Gateway was founded in 1985 in an Iowa farmhouse and has grown into one of America's best-known brands. Gateway is the third-largest PC Company in the U.S. Gateway started out in 1991 when it introduced its distinctive cow-spotted boxes. In December 1993, it became part of the Fortune 500 and started to trade NASDAQ, a t$15.00 per share, prior to moving to the New York Stock Exchange in 1997. In March 2004, the company acquired eMachines, a PC maker, for $235 million. This took Gateway from a PC maker to a full-service technology provider with a wide range of its own products and services, such as thin TVs, digital cameras, camcorders and systems and networking products. As of July 2004, Gateway has approximately 3,400 employees. Gateway prefers the plain talk and fair dealing way of doing business and bases on offering products directly to customers, providing them with the best value for their money and unparalleled service and support. They are devoted to treating their customer with respect and decency. Gateway was the first company to offer systems with color monitors as a standard, as well as three-year warranties and the convergence of the PC and television. Gateway today still focuses on its original objective to help people improve their lives through technology. Gateway products are offered at major retailers, over the web and phone, and through its direct and indirect sales force. Gateway is working on international growth since a good portion of their business is done in the United States. Since the merger of Gateway and eMachines, the company has closed down all their retail stores and is focusing on internet and phone orders, which is the same as what Dell has been doing for many years now. With t... ... middle of paper ... .../shareholders_2004.pdf">http://content.gateway.com/www.gateway.com/about/investors/docs/shareholders_2004.pdf http://www.gateway.com http://www1.us.dell.com/content/topics/global.aspx/corp/en/home?c=us&l=en&s=corp&~ck=lf http://www1.us.dell.com/content/topics/global.aspx/corp/background/en/index?c=us&l=en&s=corp http://premium.hoovers.com/subscribe/co/fin/history.xhtml?ID=16706 http://premium.hoovers.com/subscribe/co/factsheet.xhtml?ID=13193
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.
How and why did the personal computer industry come to have such a low profitability?
During the 1990s, each company experienced specific difficulties to their market share. Both companies struggled to reestablish themselves in the global consumer electronics world. As the year 2000 came around, new CEOs at both companies came up with even more complicated initiatives and reorganizations. Outsiders wondered how each company’s internal changes would affect their endless competitive battle in the industry.
1. How and why did the personal computer industry come to have such low average profitability?
It all began when an up-and-coming 19-year college freshman named Michael Dell brought a Mac computer, took it apart just to understand how it worked. Michael Dell quit school, invested $1000 of his own money and established PC’s Limited in 1984. PC’s Limited began by buying old computers, making improvements and retailing them for a profit. Once consumers learned more about PC’s, they wanted newer versions of the current PC’s. Michael Dell made a decision, he would manufacture his own PC.
Duckett observed an article on the Dell website that presented an annual prize to one small business in recognition of its innovative use of technology to improve its customers’ experience. Duckett had done just that. With the improvement of her business through information technology, she had become successful. Duckett used Dell PowerEdge servers and a variety of desktop PC systems by Dell that her employees use. Duckett’s passion for commitment to customer satisfaction and the use of information technology for business success gained her the reward she was destined for. With receiving the $30,000 worth of Dell products and services, Duckett planned to improve her business and continue her commitment to satisfying her customers. The lifetime membership to the National Federation of Independent Businesses and a day with the CO, Michael Dell, and his executives was just a bonus to the great achievement that she had accomplished.
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.
Speaking about the business model of Dell, it has ability to remain on the higher end of the scale for a particular time period. Dell has business model, which primarily focuses on direct selling line of attack. It in a straight line supplies the PCs to the regulars. It does not believe in intermediary, retailers for the business practices. Undeniably, this gives them an edge to serve customer well. Nevertheless, it understood the importance of retailers and start offering products on the premises of retailers, such as Wal-Mart, Sam’s Club and so on. Next, Dell administration is certain of the exclusive business of PCs. As time goes on, however, observing the
Michael Dell’s hardworking nature as a man began by being a persistent worker as a child. These traits not only made Michael Dell a great man, but an even better businessman. He set goals and raised standards all around the world. Michael Dell is best known as a business leader, entrepreneur, innovator, and contributor to society. People do not realize how great of an effect Michael Dell has had on their lives. He carried technology to a whole new level and made it his own.
