Eckhard Pfeiffer and Compaq (Condensed)
21 Pages Posted: 16 Jun 2009
Abstract
In early 1997, Compaq, the world's largest supplier of personal computers (PCs), faced a growing challenge from direct-marketing rival Dell Computers. This challenge raised two important questions for Compaq CEO Eckhard Pfeiffer. First, should Compaq attack Dell directly by expanding sales through direct marketing channels: Second, should Pfeiffer attempt to improve channel support for Compaq products by launching a joint-manufacturing program with leading distributors?
Excerpt
UVA-M-0605
ECKHARD PFEIFFER AND COMPAQ (CONDENSED)
In early 1997, Compaq, the world's largest supplier of personal computers (PCs), faced a growing challenge from direct-marketing rival Dell Computers. This challenge raised two important questions for Compaq CEO Eckhard Pfeiffer. First, should Compaq attack Dell directly by expanding sales through direct-marketing channels? Second, should Pfeiffer attempt to improve channel support for Compaq products by launching a joint-manufacturing program with leading distributors?
The Canion Era
In February 1982, less than one year after IBM launched the first PC, three former engineers from Texas Instruments—Rod Canion, William Murto, and James Harris—sketched out the design for the first Compaq PC on the back of a placemat in a Houston pie shop. With the help of venture capitalist Ben Rosen, Canion and his colleagues raised $ 10 million in venture capital. In early 1983, they began shipping the Compaq Portable, the “first significant IBM-compatible portable system.” First-year revenues exceeded $ 111 million, a U.S. business record. In December 1983, Compaq introduced a hard-drive version of the Compaq Portable. Over the next two years, the company launched two desktop lines under the Deskpro brand, one featuring the Intel 8082 chip (introduced in 1984) and a second featuring the 80286 chip (introduced in 1985). The following year, Compaq “captured the limelight by unveiling the industry's first 80386-based personal computer, beating IBM to the punch by months.”
Under the leadership of CEO Rod Canion, Compaq was “best known for its ability to quickly utilize new technology and ship leading-edge products.” In 1989, Canion said:
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Keywords: internet marketing, channel strategy
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