HISTORY OF THE TECHNOLOGY
Gateway has founded in an Iowa farmhouse since 1985 by Theordore Waitt with a $10,000 loan guaranteed of his grandmother, a rented computer and a three-page business plan.
Then in 1991, the company introduced its distinctive cow-spotted boxes, a tribute to its farm heritage.
In 1988, the firm changed its name to Gateway 2000, which proved to be a pivotal year for the direct-sales PC upstart as its low-cost machines, powered with 286 processors, began to garner attention.
In 1990, Gateway relocated to South Dakota, a state with no income taxes.
In September 2004, Gateway moved its headquarters to Irvine, California.
In October 2007, Gateway was acquired by Taiwan-based Acer Inc., and combined entities now comprise the third-largest PC company in the world.
In 1993, it cracked the fortune 500 corporations with annual sales of nearly $3.6 billion.
Gateway, after that, has been first traded on the NASDAQ before moving its stock to the New York Stock Exchange in 1997.
Gateway became one of the world’s fastest growing and most efficient PC makers, in transaction valued at the time of the announcement at $235 million.
In 2002, Gateway’s products and service received more than 90 awards and accolades.
In 2003, Gateway was named the second most admired American company in the computer industry by Fortune magazine.
TECHNOLOGY DEVELOPMENTS
In 1987, Gateway developed an IBM-compatible personal computer (PC) using components from other PC makers.
In 1988, it was the first to make EGA color monitors standard on all its systems.
In 1990 it was the first to make Windows standard on all systems.
In 1994, before anyone else, it made the Pentium chip standard. The same year Gateway was first to make CD-ROM drive standard on all its systems
In 1992, Gateway unveiled its first notebook computer, The HandBook, which weighed less than three pounds.
In July 1996, Gateway became the first computer maker to allow customers to custom-order and pay for a new computer over the World Wide Web. Clients could order customized PCs via the firm’s World Wide Web site using a process similar to the one used by clients who placed telephone orders, which were typically filled in less than five days.
In March 2004, the company acquired eMachines, one of the world’s.
Gateway currently sells four LCD-based computer monitors as of January 2008, featuring 19”, 22”, 24” and 30” size displays with the 24” and 30” models featuring screen rotation. Some include USB ports.
Gateway’s latest All-in-One computer, called the Gateway one, has been described thus “The no-compromise elegant design, simplicity and expandability of Gateway’s newest all-in-one PC brings sophistication to computer design, proving PCs don’t have to be boxy and boring.
Gateway currently ships Microsoft Windows Vista as the operating system of choice for its computers, beginning on January 29, 2007, including Premium editions of Windows Vista.
Gateway bundles a large quantity of various software. Some of which is Cyberlink Power 2 Go and the Gateway Game Console.
THE CURRENT STATE OF THE ECONOMY
The need for electronic commerce stems from the demand within business and government to make better use of technology, to simplify business procedures and to increase efficiency.
Generally, the overall market for PC’s is being influenced by many trends One in particular, however, is affecting the market more than any other. Simply, customers are becoming more educated about their purchases.
However as an increasing number of customers become more knowledgeable about computers, trends are beginning to take shape.
Gateway has been accused of shipping spyware.
Gateway also includes “BigFix” – a Gateway computer update/customer support program.
SWOT ANALYSIS OF STRATEGIC PLAN
STRENGTH
The company offers desktop and notebook computers, servers, and PC related products, software, and services.
The company’s retail segment has performed well in recent years, and contributed to the overall revenue growth. This has partially helped to offset weak revenues from its other segment.
WEAKNESS
Gateway reported weak operating and net profit margins in recent years, which weaken its long-term financial position.
The company is highly dependent on retail partners, makes it vulnerable to any adverse change at the customer’s end.
OPPORTUNITIES
Gateway is one of the major US personal computer (PC) companies.
Gateway is one of the prominent players in the branded PC market in the US. A strong market position provides it with a significant edge over its competitors.
Growing demand for the PC notebooks through 2011 provides on opportunity to the company to increase its market share.
THREATS
Acer is primarily engaged in the manufactured and sale of IT hardware product.
Because of the ever changing nature of the computer industry, companies are constantly being challenged to produce higher quality, lower priced products, and to do it faster and more efficiently that the competition.
The price difference between brands is getting smaller all the time.
CHANGE IN MANAGEMENT
Gateway made its first foray into the Pacific Rim in 1995, creating a manufacturing plant in Malaysia to make PCs.
