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HP Compaq merger—valuation

Abstract

In the late 1990s, the computer hardware industry was characterized by extreme competition between the top players, namely IBM, Dell, Compaq, and HP. It witnessed frequent product introductions and improvements in respect of product pricing and features arising due to changing customer requirements and transforming economics of the IT industry. Thus, in light of the radically changing industry, the participants had to equip quickly and profitably to the dynamics to sustain the market pressures. IBM and Dell performed well by following different strategies. Dell’s ability to turnover inventory at a much faster rate dramatically changed the cost structure necessary to survive in the PC-making industry. While ...

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