Managing the Strategic Dynamics of Acquisition Integration: Lessons from Hp and Compaq

Managing the strategic Dynamics of Acquisition Integration: Lessons from HP and Compaq

Vallap reddy kamal Kishore reddy

012490216

Mergers and Acquisitions are the most dominant inorganic growth strategies. However, most of them fail. This is a fact that can be read on many studies conducted by many reputable consulting companies. In this framework, it becomes even more important to analyze the processes that can lead to successful mergers. This paper discusses the Merger between HP and Compaq. Such a big and bold merger had never taken place before in the technology industry. The challenges for this merger were really interesting and many aspects of the whole process are unique and worth analyzing. That analysis can certainly be helpful in identifying good and bad practices for conducting merger processes.

Conceptual Framework:

There is a conceptual framework that decomposes the overall acquisition integration process into four sequential and co-evolving processes: (i) formulating the integration logic and performance goals, (ii) establishing the integration planning approach, (iii) executing operational integration, and (iv) executing strategic integration. Below is a quick description of each process.

1.Formulating the integration logic and performance goals:

This process involves not only ensuring that the merger makes strategic sense, in terms of goals to be achieved in the short and long term, but also effectively communicating the integration logic internally and externally.

Deriving the Integration Logic:

Before the decision to merge with Compaq, HP’s board of directors considered four potential development vectors which are :

a. Continue along the current path: Same business and Improve performance without any acquisitions.

b. Aggressively grow services capabilities, including outsourcing and business process consulting via acquisitions.

c. Put primary focus on becoming the leading printing and imaging company, and

d. Become the...