HP/PwC Power Point Presentation


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HP/PwC Power Point Presentation

  1. 1. Hewlett Packard’s Acquisition of PricewaterhouseCoopers Consulting Firm Presented by: Team 1 HP Strategic Acquisition Committee Julie Dickman Valerie Kimball Michael Morrison Gregory Sostaric
  2. 2. Hewlett Packard Objective • Provide global consulting services to clients • Create a “total customer experience” • Maintain market competitiveness and increase profit growth
  3. 3. Key Factors • Competitors • Carly’s goal • Alternatives • SEC filings
  4. 4. Proposal The purchase of PricewaterhouseCoopers consulting firm for $18 billion in cash and stocks.
  5. 5. PwC Background • World’s largest professional service firm • 31,500 consultants in 152 countries • Revenues of $7.48 billion in 1999 - Sustained annual growth rates of more than 20%
  6. 6. Criteria for Acquisition • Cultural Fit • Shared Strategic Vision • Complementary customer mix • Leadership in e-space • Global Footprint
  7. 7. Cultural Fit Hewlett Packard Culture PricewaterhouseCoopers Culture •Devotedto research and •Devoted to development of the development consulting services market •Encourages Innovation •Creative and Imaginative •Informal “Management by •Informal, social and relaxed Wandering Around” policy business atmosphere •Teamwork is stressed •Teamwork is stressed
  8. 8. Shared Strategic Vision Hewlett Packard Vision PricewaterhouseCoopers Vision •Implement a “total customer •Move beyond the reach experience” by: of competitors •Developing next generation •Focus on delivering high-end appliances, creating e-service strategic consulting in the areas ecosystems and placing HP at of business transformation and the center IT consulting
  9. 9. Complementary Customer Mix Hewlett Packard Customers PricewaterhouseCoopers Customers •Targets large global •Targets large global enterprises enterprises •Topcustomers include: MCI •TopCustomers include: WorldCom, CIBC, Trust Bank Adaptec, Gillette, Motorola, Microsoft, Oracle
  10. 10. Leadership in e-space Hewlett Packard Leadership PricewaterhouseCoopers Leadership •HPis known as a leader in the •PwC has established itself as computer hardware industry the leading technology consultancy
  11. 11. Global Footprint Hewlett Packard Global PricewaterhouseCoopers Global Footprint Footprint •HP’sglobal sales account for •PwC is located in 152 countries more than half of revenues with 31,500 international consultants. •HPis the largest consumer IT •World’s largest professional company in the world. service firm
  12. 12. Benefits of the Acquisition • Strengthen the linkage between business process transformation and technology implementation • Increase “total customer experience” • Catapult HP consulting into the Big Five consulting firms
  13. 13. Risks of the Acquisition • Consultants could be characterized as “salesman” for HP products • 2/3 of PwC consultants could leave • Risk of losing $18 billion
  14. 14. Financial Feasibility • HP has an average of $3.4 billion in Cash Flows from Operating Activities • HP Net Revenue for 1999 was $42 billion up from $39 billion in 1998 • PwC consulting had revenues of $7.4 billion in 1999
  15. 15. Legal Considerations • Sherman Act - Sections 1 and 2 • Clayton Act - Sections 3 and 7
  16. 16. Recommendation • Integrate HP and PwC consulting firms, keeping them a separate division of HP • Consulting firm will have a direct link with hardware department while remaining independent • Consulting firm will have a separate administration that has the power to make decisions outside HP corporate jurisdiction
  17. 17. “Keeping up with the rapid changes in technology requires bold moves. Pulling such a deal together will be tough-though no tougher than falling behind rivals without it.” -David Rocks, 2000
  18. 18. Questions