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Sample Business Slides

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Sample Business Slides

  1. 1. The HP-Compaq Merger: The Battle for the Heart and Soul of a Company
  2. 2. Situation Analysis <ul><li>Hewlett Packard’s CEO, along with the President of the company, the Chairman of the Board and the Chief Operating Officer are all in agreement with an aggressive merger acquisition strategy. </li></ul><ul><ul><li>The problem is that all these company offices are held by the same person. </li></ul></ul><ul><ul><li>What kind of corporate governance issues arise when all this control is in the hands of a single individual, especially when so many stakeholders are involved? </li></ul></ul>
  3. 3. The HP Way <ul><li>Recognize that profit is the best measure of a company’s contribution to society and the ultimate source of corporate strength. </li></ul><ul><li>Continually improve the value of the products and services offered to customers. </li></ul><ul><li>Seek new opportunities for growth but focus efforts on fields in which the company can make a contribution. </li></ul><ul><li>Provide employment opportunities that include the chance to share in the company’s success. </li></ul><ul><li>Maintain an organizational environment that fosters individual motivation, initiative and creativity. </li></ul><ul><li>Demonstrate good citizenship by making contributions to the community. </li></ul><ul><li>Emphasis growth as a requirement for survival. </li></ul>
  4. 4. Background – Hewlett Packard <ul><li>Company founded in 1939 by Bill Hewlett and Dave Packard </li></ul><ul><li>Went public in 1957 </li></ul><ul><li>Founders believed in strong employee participation – The HP Way </li></ul><ul><li>1960’s Company entered computer market </li></ul><ul><li>1990’s Organizational issues surfaced </li></ul><ul><li>Board recommended hiring a more internet savvy CEO </li></ul>
  5. 5. Background – Carly Fiorina <ul><li>Selected from 300 applicants </li></ul><ul><li>Board believed Carly was the savior of HP </li></ul><ul><li>She was to reinvent the company according to the HP Way </li></ul><ul><li>Carly’s motto: “Preserve the best and reinvent the rest” </li></ul>
  6. 6. Background – Compaq <ul><li>Company founded in 1982 </li></ul><ul><li>Acquired Digital Equipment Corp. </li></ul><ul><ul><li>Organizational failure </li></ul></ul><ul><li>Recruited Michael Capella as new CEO </li></ul><ul><li>Carly Fiorina and Michael Capella identified possibility of merging firms </li></ul>
  7. 7. Analysis <ul><li>Corporate Governance </li></ul><ul><li>Combining and integrating operations at HP & Compaq </li></ul><ul><li>Restoring the trust & confidence of stakeholders </li></ul>The Reality: Post-proxy battle, the real challenges now begin!
  8. 8. Challenge #1 – Corporate Governance <ul><li>Carly Fiorina holds too many offices as CEO, COO, and Chairman of the board </li></ul><ul><li>Abuse of power, poor decision-making & miscommunication </li></ul><ul><li>Board unable to fulfill its responsibilities as a management control mechanism </li></ul><ul><li>Stakeholders not being fairly represented </li></ul>
  9. 9. Challenge #2 – Combining & Integrating Operations <ul><li>Resources </li></ul><ul><li>Technology </li></ul><ul><li>Cultures </li></ul>
  10. 10. Challenge #3 – Restoring the Trust & Confidence of Stakeholders <ul><li>All stakeholders have been negatively affected </li></ul><ul><ul><li>Capital Market Stakeholders </li></ul></ul><ul><ul><li>Product Market Stakeholders </li></ul></ul><ul><ul><li>Organizational Stakeholders All stakeholders have been negatively affected </li></ul></ul><ul><li>HP’s reputation of reliability and corporate integrity is in jeopardy </li></ul><ul><li>Stakeholders now lack trust and confidence in HP </li></ul>
  11. 11. SWOT Analysis <ul><li>Strengths: </li></ul><ul><ul><li>Major market share </li></ul></ul><ul><ul><li>Brand name recognition </li></ul></ul><ul><ul><li>HP known for product innovation </li></ul></ul><ul><ul><li>Organizational structure </li></ul></ul><ul><ul><li>HP & Compaq to save $2.5 Billion in operating costs by 2004 </li></ul></ul><ul><ul><li>HP & Compaq combined revenues total $87 Billion </li></ul></ul><ul><ul><li>Increased cash flow after merger complete </li></ul></ul>
  12. 12. SWOT Analysis <ul><li>Weakness: </li></ul><ul><ul><li>IT Market very unstable </li></ul></ul><ul><ul><li>Stock price down and </li></ul></ul><ul><ul><li>fluctuating </li></ul></ul><ul><ul><li>Shareholders losing </li></ul></ul><ul><ul><li>confidence in the company </li></ul></ul><ul><ul><li>Consumers unsure of reliability of new products </li></ul></ul><ul><ul><li>HP’s market share will only increase to 18.3% </li></ul></ul><ul><ul><li>Technology company mergers have many problems </li></ul></ul><ul><ul><li>Little of no revenue growth </li></ul></ul><ul><ul><li>Poor morale among all employees </li></ul></ul>
