Compaq

7 Pages 1854 Words

. Strategic Profile and Case Analysis Purpose

During the 1980's Compaq Computer Company was a leader in the computer hardware industry. Its name became synonymous with cutting edge, high quality, products that sold for a premium. This premium price for its products allowed Compaq to outspend most of its competitors on research and development (R&D).

As technology and the marketplace changed, Compaq lost its ability to charge a premium price for its products. Consumers, who were quickly becoming computer literate, were realizing that paying Compaq's premium prices was no longer necessary. Hardware and software advances where taking away some of the importance of the expensive features that Compaq's products offered. In addition, a declining economic environment was making even the larger of Compaq's end-users looking for ways to cut their growing computer budgets. Facing its third major crisis in a decade, Compaq was looking like it would become another Texas corporate statistic if it did not do something to reverse the downward trend of its sales.

The company was also showing signs of organizational problems that may have been overlooked previously because of its remarkable sales growth. The organization's culture was suffering from a lack of communication between divisions as well as a growing riff between even the company's founders. The company was in two camps struggling for control of the its destiny.

II. Situation Analysis
A. General Environmental Analysis (socially, economically, globally, demographic, legal...)
The United States is a leader in the computer hardware industry. While the Japanese are a large producers of electronic components, U.S. companies are still among the leaders in high technology. Sony Corporation is fast catching, especially in the area of miniaturizing technology. The Walkman is one example of the Sony's ability to make a bulky product smaller.

One potentially big problem for U.S. ...