Product Life Cycle
Compaq notebooks
1.0 INTRODUCTION
Compaq Computer, based in Houston, Texas, is the world’s largest personal computer manufacturer and the fourth largest information technology (IT) company. From 1992-1997, the company’s aggressive high volume PC strategy propelled it to high growth rates in revenues, while its leadership in PC servers sustained strong margins and drove profit growth.
Starting in 1995, former CEO Eckhard Pfieffer began to transform Compaq from a pure PC company to a full-service IT company, with the goal of becoming a $50 billion company that could compete with the likes of IBM and Hewlett-Packard. The key strategic moves were the acquisitions of Tandem Computer and Digital Equipment Corporation in 1997 and 1998, giving Compaq a diverse line of technologies and service capabilities. Compaq began revamping its information systems in 1994, building global enterprise information systems to support its globally optimized manufacturing and order fulfillment operations. The systems were built primarily around SAP applications, running on Compaq PC servers and the Windows NT operating system in order to demonstrate that large enterprise systems could run on Compaq hardware. Compaq’s IT people were forced to distribute the SAP applications across ten interconnected sites around the world and customize extensively in order to run on Windows NT and meet Compaq’s needs.
Compaq stumbled badly in 1998 as it faced new challenges in the PC market and tried to assimilate Tandem and Digital. In particular, Compaq struggled to catch up with Dell Computer, whose direct sales; build-to-order model gave it a big advantage in cost and speed over Compaq’s indirect sales, build-to-forecast approach. When the company disappointed investors with poor results in 1999, the board removed Pfieffer, who had been credited for Compaq’s previously stellar performance. Since Pfieffer’s departure, Compaq has reorganized itself along business lines, streamlined its
1.0 INTRODUCTION
Compaq Computer, based in Houston, Texas, is the world’s largest personal computer manufacturer and the fourth largest information technology (IT) company. From 1992-1997, the company’s aggressive high volume PC strategy propelled it to high growth rates in revenues, while its leadership in PC servers sustained strong margins and drove profit growth.
Starting in 1995, former CEO Eckhard Pfieffer began to transform Compaq from a pure PC company to a full-service IT company, with the goal of becoming a $50 billion company that could compete with the likes of IBM and Hewlett-Packard. The key strategic moves were the acquisitions of Tandem Computer and Digital Equipment Corporation in 1997 and 1998, giving Compaq a diverse line of technologies and service capabilities. Compaq began revamping its information systems in 1994, building global enterprise information systems to support its globally optimized manufacturing and order fulfillment operations. The systems were built primarily around SAP applications, running on Compaq PC servers and the Windows NT operating system in order to demonstrate that large enterprise systems could run on Compaq hardware. Compaq’s IT people were forced to distribute the SAP applications across ten interconnected sites around the world and customize extensively in order to run on Windows NT and meet Compaq’s needs.
Compaq stumbled badly in 1998 as it faced new challenges in the PC market and tried to assimilate Tandem and Digital. In particular, Compaq struggled to catch up with Dell Computer, whose direct sales; build-to-order model gave it a big advantage in cost and speed over Compaq’s indirect sales, build-to-forecast approach. When the company disappointed investors with poor results in 1999, the board removed Pfieffer, who had been credited for Compaq’s previously stellar performance. Since Pfieffer’s departure, Compaq has reorganized itself along business lines, streamlined its