Hp and Compaq merger - Research Paper Example

From this view, the successful technology company, rather than regarding its surroundings as fairly stable and internal mechanisms as being of utmost importance, reacts in a converse manner, focusing outwards and embracing change and letting technology lead the way in terms of change. Or, alternatively, the company could also be pulled along by technology rather than being the one doing the pushing. In this type of situation, “Marketing oriented managers can direct scientists into what appear to be exciting markets with assured high demand.

This is often called demand pull. Here innovation, the need, is father to or mother to the new invention” (Burgelman et al., 683). Overall, the HP Compaq merger case seems to show technology pull or demand pull, because it was in fact the popularity of the increasing computer hardware/software manufacturing technology that was pulling the merger into innovation. This is a very dynamic industry, in which variables of competition would favor a merger between two large pre-existing players, rather than a new entrant.

There are many reasons for this, chief among them the extreme costs of entering this saturated market. In the face of competition, Compaq/HP as a merged company has been struggling to capture the market dominance that it needs to survive in this competitive and dynamic type of industry. “Now the two consulting firms mostly agree that HP has a firm lead. IDC published statistics on Jan. 17 showing that Palo Alto-based HP had 18.1% market share during the three months ended December, while Round Rock (Tex.)-based Dell had only 14.7%. By Gartners count HP had 17.

4% market share and Dell takes second place with 13.9%” (Ryst, 2007). Although the merged company is still strong in the market generally, it cannot really afford to keep slipping. Solving this problem means realizing how economics plays a large role in the external environment of HP/Compaq’s market, particularly the PC