Research Paper On Merger, Acquisition, And International Strategies
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The purpose of mergers and acquisitions is to increase shareholder wealth and achieve competitive advantages in the market. Mergers and acquisitions are a very useful tool for the company’s restructuring. With this extrinsic pathway, the company ensures the compliance of its activities with the chosen concept of development.
Mergers and acquisitions have a number of advantages over the methods of internal corporate development. The chief of them, serving at the same time the primary motivating factor to conduct mergers and acquisitions, is a synergistic effect, manifested in the creation of added value from mergers / acquisitions. The impact of mergers / acquisitions is rather a long-term. So the important point is the priority of long-term objectives of the desire to extract short-term benefits to be observed by the leadership of the merging companies (Faulkner, Teerikangas and Joseph, 2012).
For the completion of the assignment, Hewlett-Packard was chosen as the public corporation with the number of acquisitions operating globally and Credo Technology Group, LLC, as the US technology repair company.
Mergers and Acquisitions of Hewlett-Packard
Today, HP is one of the largest players in the IT market. Desktop PCs, servers, notebooks, PDAs, laser and inkjet printers, scanners, digital cameras, calculators, networking equipment, and various accessories are available under the HP logo. The company’s revenue was recorded $111.454 billion in 2014. The company’s founders – William Hewlett and Dave Packard – participated in its creation until the last moment. In 1996, Packard died, his friend and partner survived him for five years. In memory of the founders HP for $1.7 Mio bought a plot of land with the very garage, in which in 1939 the company’s history was born (Hewlett-Packard, 2015).
As of 2014, the corporation has made a full amount of 137 acquisitions since 1986. The F.L. Moseley Company was HP’s first acquisition in 1958. Performed action facilitated the company to come into the schemer commerce, which was considered as the precursor to its printer trade nowadays. The purchase of Apollo Computer in 1989 for US$476 Mio allowed the corporation to develop into the major provider of computer workstations. 1995 is known in company’s history as the acquisition of one more computer producer Convex Computer. The deal cost US$150 Mio. Hewlett-Packard followed-up its quantity, chemical and medical commerce into an autonomous business named Agilent Technologies. Buying Compaq in 2002 was the first step in an aggressive marketing strategy for HP. It is still the most expensive acquisition for the company (US$25 billion). Total sales of HP and Compaq allow the combined company to become a leader in the number of computers sold. Although it should be noted that the products under the brand name of the absorbed partners are sold more than just HP products. In a crisis, all companies in the industry seek to reduce their costs. Consequently, by means of a number of acquisitions Hewlett-Packard reduced costs by $2 billion in 2005 and $2.4 billion in 2006. The company spun out in 2004: internal costs of administration – USD 625 Mio, production costs – USD 600 Mio, due to the increase of turnover – USD 475 Mio, by combining the marketing function – $125 Mio. Therefore, a significant improvement in the cost structure and economies of scale may be called the driving force behind the association (Hewlett-Packard, 2015).
In 2009, the giant was able to buy Electronic Data Systems, taking second place in the international IT services market. In the same year, 3Com was purchased. In 2010, HP made a serious attempt to gain a foothold in the mobile market, adding to its empire Palm Company. Currently Eucalyptus, software platform for deploying private cloud computing in computer clusters, is the last purchase for HP (September 2014).
Merger or acquisition provides new opportunities to create compelling and ambitious vision that is understood and shared by those, who participate in the brands that took place prior to the transaction. These features allow building a new brand and / or use of the strengths of the existing brands. Therefore, chosen HP strategy of acquisitions, being the riskiest, allowed shortly and significantly enhance the proportion of the company in existing segments of the market, as well as to enter new markets.
Credo Technology Group, LLC, Possible Mergers and Acquisitions
The company is US computer support, which made a reputation for superior quality labor and outstanding consumer service (Credo Technology Group, LLC, 2015). One of the options for the company is to be acquired by some well-known technology hardware and equipment corporation like Agilent Technologies Inc. It is a global technology leader in areas such as high-speed analog-format digital converters, radio frequency technology, RF and microwave components and techniques, signal processing means. Support for education is one of the principal activities of Agilent. It provides multifaceted assistance to many educational institutions around the world. In particular, to ensure that the work on joint scientific and research projects on favorable terms, it supplies equipment, technology and software for teaching and research laboratories of leading universities. These projects are not fundamental, but more applied focus. Also as part of this support the company provides grants. Credo Technology Group helps underfunded schools; non-profit organizations on an extraordinarily rigid financial plan; and elders, veterans, and the disable on small, inflexible proceeds (Agilent Technologies Inc., 2015).
One of the major advantages will be in the opportunity to faster achievement of the goal, purchase of strategically important assets, especially non-material, like reputation or brand name. Mergers and acquisitions are a means to accelerate the achievement of growth with expansion both domestically and abroad. This strategy allows companies quickly to acquire a portfolio of economic and geographic assets, which has become one of the key sources of competitive power in the globalized economy. From the point of view of criterion time, the acquisition of an existing company with a well-functioning marketing and distribution system is preferable alternatives associated with the deployment of a new similar system. For newcomers to the market, or for those who have not worked in the field of Information Technology, namely mergers and acquisitions to quickly catch up with competitors (Faulkner, Teerikangas and Joseph, 2012).
