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Gateway Company - Scm

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GATEWAY COMPANY
A Personal Computer Direct Sales Manufacturer

The Awakening
• Gateway was founded on September 5, 1985, on a farm outside Sioux City, Iowa, by Ted Waitt and Mike Hammond and originally called Gateway 2000 which utilizing sales model copied from DELL. • Gateway was one of the first online marketing company which started in 1996.

The Expansion
• In year 1999, Gateway expanded operations worldwide to Europe and Asia Pacific with 3 plant in US, one in Ireland and one in Malaysia. • Late in 1990’s, Gateway started aggressive strategy by opening retail stores reaching 280 unit throughout US by year 2002.

Business Strategy
• Avoid carrying finished-goods inventory at the retail stores. • Retails stores mainly for demo to customer in order to help customer before deciding the right configuration to purchase. • Based on customer order, PC were manufactured and shipped from one of the assembly plants.

The Success and the Dawn-fall
• Initially rewarded by Investors for the strategy with stock price raised to more than $80 per share in late 1999. • The downfall came later in November 2002 where shares dropped to less than 44 which Gateway losing significant amount of money. • Plants in Salt Lake City, Ireland and Malaysia were shutdown. • Gateway closed all it’s retail outlets and reduced the number of configurations offered to customers in April 2004.

Question 1
i. Why Gateway have multiple facilities in the United States? The company initially start in US which the founder may see the increasing of the demand in US which to accommodate the request orders and to close the gap of performance(time-related).

Question 1 ii. What advantages or disadvantages does increasing the number of production facilities offers? Advantage • Able to accommodate customer demand • Easily transport to nearest locations • Able to offer more variant of

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