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
1. How and why did the personal computer industry come to have such low average profitability?
Microsoft is currently the largest company in the computer industry. With a market capitalization of $291 billion, Microsoft has built an empire by dominating software sales for personal computers. Stock growth over the past 25 years has increased by more than 30,000%. However, Microsoft’s growth has substantially decreased since the market collapse of 2001(Niemond 25 April 2007).
Finally in 1987 Ted Waitt recognized the possibility of selling fully configured computers, at good prices. 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.
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.
How and why did the personal computer industry come to have such a low profitability?
Dell Inc. weakness was cell manufacturing because their assembled computers were being shipped five to six days after the order was placed. It is an inconvenience for the customers to always send their computer away to have it repaired. First, they are left without internet access. Second, the time it reaches Austin, Texas, have it repaired, and shipped back can take days. The company opportunities were the Dell U.K. that open business in 1987 and in that country it was a lot of companies selling cheap computers. Dell Inc. strides on loyalty among customers and employees, and that could only be derived from having the highest level of service and performing products. Segmentation within the company enables them to measure the efficiency of the business in terms of assets use. Dell Inc. evaluates their return on invested capital in each segment, compare it with other segments, and target what the performance of each should be.
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
SWOT analysis of Dell Computers History: The company was founded in 1984 by Michael Dell, now the computer industry's longest-tenured chief executive officer, on a simple concept: that by selling personal computer systems directly to customers, Dell could best understand their needs, and provide the most effective computing solutions to meet those needs. Today, Dell is enhancing and broadening the fundamental competitive advantages of the direct model by increasingly applying the efficiencies of the Internet to its entire business. Company revenue for the last four quarters totaled $19.9 billion. Through the direct business model, Dell offers in-person relationships with corporate and institutional customers; telephone and Internet purchasing (the latter now exceeding $18 million per day); customized computer systems; phone and online technical support; and next-day, on-site product service. Dell arranges for system installation and management, guides customers through technology transitions, and provides an extensive range of other services. The company designs and customizes products and services to the requirements of the organizations and individuals purchasing them, and sells an extensive selection of peripheral hardware and computing software. Nearly two-thirds of Dell's sales are to large corporations, government agencies and educational institutions. Dell also serves medium and small businesses and home-PC users. Dell's Unique Direct Model: Dell's award-winning customer service, industry-leading growth and consistently strong financial performance differentiate the company from competitors for the following reasons: Price for Performance -- With the industry's most efficient procurement, manufacturing and distribution process, Dell offers its customers powerful, richly configured systems at competitive prices.
Global companies play an important role in the business environment, because they connect their business together around the world. A good example of a global company is Dell Inc., an American computer-hardware company, headquartered in Austin Texas, which develops, manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. They design, build and customize products and services to satisfy a range of customer requirements: from the server, storage and Premier Services needs of the largest global corporations, to those of consumers at home. According to the Fortune 500 2006 list, Dell ranks as the 25th-largest company in the United States by revenue.
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.
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.
This strategy was carried out by selling via phone, fax and direct sales, instead of selling through retail stores. Not only this approach differentiated Dell from other competitors at the time, it also reduced its operating costs as it did not have to rent expensive retail space. In addition, Dell’s strategy of selling customised computers allowed it to hold only a small amount of inventory, which reduce...
Dell Computer have recently announced changes to their business strategy and supporting supply chain. They will no longer focus on a made to order direct sales model for their personal computers. Nor will they continue to refine their renowned supply chain model that supported their sales model. Instead, they will be looking to produce personal computers with fixed configurations at lower prices. This essay looks at why Dell have changed their strategy, and then considers the customer value proposition of the new strategy, as well as lessons that other organisations can learn from the Dell experience.
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...
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.