It's about execution. Compaq simply implemented the four principles of marketing -- product, price, place, promotion -- more adroitly than any rival.
Compaq restaged the home PC market in February 1997 with the introduction of Presario PC models below $1,000, taking a disciplined consumer-electronics approach built on delivering product, price and brand that met the needs of retailers and consumers.
"We execute quick product cycles to offer the latest technology in time for the key selling seasons, and we react immediately to any market shift," says Rod Schrock, Compaq's VP-group general manager of consumer products. "To survive and thrive in this business, you have to aggressively plan for and lead change, and build an organization that reacts faster than the competition."
"Compaq really came out aggressively at the low-end market, and people found out they could buy a Mercedes for the price of a Volkswagen," says Matt Sargent, analyst with researcher ZD Market Intelligence.
With its hot-selling Presario, Compaq displaced Packard Bell NEC's Packard Bell as the leading retail brand in June 1997. Compaq has held the top slot ever since, Mr. Sargent says.
Compaq, the No. 1 global PC seller since 1994 based on strong business sales, managed to make Presario the top retail PC less than four years after it entered the rough-and-tumble home market.
Mr. Schrock, 39, an 11-year Compaq veteran, leads a team that's proven expert at continually refreshing Presario, providing consumers an appealing package of product specs on a great brand at a great price. The result: Presario generated more than $4 billion in revenues for Compaq last year.
Though Compaq this year is trying to build interest in higher-priced models, Compaq must constantly react to keep ahead in the battle for high-volume, lowest-cost models.
Compaq "started the price war, and it's only going to get worse from here," says Mr. Sargent.
That's not necessarily bad for Compaq. Based on execution and agility, Compaq has shown it can win the battle at home.