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Enviromental Threat and Opportunity profile (ETOP) for the new HP/Compaq
identifies a very high score of 367. This scoring is based on of the 3
individuals drafting this case study. The Threat value is based on the product
of Impact X Importance. The high score is due primarily to the merger of both
companies. There are political issues arising due to the agressiveness of the
merger. The Social threat is rated high due to an employee morale issue within
the company due to the number of layoffs that have occurred. The Competitive
nature of the hi-tech industry and technological changes also strongly impact
the new HP.
As indicated in this ETOP, the new HP is 

 due to
Economic, Social, Technological a  
 
The world¶s largest corporate Information Technology
merger began in September 2001 when HP announced
that they would acquire Compaq in an all
stock purchase valued at $25 billion. Over an 8 month
period ending in May 2002, the merger passed
shareholder and regulatory approval with the end result
being one company. The new HP has annual sales of
approximately $90 billion which is comparable to IBM,
and an operating incom e of almost $4 billion.
The merger was led by Carly Fiorina, the chairwoman
and CEO of HP. The president of the new HP was
Michael Capellas who was the former chairman and
CEO of the old HPand who has recently resigned and is
now the CEO of World Com.
Overall, many analysts were critical of the merger from
the beginning since both Compaqnd Competitive
threats.‘