Gateway Essay -- essays research papers

introduction Inc.IssuesThe US personal computer market place continued to struggle and Dell had just lowered its prices about 20%. As a result, its stock price rose 13% and it gained more than market share.How should Gateway respond to Dell and its recent price cuts?oLowering Gateway prices could exist gross profit margins oConversely, unit sales were already down so there was the threat of additional sales lossResource trystoShould Gateway focus on US consumer sales more or US business sales?Keeping in mind that Gateway planned to discontinue company-owned operations outside North America at the end of 2001oHow should Gateway run its sales and advertising operations? (Keeping in mind, the 2001 advertising budget is about $20 million less than in 1999 at $239.6 million)How much emphasis should be placed on PCs and PC-related units v. beyond-the-box products and services?Where should Gateways marketing efforts be directing customers telephone and its website or to its Country S tores?Operating issues in regards to selling, general and administrative (s, g, a) expenseso boilers suit company s, g, a expenses would decline due toClosing of North America manufacturing, sales and service operationsReduction in the number of Country Stores little advertising fees and expenditures End of alliance with OfficeMaxoHowever, decisions about continued s, g, a expenses still filled to be made Does the Gateway store concept need more thought pertaining to Gateways business model of operating as built-to-order?Gateways gross margin and operating costs demand attention in order to once again be profitableoThe influential aspects among its customer sales mix, its product sales mix and its sales mix across its 3 distribution lanes needed to be monitored a... ...f both and combat Dells lower prices. Ways in which this could potentially happen is by offering basic beyond-the-box products with the purchase of a PC and aggressively encourage upgrades and additional features customers cant refuse. Another way to replication other PC manufactures is through differentiation. By Gateway focusing on operating its build-to-order method as efficiently as possible, exploiting its distinct third channel of stores and staying technologically as innovative as possible, it is able to differentiate itself apart from its competitors.Lastly, in addition to its pursuit of the consumer market, I think Gateway could benefit from more assertively targeting the business segment that has been ruled by Dell. Its a fact, that PCs sold for business-use tend to be of a higher look and therefore, more expensive with higher margins. In 2000, 65% of Dells PC sales went towards the business sector whereas Gateways main market was from consumer sales, which is often less profitable. If Gateway could go after the business market, without completely losing its consumer sales base, it would be able to better compete, especially with Dell.