HP_and_Compaq_Combined__In_Search_of_Scale_and_Scope

This convinced wayman to look deeper at the proposed

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Unformatted text preview: erger was that HP believed the relative positions of the companies’ lines of business were complementary. Wayman said, “Compaq was strong in industry standard servers and HP was weak there; HP was strong in Unix servers and Compaq was weak there and so on. And where we had overlap such as in managed services, our combined size and scale increased our possibilities in the market.” This convinced Wayman to look deeper at the proposed merits of the deal. Wayman said: Once I understood what we had to work with, I saw how this could make sense. So then you get into some of the more challenging parts of the analysis: How does the merger position you strategically going forward, as opposed to just the here and now? Strategically, if you looked at what this meant to HP, it brought some real positives to either bolstering our strategic position where we were, or adding to our strategic position in areas in which we wished to have strength. Two of the latter categories are industry standard servers and storage. We were number four in servers, and so [Compaq’s assets here offered] a clear positive strategic positioning in our ability to bring to customers a full portfolio of our products. The same is true in storage. Compaq had an industry leading position. In areas that we had already said we were heading, such as managed services or outsourcing, the merger doubled our size and that makes a big difference in terms of your credibility and resource levels. That plus, frankly, some of EDS’s troubles have just dramatically changed our position in the managed services market, which is something we wanted to accomplish. The next element I considered was the management team: The ability to integrate at the human level, culture, board dynamics, and governance. Can you bring the 14 All quotes from Robert P. Wayman are from the authors’ interview on September 8, 2003, unless otherwise cited. Subsequent quotes from this interview will not be cited. This document is authorized f...
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This document was uploaded on 02/16/2014 for the course MGMT 237 at UPenn.

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