Detailed SWOT analysis of Gateway Computers

Gateway Computers SWOT

Gateway Computers

Gateway was acquired by Acers, Inc., a multinational electronics company that has, through several acquisitions, become the second largest PC company in the world (Satariano, 2011; "Yahoo! Finance," 2011).

Product Strengths

March 2004, Gateway acquired eMachines, one of the world's fastest growing and most efficient PC makers. The eMachines brand complements Gateway products in terms of efficient manufacturing processes, and customer-pleasing technical support ("Gateway, Inc.," 2011).

Pricing Strengths

eMachines quality at low prices.

Promotion Strengths

Distribution Strengths

Gateway is sold through leading retailers, e-tailers, and channel partners in the United States, Mexico, Canada, Japan, and China. Acer is expanding market share the South American and Asia-Pacific regions ("Gateway, Inc.," 2011).

Customer Strengths

Weaknesses

Product Weaknesses

The total Asian PC share of worldwide shipments is expected to decline to 16.5% in 2011 from 18.2% in 2010. This is a burden for Acer because of its focus on driving heavy volumes of shipments using outside firms -- Original Equimpment Manufacturers (OEM) -- to design and build its machines. However, the Acer machines have very little to distinguish themselves. In essence, there is little to no product differentiation (Ray, 2011, July 4).

Historically, Gateway spread itself too thin by marketing -- in addition to its line6of monitors, servers, networking and storage equipment, and accessories and peripherals -- a line of consumer electronics products, such as plasma televisions, digital cameras, MP3 players, DVD players and recorders, and home theater systems ("Funding Universe," 2004).

Pricing Weaknesses

Promotion Weaknesses

Distribution Weaknesses

Customer Weaknesses

Opportunities

Product Opportunities

The three largest PC manufacturers in the world -- Hewlett-Packard Co. (HPQ), Dell Inc. (DELL) and Lenovo -- are offering new tablets as the popularity of Apple's iPad reduces demand for desktop, laptop, and notebook computers (Lee, 2011, July 19).

Lenovo's IdeaPad Tablet and Thinkpad tablet, use version 3.1 of Google Inc. (GOOG)'s Android operating system. Lenovo plans to sell a new tablet based on Microsoft Corp. (MSFT)'s Windows 7 system in the fourth quarter of 2011(Lee, 2011, July 19).

Pricing Opportunities

Lenovo's IdeaPad Tablet is priced from $499, and their Thinkpad tablet, priced from $479.

Promotion Opportunities

Distribution Opportunities

Customer Opportunities

Threats

Product Threats

Hewlett-Packard Co. (HPQ), Dell Inc. (DELL) and Lenovo, the world's three biggest makers of PCs, are offering new tablets as the popularity of Apple's iPad curbs growth in demand for desktop and notebook computers (Lee, 2011, July 19).

The super-tight supply of iPad is creating blockbuster demand, putting Apple miles ahead of competitive tablet wannabes. Apple has superior iPad and Table design, coupled with an aggressive cost-vs.-price strategy that could give them an iPod-like dominance. (Ray, 2011, July 14).

Dell Inc., Hewlett-Packard Company, International Business Machines Corporation, Lenovo Group, Ltd., and Apple Computer, Inc. have strong R&D; H-P and IBM have focused on corporate accounts ("Funding Universe," 2004). Apple continues as the largest threat with regard to innovative product design and product churn.

Pricing Threats

Promotion Threats

Distribution Threats

Customer Threats

Worldwide PC shipments totaled 84.4 million in second quarter, 2011. Global unit sales were 85.2 million for the quarter. Lenovo's sales growth in the U.S. And Japan helped it overtake Acer in global shipments, with Acer falling from second-largest PC seller to fourth- largest PC seller in the world (Satariano, 2011).

Reference

Gateway, Inc. (2004). Funding Universe. Retrieved http://www.fundinguniverse.com/company-histories/Gateway-Inc.-Company-History.html