Compaq Expands Consumer Market Reach with Sears Partnership

Strategic Insights -

Compaq Computer Corporation has formed a significant partnership with Sears, Roebuck & Company to sell its personal computers, marking a major step in expanding its penetration of the consumer market. Sears, the nation's second-largest retail chain, will start selling Compaq's Contura Aero notebook PCs, and later add other Compaq models, in a bid to bolster its Sears Brand Central aisles. This strategic move enables Compaq to reach a wider audience, building on its leading market share of 13.4 percent in the United States. "Compaq just wants the distribution wherever it can get it, and Sears is a very good way of doing that," said Michael Carmen, a technology analyst with the State Street Research and Management Corporation.

Key Takeaways:

  • Compaq has partnered with Sears, Roebuck & Company to sell its personal computers, aiming to broaden its market share in the consumer segment.
  • Sears, the nation's second-largest retail chain, will start selling Compaq's Contura Aero notebook PCs, with plans to add other Compaq models later.
  • This partnership marks a significant step for Compaq, which now has the largest market share of any personal computer maker, with a global presence through more than 31,000 outlets.
  • Compaq has cut prices across a wide range of products by 11 percent to 22 percent, setting the stage for a personal computer price war.
  • Compaq's vice president for consumer products, Michael Norris, expects the partnership to reach the entire US market, while Sears' computer buyer, Dan Pigatto, sees an opportunity to capitalize on the growing home computer market.
  • Compaq's Presario desktop line, its flagship personal computer for the home market, will also be sold through Sears.
  • Compaq and Microsoft will place warning labels on keyboard products to avoid hand and wrist injuries, a growing concern for the PC industry.

Statistics:

  • Compaq's market share in the US is 13.4 percent.
  • Compaq has a global presence through more than 31,000 outlets.
  • Compaq cut prices across a wide range of products by 11 percent to 22 percent.
  • Sears sells personal computers in 91 percent of its 799 stores in the United States.

Sources:

  • "Compaq unit sales to Sears, Roebuck as new retail partner." (Source: CBS News, October 2, 1995)
  • "Compaq Lowering Prices to Boost Sales." (Source: Information Week, August 28, 1995)
  • "Microsoft's New Warning Label Aims to Prevent Hand Injuries." (Source: CNET News, August 31, 1995)