Case | HBS Case Collection | April 1998

Compaq, 1998

by Steven C. Wheelwright and Matt Verlinden

Abstract

In 1997, Compaq Computer Corp. had become a $25 billion powerhouse. It had accomplished its revenue growth projections, successfully made a number of strategic acquisitions, and increased its gross margins, principally by moving up market into servers, workstations, and networking gear. At the same time, there were a number of strategic challenges facing Compaq in 1998. Compaq seemed to be squeezed by apparently contrary impluses--the need to reduce inventory while also satisfying its distribution channel; the need to build-to-order while also taking on product lines added through acquisition; the need to both fulfill PC orders from a hand-holding position constituency while moving clientele to articulate specifically what it wanted. Managing expectations, increasing margins, making operations more efficient, expanding the product line, and changing distribution: This was a tall order.

Keywords: Mergers and Acquisitions; Transformation; Customer Relationship Management; Profit; Revenue; Growth and Development Strategy; Brands and Branding; Distribution Channels; Alliances; Customization and Personalization; Computer Industry;

Citation:

Wheelwright, Steven C., and Matt Verlinden. "Compaq, 1998." Harvard Business School Case 698-094, April 1998.