Question 1. First and the most important strategy, applied by HP after acquisition, was cost structure savings through elimination of redundant administrative function and layoffs. After the merge HP got an opportunity to use Compaq’s well developed and effective supply chain and this fact was stated to be an important mean of improvement of HP’s position at the market.
Dell, in its turn, used more efficient cost-leadership business model together with the effective managing of its supply chain to strengthen its position at the market. Both, HP and Dell, used decentralized as an important mean of business goals achievement. Acquisition of Compaq gave HP free access to all business practices Compaq used in the market of different computer services. As a result, through the acquisition HP acquired not just a company, but all its business solution that helped HP to suggest its clients with a new, total “computer package” service.
Question 2. The results of HP’s corporate-level strategies after acquisition became the improved quality of its products together with the increased number of services it could suggest its client. The reduction of the cost structure did not mean that HP would increase its supply-chain efficiency; however, it still helped HP to move forward in the market and compete in the major league with such giants of computer service market as IBM.
The major result of diversification that both companies used became the low level of effectiveness both of them got from the newly launched services. For instance, the supposed income from the printer business HP indulged into was seriously lessened because of the Dell’s strategies that successfully compete at the same market. Moreover, despite the fact that HP could boost the total “computer package” service, it did not occupy a large niche and could not compete properly with the companies, who suggested such “package” for many years.
References
Jones, G. J., Hill, Ch. W. (2010). Strategic Management: An Integrated Approach, South-Western Cengage Learning, 456 pp.
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Running head: WHY HP ACQUIRED COMPAQ …