Compaq, a company that specializes in computer hardware and other equipment, is headquartered in Texas, USA. The company which was established in the year 1982 was taken over by the computer giant Hewlett Packard in the year 2002. Compaq develops its own laptops, computers, tablets, printers, displays and other accessories.
A brand that has been able to create a positive image for itself in the market, Compaq also has a lot of corporate as well as individual clients. The company has registered an annual turnover of 10.5 billion USD but the growth has staggered in the last few years and the market is on a downswing.
One of the biggest reason for this is the ongoing price wars between the leading hardware makers with each trying to counter the other through drastic price cuts. Some of their flagship brands include Compaq Deskpro, Compaq System Pro, and Compaq Portable.
Strengths in the SWOT analysis of Compaq :
Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Compaq:
- Background in computers: Compaq has many years of association with computer manufacturing and thus is a brand with a strong background of expertise. The founders who were both from Texas Instruments came in with a lot of expertise in the sector.
- Strong Leadership: Compaq even during the worst of its crises has always benefitted from the right decisions. This is because they have always had strong leaders who are experts in their domain of work and well informed.
- Prompt Service: Compaq has always been credited with good after-sales service. All that you need to do is to call up their customer service desk and they can either route you to the nearest service center or offer you home service.
- Printer Business: Though in other areas like laptops and desktops, Compaq faces a lot of pressure from competitors like Dell and IBM it is still very much the market leader in printers. This is one of its biggest strengths.
Weaknesses in the SWOT analysis of Compaq :
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Compaq are:
- Compaq –HP takeover: The takeover which was done at a whopping price tag of USD 22 billion faced the brunt of critics and stakeholders alike and has affected the market valuation and share prices of the company drastically.
- Too many overlaps: Compaq primarily has the same kind of products which even look and feel the same though they try to differentiate it from features. The lack of differentiation for products creates an impression that the product lines of the company overlap.
- Poor moral code: Compaq, especially during the takeover, has been criticised for its lack of ethics. It is alleged that there have been a lot of behind the scene unethical practices associated with the merger. Even during the peak of its existence, Compaq has undertaken various unethical steps to beat its rival Dell.
- Poor regard for good leaders: Compaq also has scant regard for performers and was under criticism for firing its CEO without a second thought in spite of the fact that he had taken many critical decisions and bailed the company out of tight spots in many situations.
Opportunities in the SWOT analysis of Compaq :
- Growth in technology: The technology changes are putting in place the need for new products in domains like VoIP and cloud-based communication services. Other new technologies like the Internet of Things and interconnected devices are also creating new avenues for hardware.
- Consolidation in the industry: The computer peripherals sector is going through a wide gamut of changes and in the process, there are numerous mergers and acquisitions. This creates a whole new set of opportunities both in terms of sharing of knowledge and also for scalability of operations.
- Connected devices: The possibility of cities migrating to smart cities and the emergence of connected devices will present a new need for hardware and other devices. There will also be an increase in demand for new devices as more interconnected networks are put in place.
Threats in the SWOT analysis of Compaq :
Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:
- Competition: The company has always faced a serious threat from Dell and has invested a lot of effort in price wars with the company. However, it has never really been able to match the prices of Dell primarily because the company has been using direct selling strategy.
- Dip in demand: With the growth in the demand for smartphones and tablet PC’s the overall demand for laptops and desktops which are the main product offerings of the company has gone down. This will invariably become a threat.