Articlesbrand

Compaq.. The Story of Major Brand Collapse in Personal Computing Field


“Compaq” is an example of the collapse of the foundations that refuse to interact with the successive updates in the world of technology through presenting distinct innovations that attract both the mind and eyes of clients, rather it kept depending on the same strategy since foundation and failed to comply with its competitors in terms of technical growth speed and offering competitive prices. Accordingly, the company ended up as a part of “HP,” its major competitor back then, which led to the gradual disappearance of its brand.

Compaq’s started with the meeting of three American friends, Canyon, Rozien and Hares in in the year of 1982 on the idea of founding a computers’ production foundation the state of Texas. Actually, this being came to light and was called Compaq. In a few years, this company became a major international supplier of PCS and achieved massive sells, especially in terms of operation programs.

With its quality products that had an elegant design and innovative technological features, the company managed to vanquish the American Blue Giant ABM. Its annual benefits for 1990 reached about 3.6 billion dollars.

Compaq Registers about 10.5 Billion Dollars as Annual Benefits

What supported it in the market was its acquisition of Tedmon Computers Company in 1977, which was established by former employees at HP. In the next year, it also managed to include Digital Equipment Corporation.

Compaq expanded through a series of varied innovative technological products that received a massive demand from consumers, such as digital cameras, printers, calculators, scanners, servers, digital personal assistant tools. It registered annual benefits of 10.5 billion dollars.

It is important to mention the company’s unique marketing experience, for it actually utilized all types of publicity tools, traditional and internet-based ones, to market its products and to focus on its points of strength. In addition to this, it was keen to build clients’ loyalty, so it developed means to reach and win them. It started its own website, run by an integral efficient team. The team itself was later on supported by HP. 

Compaq won over the 24th rank among the most successful brands around the world and became responsible for producing about 20% of computers in the United States of America, in addition to its spread in more than 40 countries, in the markets of which it vanquished many competitors in the electronics field.

To Overcome Its, Failure Compaq Dismissed 7% of its Employees

Compaq’s started to fail when it could not comply with the latest updates in the field of technology, for since its launch, the company’s focus was on quality with a disregard to suitable prices. This strategy brought it good results at the beginning, a thing that was very convenient for the period itself because the clients were glad about the products’ quality and their smooth usage, especially that they could not find less costly alternatives.

But with the competition going intense and the computers turning into necessary products, many companies invaded the market. Such as: Dell, Lenovo, Toshiba and Acer, according to which the clients’ interest shifted to combining quality with the suitable price. However, Compaq showed no interest in changing its old strategy turning a blind eye to the market’s changes.  The result was an acute decline in its sells that was countered by the success of its competitors, who managed to take its market’s shares and to attract more consumers with new features and discounts.

 Finally, it was forced to dismiss 5 thousand employees, more than 7% of its staff around the world.

With the last century’s end, its financial crisis intensified and its ranking among the major 500 companies at the level of the world retracted until it left the whole list.

Compaq and HP Integration for 25 Billion Dollars

In 2002, the company accepted to integrate with the giant Hewlett-Packard-HP in return for 25 billion US dollars. The name of the new entity in the stock market became HPQ, which joins the symbols of the two companies in a reference to their integration. As for the independent Compaq brand, it has disappeared since then.

The first policies that HP followed was boosting the total sells, so it decreased the production cost of Compaq’s manufacturing processes and transferred it to less costly countries in terms of labor, such as Slovakia which specialized in manufacturing products for Spanish speaking markets, Bulgaria for those who spoke German, Costa Rica for English speakers and Chania for Arabic speaking markets.

The company achieved a marked success in relation to the number of clients which exceeded the billion in in 162 countries around the world and became the world’s major supplier of computer products, solutions and services in the field of technological information. In 2013, Hewlett-Packard announced its intention to gradually eliminate the HPQ brand and that Compaq would be used only for the company’s less costly products such as Compaq Elite 8300 desktop and Compaq Pro 4300 personal computer.

Between DELL and AMB…Compaq Is in Ferocious Competition

Prior to its integration with HP, Compaq was in a furious competition with scary pols, DELL and AMB. The first was and still focuses on the manufacture of personal computers according to the clients’ desired features and with relatively low prices because in resorts to direct marketing. The second is the giant of technology which keeps expanding in the world of computer programs, in addition to producing singular types of computers. It is famous for high quality technology and extravagance. 

Compaq alone kept joining between high technology and costs which caused it to lose the competition and gave its market shares to other companies, until it finally accepted to integrate with HP. The integration was the beginning of its brand’s disappearance, which no more had an international value, but rather became twins with HP less costly products. 

Compaq
Market Value: The price of a single share was 35.21 dollars in August 2001.  
The Number of Its Employees around the World: 71428 employees to 2001.
The Number of the Countries in Which It Functions: Its products are sold in 200 countries through direct marketing and authenticated partners. 
Monetary Results: Its loss in the fourth quarter of 2001 reached about 2.1 billion dollars.
Show More
Close
Close