Gateway Recommendations
Gateway Beginning in 1998, Gateway 2000 decided to perform a massive makeover and reorganization of its company, moving away from being solely a PC hardware company. ... Even the name was shortened to simply “Gateway.” With all these changes, the heads of Gateway wondered what changes had been successful and what further changes should be carried out. ... This report recommends that Gateway seek to develop their retail stores further and design their PCs and image to be unique from their competition, especially Dell. Through these changes, Gateway will differentiate itself and stand out from the many PC systems retailers in the market. At the same time, Gateway must maintain what unique qualities they have already established and build on them. ... By achieving them, Gateway will be able to increase their profits and regain a hold in the rapidly growing computer industry. This report begins by presenting the key changes that were made in recent years at Gateway and a description of its current state, focusing on the new image and organization of the company. It then outlines the key issues that Gateway now faces, especially those concerned with differentiating Gateway from the competition and continuing its growing success. ... This looks closely at Gateway’s financial reports, the products it currently sells, and its three sales channels. Recommendations are then made to Gateway that will help it achieve its goals of continuing and increasing its growth. ... History Founded in 1985 by Ted Waitt, Gateway had humble beginnings in a farmhouse located in Sioux City, Iowa. ... In the words of Ken Stickevers, Gateway.com vice president, Gateway’s “great service” and “great marketing strategy,” fueled by “Midwestern values,” were the reasons Gateway found itself as the second largest direct distributor of PCs in 1999. Despite its success, Gateway was still far behind Dell. Seeing this, Ted Waitt decided that changes were necessary for Gateway to remain competitive. ... The name change was simple – “Gateway 2000” would not remain modern with the arrival of the new millennium, so the name was shortened to simply “Gateway. ... The location change required that Gateway risk some of its original values. ... Despite all this, Gateway remained determined not to give up the values of high-quality components and support that it had prided itself on. The founding structure of the changes implemented by the new management lay in their “hexagon” strategy, which outlined the five different methods of sales Gateway would have. These five: software and peripherals, service and training, Internet access, portal/content, and financing, moved Gateway away from solely selling systems to also selling everything that would ever accompany a system. In other words, Gateway was opening itself up to all sources of revenue that were associated with PCs. The introduction of retail stores was a departure from the previous business structure Gateway was founded on. ... Even so, it was the natural progression of Gateway’s highly-rated support. ... Even when purchases were not made at the store, people who had visited the store would be more likely to purchase a computer via one of the other two channels: telephone sales or Gateway. ... The retail stores also started training sessions for computer purchasers, giving way to a new method of establishing connections to Gateway’s customers.