq may lead to the importation of foreign work ethics. Compaq had already failed to gain the competitive advantage. Ideally, a fresh group of employees would be ideal for the new joint venture. There could also be possible risks of infiltration on the capital and assets of HP. These include some of the advantages and disadvantages of the strategy.
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