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Compaq claims Digital merger now resulting in higher sales

The 1998 merger of Digital and Compaq, two of the largest global information technology (IT) companies, was expected to bolster Compaq's already firm grasp of the largest computer hardware and software sales share on the Slovak market.
Instead, disappointing results in 1998 desktop, laptop and server sales cut Compaq's once dominant position on the Slovak market nearly in half with IBM Slovakia dramatically filled the gap. In February, Compaq officials said that the statistics were a reflection of the Slovak economy and insisted that sales would begin to pick up in the near future.
"We are hoping that the acquisition will spur higher revenues than were produced by the formerly independent companies," said Jozef Jurkovič, sales and marketing manager of Compaq Slovakia. "We hope that in this case, one plus one equals three."


Compaq hopes its recent merger will increase computer sales.
photo: Corel Draw Collection

The 1998 merger of Digital and Compaq, two of the largest global information technology (IT) companies, was expected to bolster Compaq's already firm grasp of the largest computer hardware and software sales share on the Slovak market.

Instead, disappointing results in 1998 desktop, laptop and server sales cut Compaq's once dominant position on the Slovak market nearly in half with IBM Slovakia dramatically filled the gap. In February, Compaq officials said that the statistics were a reflection of the Slovak economy and insisted that sales would begin to pick up in the near future.

"We are hoping that the acquisition will spur higher revenues than were produced by the formerly independent companies," said Jozef Jurkovič, sales and marketing manager of Compaq Slovakia. "We hope that in this case, one plus one equals three."

Now, two months later, Compaq Slovakia says thanks to a change in strategy and the introduction of a more customer service-oriented philosophy, the numbers are heading up.

"The numbers have definitely increased during the first quarter of 1999," said Danica Balážová, Compaq Slovakia marketing services manager, although she refused to mention any concrete statistics. "We are a stronger company now with better products. The 1998 numbers were outside-influenced, and they were not easy to explain."

In order to achieve the sales increases, she said, Compaq shifted its targeted customer base to "small to medium-sized businesses", opting not to rely on the traditional focus of the struggling government sector, which has had to cut back many of its projects.

The other factor which pushed up sales was Compaq's new strategy called "Customer Choice", which, according to Balážová, offers prospective clients more options for their computer systems.

"With 'Customer Choice', it is up to the customer how they want to do business with us," she said. "More variations, kinds of products and ways of purchasing them are now available."

Balážová also said that Compaq would like to enter the individual consumer market, adding that in the past their focus has been primarily on businesses and larger projects. "We cannot expect large revenues from this sector, but we would like to at least enter the market," she said.

The changes in strategy in 1999 were not only due to Compaq Slovakia's poor 1998 results, she added. Many were corporate strategy changes not solely designed for Slovakia, although she did ascribe her firm's improved fortunes to their effects.

The long-term forecast of computer companies in general in Slovakia, she said, could not be completely determined by corporate startegies or even by the quality of products offered.

"The economic situation in Slovakia is bad right now. The situation won't change dramatically until the economic situation changes," she said.

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