The acquisition of Compaq by Hewlett Packard illustrated some strategic decisions that have impacted both companies and the computing world in general. Managerial decisions were assumed and the fate of Hewlett Packard, the old-school, development-minded and highly revered company and Compaq, the more energetic, marketing-minded entity hung in the balance. With the merging of the two companies, the new HP would corner a large portion of the PC market and be able to compete with Dell on a more level field. At the same time, strategic maneuvering would hopefully boost their IT sourcing to global level in order to vie for a piece of IBM's market. .
One of the main ideas that were proposed of the merger was that by combining, complementing and cross-sharing the products of each of the companies, that the new HP would control 18% of the PC market putting them at number one in market share. Also, similar and complementary system architecture gave the two companies an advantage in the sale of servers and internet systems. The new CEO, Carly Fiorina expected to be able to take advantage of these elements and provide the world with a resource by which any company could turn to in order to fulfill all its web-powered, business needs. The plan was to consolidate the numerous, disjointed departments and legacy programs within HP into six leaner and more manageable divisions concentrating on innovation and finely tuned marketing tactics. A pitfall I see in this absorb and distribute type method is consumer and shareholder confusion and the under stimulation of internal support mechanisms. Everything happens too fast for consumers to develop a tangible and logical explanation as to why they should purchase the newly repackaged products. And support mechanisms, which may have worked for the separate companies are restructuring at the same time as management and the product line. As a result, consumers either balk or quality control and product support suffers as market blitzes succeed.
