Hp And Dell Merger Analysis

IB Business and Management SL

Question: Should HP and Dell merge into one company?

Karim Hoehn

Ms Guest

Word Count:

Table of Contents

Introduction: 3

SWOT: 4

Analysis: 5

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Introduction:

Dell Inc. is an American privately owned multinational computer Technology Company that is located in Round Rock, Texas, United States. Dell is very well-known for selling, repairing, and supporting computers and related products and services. Dell incorporation is named after the founder, Michael Dell. The company is one of the largest technological corporations in the world this is due to that Dell is employing more than 103,300 people worldwide. Dell sells a huge variety of products, these include; PC’s, data storages, network

HP is also one of the major providers of service network products. Both Dell and HP have a significant market reach all over the world in nearly all of the markets it operates. HP was amongst the top 15 most valuable brands in the world, as its brand name is valued at $26 billion, while Dell is at $7.5 billion. The connection between these two companies enables many opportunities to be created, this is due the fact that Dell would most likely want to be associated with a company such as HP Inc. which is carrying a strong reputation for quality and innovation features and products. Another strength aspect would be the diversified product portfolio, newly thoughts and concepts would be merged by both companies in order to create better and more attractive products, this allows the creation of newer and stronger products to be made, which results the competitiveness to increase as well as applying pressure onto different similar companies. Additionally, using the contribution of HP’s concept by allowing the customization of PCs, brings both companies to be functioning in a whole new level, differentiation of different products are more exclusive and allows a much more range of different varieties of specs from HP and Dell combined. Another strength are both companies would increase their revenue pool, this allows more markets to be placed

Both companies rely heavily on the sales of PC, especially laptops. The vast market of laptops results in continual changes and alters made within every company that sells laptops too, therefore dell and HP are required to strive for newer ideas and better solutions to surpass its competitors. Relating to this, Dell spent a much lower percentage on Research and Development from its total income, while their main competitors are on the opposite side, this resulted Dell to fall back in opportunities that allow the development of stronger products and newer products to be made as well as to also introduce newer products. Due to a low amount of income spent on R&D, this also resulted in a poor portfolio when it comes to the selling of tablets and smartphones. Dell and HP Inc. are very well known for its online retail service, as it is known that it is more conservative and saves money to sell products online and ensures the activity of the product customization but online services lacks less visibility of the actual product, therefore this can result for the customer to be unsure of the chosen product and could easily decline the offer due to lack of