Gateway computer company history and impact

Gateway PC

Gateway Computers

Gateway Computers has a rich heritage and a remarkable business story. Founded in 1985 in a U.S. Midwestern farmhouse, Gateway has grown into one of the world's best-known technology brands with millions of satisfied customers; starting with a $10,000 loan guaranteed by his grandmother, a rented computer and a three-page business plan, founder Ted Waitt turned Gateway into a revolutionary company whose innovations helped shape the technology industry (Gateway, N.d.). Gateway's history includes several milestones that helped the computer industry in general develop. Although the company has also experienced many setbacks over the years, Gateway serves as a prime example of how a revolutionary vision can help shape an entire industry. Gateway's vision (before the Acer acquisition) was:

To profitably grow their business faster than the competition by better understanding and serving the desires of their customers and aggressively marketing the highest value directly to their chosen markets (Alchin, N.d.).

The customer oriented focus the company's mission was undoubtedly a major success factor in the company's history. This paper will consider Gateway's achievements in both technology as well as their business model in general.

Gateway's Achievements

By the late 1990s, Gateway had become the second largest direct marketer of computer systems and was feeling a significant amount of industry pressure from competitors such as Dell and Compaq. In 1997, it acquired Advanced Logic Research (ALR) and announced its entry into the corporate network server market. This also allowed Gateway to continue developing the server technology area. Furthermore, Gateway also modified its distribution model to increase the use of channel resellers which supported the corporate clients target market. At this time, Gateway also announced expansion of its own chain of retail stores, Gateway Country, building on the success of its store in Great Britain (Wright, Smith, Jesser, & Stupeck, 1999). This was a move to go beyond the ecommerce business model and to start diversifying the company.

Another major achievement for Gateway occurred in March 2004 when Gateway acquired eMachines, one of the world's fastest growing and most efficient PC makers at the time. The eMachines brand of personal computer was known for providing award-winning technical support and quality at low prices (Gateway, N.d.). eMachines prided itself on its reduced power consumption which not only saved clients' money, but was also better for the environment. This also appealed to corporate and institutional clients who valued the power consumption savings which can add up significantly when hundreds of computers are used in operations.

Figure 1 - Power Consumption Comparison (CNET, 2009)

Since Gateway has joined Acer, it has still kept its dedication to being energy efficient as well as environmentally responsible. One of the elements of this management philosophy is the Corporate Social Responsibility (CSR) program through which a company sets the goal of reaching a global balance that integrates human, environmental and community resources and this is what Gateway's integrated CSR strategy is based upon (Gateway, N.d.). The parent company, Acer, also has a strong dedication to respecting the environment. Their environmental statement is as follows:

Acer takes environmental responsibility seriously in all of our operations and products. We have developed an environmental management system that not only helps us save energy and ensure appropriate treatment of waste in all of our offices, but also works to raise the environmental awareness of employees. Our products embody the concepts of the precautionary principle and individual producer responsibility (IPR) as we endeavor to reduce our environmental impact throughout each stage of the product lifecycle and provide appropriate recycling channels to help consumers do their part for the environment (Acer Group, N.d.).

The emergence of e-commerce has had a substantial impact on consumer purchasing behavior. However, in the beginning of the ecommerce trend the rate of consumers' acceptance of this platform had been slower than many predicted. Gateway was a leader in studying consumer behavior and fulfilling their expectations. Many studies suggested that consumers perceive relative advantages and disadvantages of shopping online vs. shopping in traditional stores (Inks & Mayo, 2002). Gateway was an expert at promoting their strengths on the online distribution channels.