The firm also moved into Australia with the purchase of Osborne Computer, based in Sydney.
Steady demand prompted the firm to create a third U.S. manufacturing plant, located in Hampton, Virginia, in 1996.
To gain a foothold in Greece, the firm forged a distribution alliance with Dakos S.A.
In similar move, Gateway also linked a distribution deal with Al Yousuf computers, based in the United Arab Emirates.
Growth in Europe was bolstered with a new showroom in Sweden.
In the mid-1990s that Gateway established its Country Stores Inc. Subsidiary. Gateway’s 8,000-Square-foot Country Stores, similar to the firm’s European showrooms, gave customers the chance to examine Gateway merchandise before purchasing it via mail or telephone.
RECENT DEVELOPMENT IN COMPETITION
In 1999, Gateway became the first PC manufacturing to bundle its own Internet service with sales of its personal computers.
Through Gateway.com, Gateway customers are able to purchase an entire computing solution from one Web site offering personalized PCs plus thousands of peripherals, software, and related products.
In September 2002, Gateway entered the consumer electronics market with aggressively priced plasma TVs. At the time, Gateway’s US$2,999 price for a 42” plasma TV undercut name brand competitors by thousands of dollars.
In 2003, the company expanded the range of plasma TV and added digital cameras, MP3 players and other devices.
By early 2004, in terms of volume, Gateway had moved into a leadership position in the plasma TV category in the United States.
Gateway also markets the C-Series of “Convertible Notebooks”, notebook PCs combined with tablet PC technology including handwriting recognition with a stylus much like a personal digital assistant (PDA). They are available through the online retailer TigerDirect
STATUS OF SUPPLIER
Gateway enter into a cooperative agreement to further reduce the administrative costs and acquiring commercial items from the General Service Administration (GSA) Federal Supply Schedule Contract GS-35F-4565-G
Federal Supply Schedule contract BPAs eliminate contracting and open market costs such as: search for sources; the development of technical documents, solicitations and evaluation of bids and offer.
TARGET SEGMENT
Gateway has three major business segments: Direct, Professional, and retail.
The Direct segment sells to consumers and small business customers using both the Internet and call centers.
The Professional segment sells to medium-to-large businesses, educational institutions (K-12 and higher education) and government agencies (federal, state and local) using telephone-based and field sales teams, complemented by local, regional, and national value added resellers and facilitated through customized Web site
The Retail segment sells products directly to retailers, such as consumer electronics stores, computer superstores, and warehouse clubs. eMachines branded PCs are sold exclusively through the retail channel.
DEVELOPMENTS IN GOVERNMENT REGULATION
In the environment
Gateway seek to minimize the environmental impact of its products. To that end, Gateway design its products and operate its facilities in an environmentally conscious way.
Gateway Foundation
People will always be more important than technology. Gateway works to enhance access to technology for underserved communities.
Proposition 65
Gateway has reformulated its products to comply with California’s safe Drinking Water and Toxic Enforcement Act.
Electronic Waste
Gateway complies with the provisions of California’s and Maine’s laws regarding electronic waste and recycling.
FORECASTS IN EACG OF THE FOREGOING AREAS
The astounding rise of Gateway came to a crashing halt in 2000 when the global PC industry fell into its worst slump ever. Gateway was hit particularly hard because of its greater reliance on the consumer and small business markets.
During 2003 the firm introduced 118 new products in 22 categories.
eMachines had about $1.1 billion in sales in 2003. At the time of its acquisition by Gateway, it employed only about 140 people
SHORT-TERM STRATEGY FOR FUTURE PLANNING
Focus more on the consumer market.
Strategic alliance with Verio Inc.
Expanding product line
Partner with other companies to provide new, improved and diverse products in better use each company’s strengths.
Developed E-trust of website’s features in privacy and security measure, easily access, ordering status, and no charges until shipped.
MARKETING STRATEGY
Product Strategy
Gateway uses product models which it currently markets a range of laptop and desktop products for the home markets including the C140X, NX100X, CX120, NX260X, NX560, and NX860 series
Gateway also markets a range of desktops including DX420, FX510, FX530, and Profile 6 series
Gateway’s lowest priced system is the DX420B Series, with a monitor sold separately.
Gateway currently holds an estimated 6% market share. It sells its products online by telephone, and in Gateway country retail store.