Compaq
. Strategic Profile and Case Analysis Purpose
During the 1980s 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 Compaqs premium prices was no longer necessary. Hardware and software advances where taking away some of the importance of the expensive features that Compaqs products offered. In addition, a declining economic environment was making even the larger of Compaqs 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 organizations culture was suffering from a lack of communication between divisions as
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