Hp / Compaq Case Study
HP / Compaq CASE Study
Pavis Phkkanasut (z3284637)
What would a SWOT analysis reveal?
SWOT analysis is a strategic planning method used to evaluate strengths, weaknesses, opportunities and threats involved in a business.
Strengths (HP): IT-services businesses, strong brand image and reputation
Weakness (HP): Computing and IT-services businesses noticeably lagged the competition, and the company did not have an organic growth strategy for these businesses.
Threats (HP): imaging and printing was continually being challenged by Lexmark and Epson, which were selling inexpensive, lower-quality printers in a bid for market share.
Opportunities (HP): Opportunities to expand business in enterprise computing and global services.
Strengths (Compaq): Enterprise computing, strong brand image and reputation.
Weakness (Compaq): Direct distribution had helped lower its costs, access still operated at a negative margin.
Threats (Compaq): Increase in competition of Dell, face price competition which leads to lower profit margin for the company.
Opportunities (Compaq): Opportunities to expand business in IT services.
Was the merger strategy sound?
The merger strategy sound valid.
Compaq believed that positive operating margins could once again be achieved through economies of scale. Compaq was also the market leader in fault-tolerant computing and industry-standard servers, where HP did not have a presence.
Compaq was not strong