Thus, the company did not manage to the fullest extent to capitalize on achieved competitive advantages and did not manage to cover all the risks

Before the merger, the HP managers expected their market growth rate between the years of 2002 to 2004 to annual increase by 12%, for the PCs business segment to grow by 8% annually, for services segment by 12% and to increase imaging and printing segment by 10% annually. The company projected the highest profit margin growth in the servicing sector as this was Compaq competitive advantage before the merger. After 3 years of the merger, the actual earned revenues were not equal to the predicted ones in any sector: the enterprise revenues fell by 20% in 2002 compared with their 2001 rates, and by 5% from 2003 to 2002; the same happened with PCs segment, while services segment...

The company succeeded in growing its' revenues in the imaging and printing business by 5% in the first year and by 11% in the second year. Interesting enough, operating profit margins have also decreased by about 5% in all the business segment, while the increased in the services segment by 4.5% in 2001 and by 11.1% in 2002, by 9.17% in 2003, 11.02% in 2004.
Following the announcement of the merger, the HP share prices fell by 20% within 7 days time, leading to the overall drop in value of the total acquisition, and the growth in price has picked up only after 3-4-month after the announcement.

Nguyen, H., Kleiner, B. The Effective Management of Mergers, Leadership & Organization…