International Business-Level and International Corporate-Level Strategies of Hewlett-Packard
Business strategy means the choice of development path, markets, competition and methods of doing business by the company. Thus, HP is a company of high-tech sector, working to understand how technology and services can help people and businesses to solve problems, achieve the desired results and to realize their potential and dreams. HP uses new ideas and approaches to create easy to use, more efficient and reliable technology to apply them to improve continually and make more comfortable the lives of all its customers. List of key strategic priorities of HP consists of Big Data, the development of interaction between web and mobile solutions, ease of working with IT infrastructure and security. If talking about a similar problem, the HP today focuses on four main areas of development, namely the modern understanding of infrastructure converged infrastructure, cloud and software-defined datacenter. HP mission is to offer technologies and services that enhance business efficiency, promote the well-being of the public and increase the quality of life of clients. In addition, the company is committed to providing its products to the maximum number of people (Hewlett-Packard, 2015).
Since its founding Hewlett-Packard Company is guided not only by business goals, but also pays close attention to corporate social responsibility, customers and partners, employees and the states, in which the company operates.
Company’s corporate strategy relates to the mergers and acquisitions, which allow improving the overall performance of work in those industries, where the company already operates, finding ways to obtain synergies among business units, which suggests that the effect of joint action above the mere sum of individual efforts, and making it a competitive advantage, and creation of investment priorities and resource overflow of the corporation in the most promising areas (Faulkner, Teerikangas and Joseph, 2012).
HP should always be ready to market changes and respond quickly to these changes. The market is actively developing in the direction of propagation and simplification of cloud services. To start work in the cloud is becoming easier, and soon it will reach the level used to at home system – when the initial set-up and start-up takes less time. Customers increasingly want to be able at any time to deploy the necessary infrastructure or connect additional features (instead of calculated and prepared in advance). Accordingly, they do not want to pay in advance, only after starting to use desired functions and features. Therefore, it is important to offer them flexible management of resources and the ability to connect new opportunities to grow.
Business-Level and Corporate-Level Strategies of Credo Technology Group, LLC
Being local company, Credo Technology Group needs the development of its activity. Business strategy of the company is in its vision to create a strong enough firm with the maintenance of its business and inhabited consumers. Preventive protection is company’s narrow direction, which not only keeps its clientele funds on computer services but funds from failure of output. The sphere of computers is already icy and cruel enough; the company believes in returning the human touch, it is people that it cooperates with, after all.
However, in case of being acquired by Agilent Technologies, the company will become its additional component, but with certified and licensed activity and appropriate experience.
Without an effective strategy, an organization cannot create the conditions for financial success in the future, not taking into account today’s markets. The plan should define how the organization can get ahead of the competition, i.e., how to act speedily, bigger and wiser. Without a strategy, any organization will always play secondary roles, adjusting to the actions of competitors and reacting for protective purposes at their initiative.
Credo Technology Group should concentrate its efforts on the corporate culture, which is the crucial driver in the strategy formation. That is crucial in case of acquisition. Understanding how an employee in one company will react to the new strategic initiative in comparison with how it makes the employee in another company, is crucial in the implementation of changes on a global scale. This necessarily means that the joint elements of the strategy should be adapted to the local characteristics of the market at the operational level. Thus, experienced leaders say that culture and approach should work in partnership to achieve success in a balanced and efficient manner.
Hewlett-Packard functions on a very large number of different markets due to the policy of acquisitions, i. e. develops, manufactures on the market and offers a broad range of hardware, software, and integrated solutions that are suitable for all customers, both domestic users and companies ranging from small businesses to large international corporations, and professional market participants, including owners of data centers and cloud infrastructure. HP offers customers not just hardware and software products but finished hardware and software solutions that can solve a broad range of tasks. Also, through a broad variety of equipment and software, HP can offer the client fully operational system, free of compatibility issues, as well as take over its care and support. Many customers choose Hewlett-Packard, precisely because it is easier to work with a single supplier who can quickly and efficiently solve problems.
Credo Technology Group, LLC, is the most confident title in IT solutions and is obtainable to its customers 24/7 to assure its firm’s systems keep on to run efficiently. The company offers distant, on site and urgent IT support and is never excessively remote to resolve any IT issue customers might face. Credo Technology Group, LLC, will always discuss with consumers how to design a computer system that meets their precise requirements. Once customers’ novel system in place it will definitely keep on to work next to the client to assure that his system functions at its best (Credo Technology Group, LLC, 2015).
Agilent Technologies Inc. (2015). 2014 Annual Report. Retrieved from file:///C:/Documents%20and%20Settings/Admin/%D0%9C%D0%BE%D0%B8%20%D0%B4%D0%BE%D0%BA%D1%83%D0%BC%D0%B5%D0%BD%D1%82%D1%8B/Downloads/2014%20Annual%20Report-web%20ready.pdf
Credo Technology Group, LLC. (2015). Retrieved from http://www.credocomputers.com/
Faulkner, D., Teerikangas, S. and Joseph, R. J. (2012). The Handbook of Mergers and Acquisitions. Oxford: Oxford University Press.
Hewlett-Packard (2015). 2014 Annual Report. Retrieved from http://h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/reports/2015/hpq-annual-report-2014.pdf
Hewlett-Packard (2015). Retrieved from http://www.hp.com/country/us/en/uc/welcome.html
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