The Success of Gateway Computer
Gateway 2000 was formed by Ted Waitt(CEO), in September 1985, in Sioux City, Iowa. The company was founded along with Senior Vice president Mike Hammond. In 1990, as the company began to blossom it was moved to its current location in North Sioux City, South Dakota. They formed Gateway 2000 with one goal in mind- to offer PC buyers a logical alternative to high markups, limited choices and inadequate support, common in the retail PC market (Gateway.com 1). These two partners started selling hardware and software to people who owned Texas Instrument computers. The placed ads in computer related publications, selling to the end user. These two guys were the pioneers of direct-marketing in the PC industry.
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This idea gave Gateway a tremendous push forward into the computer industry. In 1987 the company reported revenues of 1.5 million dollars, later in 1989, it jumped to an astounding 70.6 million dollars. Finally, in 1996, they jumping into the billions with 5.04 billion dollars. In 1993, Gateway became a traded company in the NASDAQ market system under the symbol GATE. Making improvement along the way they moved to the New York Stock Exchange on May 22, 1997 and uses the symbol GTW. On June 16, 1997 the stock split.
Gateway 2000 is a leading global marketer of personal computers. Although they are a leader in global marketing they have a problem with their laptop division. the laptop division holds one of the lowest market shares in the market. Toshiba the leader in market share holds 21.2 percent of the market, Compaq holding 15.7, IBM with 12.4, Dell with 6.1, Acer with 5.0, Packard Bell with 4.4, Fujitsu with 3.4, Hitachi with 3.3, Micron with 3.2, and finally Gateway with 2.8 percent. With Gateways new and improved marketing plan, they should increase to the top over the next five
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Also, deal packages such as a laptop- printer combo would help to boost sales. Gateway used television advertising to get their name out into the publics mind. Gateway laptops are not easy to find and locate in many retail locations. If the company put more money into pushing their product into these location sales would definitely go up. Toshiba, the leader in laptop sales has distributed their product very well and this might be a reason why they hold the highest position. Gateway needs to put more of its laptops into chain technology stores such as circuit city. This will get the idea out that you do not have to be computer minded to own a Gateway
1. How and why did the personal computer industry come to have such low average profitability?
First, we will analyze the targeted customer and the proposition designed by each company to attract them. In this part, there is a description of each market target and how each company has taken advantage of each unique position in the industry.
The William H. Gates foundation was started in 1994 and was operated by Bill’s dad. Paul came back to Microsoft and Bill and Paul donated to their old school, Lakeside private school. They created a auditorium in the school named after their old friend, Kent Evans. In 1995, Microsoft started adding the internet to their future plans. They created a web browser called Internet Explorer and launched a network for the internet called MSN. Along with this, Windows 95 was also released that same year.
The company was focus more on different aspect from their competitors. In 1996, the company introduces its own laptop model and while competitors focused on providing new technologies for the business market, Legend designed desktops that the average Chinese consumer could use. The company soon became China’s PC market leader (21.5% share) and well known throughout the Asia-Pacific region in 1999.
In 1987, PC's Limited set up its first on-site-service programs in order to compensate for the lack of local retailers prepared to act as service centers. Also, the company set up its first operations in the United Kingdom; eleven more international operations followed within the next four years. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its initial public offering of 3.
The Internet was growing at an outstanding pace and many people believed that it was going to affect every business. However, Gates dismissed the Internet and Netscape as unimportant, saying that they would have no impact on him. He quickly found out how wrong he was and how these new threats in the environment were going to affect his business, and he managed to find the way for converting this threat into an opportunity. Thus, he changed the direction of his strategy and he entered into a new business: the Internet world. He realized that he was missing out an opportunity in the market that could make his company grow in a huge way; so he adopted a follower strategy, which is very ironic knowing that they have always been the leaders. He strategically fit-in by matching his resources and strengths (capital, know-how and people) to the changing environment. As Netscape was ahead he needed to act quickly before it was too late, so he took advantage of his power as a leader and focused on regaining position over Netscape by adding the browser as an integral part of Windows, giving free copies to the public and forcing manufacturers to install the browser on the machine. In other words, he used his best existing resource which was Microsoft Windows as part of the strategy and used his monopoly to stifle competition and defeat its rivals. However, this strategic choice could have never succeeded at the business level, if Microsoft wouldn’t have the competitive advantage of understanding the customer and the market as they do.
Michael Dell founded the company Dell to offer network servers, workstations, storage systems, Ethernet switches, desktops, and notebook PCs after successfully selling his computers to customers directly in Texas. Over the course of three years his sales volume warranted the opening of an international sales office in 1987. In 1988 he began selling to large customers including several government agencies and Dell became a publicly traded company.
Dell Inc had very effectively used the direct marketing channel for the sales of computers to the end consumer. When all the other pc makers were selling through retailers and distributors, Dell had started efficient use of the direct channels.
Launched as a static page in 1994, Dell.com took the plunge into e-commerce shortly thereafter, and by 1997 was the first company to record a million dollars in online sales, according to Dell spokesperson Deborah McNair.
Historically, personal computer companies produced most of the components for a computer which they assembled into their final products and distributed to resellers. The manufacturing of these components was vertically integrated into the organisation. Dell, as a small start-up, could not build this infrastructure. Instead, they developed a model where they developed relationships with organisations that could provide these components, allowing Dell to focus on selling and delivering computers. By selling directly to customers, initially through mail orders and later by using the internet, Dell avoided reseller mark-up. Dell also enabled customers to order customised computers, which Dell then assembled after receiving the order (Magretta, 1998, p.73-74). “Customers got exactly the computer they wanted and Dell saved money making the computers only when they were ordered” (Hill & Seggewiss, 2008)....
In 1984, Michael Dell invested $1,000 in start-up capital to register his business as Dell Computer Corporation, which was known as PC's Limited. The company becomes the first in the industry to sell directly to end-users by passing the dominant system of using computers resellers to sell mass-produced computers. Dell Computer also pioneers the industry first thirty-day money back guarantee. It became the cornerstone of Dell's commitment to expand its service offerings, superior customer satisfaction, and the industries first on site service program. It also established its first international subsidiary in the United Kingdom, and raised $30 million in its initial public offering.
In late 1968, Gates and Allen, along with two other schoolmates, formed a group called the 'Lakeside Programmers Group'. Gates and Allen had visions of solving practical problems through the use of computers. They got an opportunity in 1971 when Information Sciences Inc. recruited them to develop a program to manage their payroll system.
The stakes and the extension of the development of the gateway is an incredible track cardholder data and screen
After completing their second year of college Gates and Allen had decided to make their own software company. They started out with Micro-Soft as the first name of the company but later took the hyphen. Gates had soon went back to school at harvard however he dropped out in 1977 before he graduated. On his time out he soon devoted himself to Microsoft and made it his full-time Job. This would help him find the problems and fix them. It would make the company a lot stronger and better. “In 1976, Steve Jobs and Steve Wozniak, two young computer hobbyists from Palo Alto, California, unveiled the prototype for the Apple 1 computer. A local computer dealer saw the Apple 1 and ordered 100 pre-assembled units. Over the next 10 months, about 200 Apple 1’s were sold.” (Musolf).
SGM PC Depot was established in 2009 to provide computer products with features that give users the ability to remain in touch with the latest trend of personal computers, laptops and gadgets. The company was founded by Mr. Groyon, Ms. Salvador and Ms. Mulles.