Research On The Pros And Cons Of Hp And Compaq Acquisitions And Revelation

After entering the 1990's, the internal and external environment of the enterprise has changed dramatically: science and technology have been developing rapidly. Therefore, to analyze and forecast the changing environment and to keep favorable position, it is imperative for the enterprise to change the traditional management into strategic management. Especially for the recent year, more and more enterprises utilize the purchasing and annexing to obtain economy in scale and cut the average cost.September 4, 2001 - Hewlett-Packard Company and Compaq Computer Corporation announced a definitive merger agreement to create an $87 billion global technology leader. The new HP will offer the industry's most complete set of IT products and services for both businesses and consumers, with a commitment to serving customers with open systems and architectures. The combined company will have No.l worldwide revenue positions in servers, access devices (PCs & hand-held), and imaging & printing, as well as leading revenue positions in IT services, storage, and management software. The thesis analyzes and makes an inquiry into approach a subject from the different angles: strategic management and financial benefits. The merger is expected to generate cost synergies reaching approximately $25 billion annually and drive a significantly improved cost structure. In a sense, this merge not only helps us to research the development of the IT industry, but also leam the economic trend and developing way of the world, and comprehends the merge of capital, law technology and etc.The thesis is comprised of four chapters in all:Chapter One chiefly recalls the courses the two companies have traversed. First of all, the thesis describer the HP's developing course. HP was founded in 1939, and now it became a giant in IT industry after 63 years. Compaq was founded in 1982. The initial goal is to create the new portable personal computer that can be compatibility with IBM. Compaq completed the acquisitions of Digital Equipment Corporation in June 1998. This transaction was one of the biggest transactions in IT in 1998. Compaq has become a leading global provider of enterprise technology and solutions after 20 years.Chapter Two makes further explanations that why the two companies come together and the analysis of the benefits and risks. This chapter consists of two parts. The first part analyzes that the decisive move that accelerates their strategy and positions to win by offering even greater value to their customers and partners. The second part clarifies the advantages and the some risks under the merge.Chapter Three is to analyze whether is the effective merge from the angle of financial benefits. Above all, the thesis lists the main financial data of the two companies over the three years. The last part of this chapter is the financial forecast to the new HP and the reaction of the market at present. The transaction is expected to be substantially accretive to HP's pro forma earnings per share in the first full year of combined operations based on achieving planned cost synergies.The last chapter of the thesis forecasts the prospects of strategic management in China and discusses this merge case can provide the influence and inspiration to our companies. Section one emphatically points out that establishing and developing strategic management in China is not only necessary but also feasible. In section two the author puts forwards some suggestions and problems when set up and develop the strategic management and merge.