  13. 13. SWOT Analysis
  14. 14. SWOT Analysis <ul><li>Opportunities: </li></ul><ul><ul><li>Cross selling of products </li></ul></ul><ul><ul><li>HP and Compaq technologies could complement one another </li></ul></ul><ul><ul><li>“ E-Services” large opportunity for growth </li></ul></ul><ul><ul><li>Expansion of services division possible </li></ul></ul><ul><ul><li>Economic upturn in PC/IT market possible </li></ul></ul>
  15. 15. SWOT Analysis <ul><li>Threats: </li></ul><ul><ul><li>Serious outside threat from PC/Printer competitors </li></ul></ul><ul><ul><li>Low stock dividends & Low stock price </li></ul></ul><ul><ul><li>Issues with internal management </li></ul></ul><ul><ul><li>Poor management / employee morale more layoffs </li></ul></ul><ul><ul><li>Threat of new entrants into PC/Printer market high </li></ul></ul><ul><ul><li>Bargaining power of suppliers is high due to only two chips available </li></ul></ul><ul><ul><li>Bargaining power of buyers is high due to products standardized and undifferentiated </li></ul></ul><ul><ul><li>Rivalry within industry is intense </li></ul></ul>
  16. 16. SWOT Analysis
  17. 17. Strategic Alternatives <ul><li>SWOT Analysis </li></ul><ul><ul><li>Possesses many threats </li></ul></ul><ul><ul><li>Possesses many strengths </li></ul></ul><ul><ul><ul><li>Divesture </li></ul></ul></ul><ul><ul><ul><li>Diversification leads to acquisitions that become substitutes for innovation </li></ul></ul></ul><ul><ul><ul><ul><li>Declines in performance result in over-diversification, after which business units are often divested </li></ul></ul></ul></ul><ul><ul><li>Capital invested in a business venture may cause managers to rely on financial constraints rather than strategic controls to evaluate the individual aspects of the business unit’s performance </li></ul></ul>
  18. 18. Recommendations <ul><li>Improve Communication with Stakeholders </li></ul><ul><li>Restructure Corporate Governance </li></ul><ul><li>Integration of Compaq and HP </li></ul><ul><li>Create Value and Restore Trust </li></ul>
  19. 19. Recommendations <ul><li>Improve Communication with Stakeholders </li></ul><ul><ul><li>Board of Directors </li></ul></ul><ul><ul><ul><li>Develop plan that monitors decision making process </li></ul></ul></ul><ul><li>Shareholders </li></ul><ul><ul><li>Better analyze the investment strategies of the shareholders </li></ul></ul><ul><ul><li>Merger progress updates </li></ul></ul><ul><li>Employees </li></ul><ul><ul><li>Get them involved </li></ul></ul><ul><ul><li>Plan for employee suggestions and concerns </li></ul></ul><ul><ul><li>Apology from Carly </li></ul></ul><ul><li>Customers </li></ul><ul><ul><li>Integration progress reports </li></ul></ul><ul><ul><li>Explanation detailing the added value from the merger </li></ul></ul>
  20. 20. Recommendations <ul><li>Restructure Corporate Governance </li></ul><ul><ul><li>Strategic planning and decision making </li></ul></ul><ul><ul><li>Reduce Carly’s responsibilities </li></ul></ul><ul><ul><li>Assign a new Chairman </li></ul></ul><ul><ul><li>Add a Chief Operating Officer </li></ul></ul>
  21. 21. Recommendations <ul><li>Integration of Compaq and HP </li></ul><ul><ul><li>Corporate cultures </li></ul></ul><ul><ul><li>Cross-training </li></ul></ul><ul><ul><li>Plan for employee suggestions and concerns </li></ul></ul>
  22. 22. Recommendations <ul><li>Create Value </li></ul><ul><ul><li>Merger’s expected outcomes </li></ul></ul><ul><ul><ul><li>More balanced portfolio </li></ul></ul></ul><ul><ul><ul><li>Doubled customer service team </li></ul></ul></ul><ul><ul><ul><ul><li>Improved profitability in key areas </li></ul></ul></ul></ul><ul><ul><ul><li>Increased operating margins </li></ul></ul></ul><ul><li>Restore Trust </li></ul><ul><ul><li>All of the recommendations above lead to the restoration of trust by the stakeholders </li></ul></ul><ul><ul><li>Improved shareholder confidence will show that the plan is working </li></ul></ul>
  23. 23. Questions? <ul><li>The HP Way </li></ul><ul><ul><li>Recognize that profit is the best measure of a company’s contribution to society and the ultimate source of corporate strength. </li></ul></ul><ul><ul><li>Continually improve the value of the products and services offered to customers. </li></ul></ul><ul><ul><li>Seek new opportunities for growth but focus efforts on fields in which the company can make a contribution. </li></ul></ul><ul><ul><li>Provide employment opportunities that include the chance to share in the company’s success. </li></ul></ul><ul><ul><li>Maintain an organizational environment that fosters individual motivation, initiative and creativity. </li></ul></ul><ul><ul><li>Demonstrate good citizenship by making contributions to the community. </li></ul></ul><ul><ul><li>Emphasis growth as a requirement for survival. </li></ul></ul>

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