Case Name :      Compaq Computer Corp.: The Dell Challenge

Authors :           Adrian B. Ryans, Mark Vandenbosch

Source :             Ivey Publishing

Case ID :            900A09

Discipline :        Strategy

Case Length :    25 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

The new CEO of Compaq Computer, the world’s second largest computer company, is facing some difficult decisions about how to combat the increasing threat posed by Dell Computer Corp. This case describes the strategic moves made by Compaq in the late 1990s under the leadership of a previous CEO who was dismissed by Compaq’s board earlier in the year. Also describes the history of Dell Computer and the evolution of the Dell Direct model. Compaq’s new CEO faces some major issues, one of which is the resolution of the channel issues, particularly in the commercial personal computing segment. It is clear he faces some very tough strategic and marketing choices. The power of information technology and standards that have allowed Dell to build a powerful ecosystem with its customers, suppliers, and complementers are illustrated. With the support of these other players, Dell has been able to topple one of the great companies of the late 20th century from its leadership position. Also illustrates how difficult it is for a market leader to respond effectively to such a challenge.