Customization -- Every Dell system is built to order. Customers get exactly what they want. Reliability, Service and Support -- Dell uses knowledge gained from direct customer contact before and after the sale to provide award-winning reliability and tailored customer service. Latest Technology -- Dell introduces the latest relevant technology much more quickly than companies with slow-moving indirect distribution channels. Dell turns over inventory every six days on average, keeping related costs low. Superior Shareholder Value -- During the last four quarters, the value of Dell common stock nearly doubled. From 1996 through 1998, Dell was the top-performing stock among the Standard & Poor's 500. Internet Leadership Sales via Dell's Web site surpassed $18 million per day during early 1999, accounting for 30 percent of overall revenue. The company's application of the Internet to other parts of the business --including procurement, customer support and relationship management -- is approaching the same 30-percent rate.
In the exploding world of e-commerce, the ability of a company to attract customers using websites is critical for the company’s success. The use of the website by two computer manufacturers, Dell and Compaq, is evidence of this fact. Dell is the forerunner in the direct marketing of computers to customers via the Internet. As the success of Dell’s marketing approach became apparent, other computer companies such as Compaq have tried to market their product directly via the Internet as well. In evaluating the Dell and Compaq computer websites, several areas had to be assessed and compared for their effectiveness in promoting the product. The four main areas included in the evaluation of the websites were the target audiences for each company, the style chosen for the website, the content of each website, and the structure of each website. However, the experience of Dell in direct marketing has allowed them to create a website that is more effective for a wide customer base than the Compaq website is.
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.
Although it is true that many people, when confronted with the task of buying a new computer, will simply go to the closest Best Buy and purchase whatever is on the shelf, an increasing number of people these days are turning to building their own computers. Whether they are interested in saving money, or just like the idea of being in control of what goes into their computer, they need to know which parts are the best for their needs, which parts are the best value. Getting this information from an impartial place can be challenging, but thankfully there are a few websites around today that have a reputation for giving honest reviews and going the extra mile to find the best hardware for your money. I am reviewing two of these sites today, Tom's Hardware Guide, and AnandTech.
Dell Company has a clear understanding of its own company strengths such as selling their products directly to customers without a middle man and in designing its computers and other products to the customer's specifications. For example, Dell Company had designed its products to be more functional, lighter and more easier to use. This helps reducing the manufacturing costs that was needed. Dell Company also not forgetting its own weakness such as having no relationships with local computer dealers, which will be hard for getting supplies and support from the other companies. Besides, Dell Company is a company with a smaller capital, and at that time what they need the most will be financial support and sponsorship. Thus, with no relationship with local computer dealers disadvantages the company. Besides, they do not have unique technologies to offer the market compared to its competitors. Dell Company faced threats from other competitors such as Compaq and IBM, both of which had much stronger brand names and reputations for quality at that time. Moreover, it is hard for the Dell Company to compete in a market that the need for computers and laptops are getting lower, which these products are getting replaced by smart phones and tablets. Dell Company identified opportunity by noting that its customers were becoming more knowledgeable about computers and could specify exactly what they wanted without the help from the sales person of the company. Dell Company should release new technology and new ideas that can attract and fulfill the customers. Related to that, Dell Company has to establish its Research and Development department in order to produce new products to the market. In the mean time, Dell Company provides various enterp...
Dell’s initial competitive strategy, when it was founded in 1984 by Michael Dell, was to focus mainly on differentiation. Its strategy was to sell customised personal computer systems directly to customers, which was a rapidly emerging market at that time (1). This was done by targeting second-time customers, those that already understand computers and know what they wanted. Meanwhile other companies at the time was selling “’plain brown wrapper’ computers” (2). By offering customisations, Dell gained a better understanding of customers’ needs and wants. This helped the organisation position itself differently against the more popular brands, such as Compaq and IBM.