SWOT Analysis on Gateway Computer Company

The ‘seeding’ for Gateway Computers was laid in the year 1985, when college dropout, Ted Waite with a $10,000 loan provided by his grandmother and a rented computer started Gateway. From those humble beginnings, Gateway turned out to be a trendsetting, well-known company in the 1990s. It was in 1993 that it became part of the Fortune 500 companies’ list and also went public by first trading on the NASDAQ, and then moving on to the New York Stock Exchange in 1997. From early days, Gateway was always known for its pioneering skills because it was the first PC company to offer systems with color monitors as standard, the first to offer a standard three-year warranty and was the first direct retailer to sell its own branded consumer electronics with the launch of the highly successful Gateway® plasma TV. (gateway.com). As a major strategic decision, it acquired eMachines, which was considered to be one of the world’s fastest-growing PC makers, in 2004. However, from the early 2000s, it did not have a smooth run and in 2007 it ceased to exist as an independent company, as it was acquired by Taiwan based PC maker Acer.The first main strength of Gateway was and still is its brand image. It has a long-held association with the American people through truly ‘Americanized’ promotions. That is, Gateway shipped its computer hardware in black and white cow-spotted boxes and carried out creative brand-building exercises through Computer Shopper and other magazines, thereby optimally elevating its image among the Americans. Who doesn’t like the spotted dots, the cows, what they stood for, seeing (founder) Ted Waitt in the commercials with the pickup trucks? Bhavnani asked. It’s a company that people rooted for. (cited in Ogg, 2007). This strength is a distinctive competency for Gateway because it is this brand image that enticed Acer (and HP previously) to acquire Gateway, as that image can be ‘transferred’ to Acer as well.

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