Case Study on Marketing Strategies:

Failure Stories of Gateway

Gateway falls short of their strategies.

Gateway has attempted to revive

itself by becoming a producer of a
wide variety of consumer electronics
products branded with the group’s
name. But PCs still make up the
bulk of its sales

Compare Dell’s and Apple’s highly disciplined innovation efforts to Gateway’s shoot-anything-that-moves
approach. Gateway started as a process innovator, becoming, with Dell, a pioneer of direct distribution, but
it also tried to be a product differentiator, maintaining relatively high-cost manufacturing plants, investing
more than Dell in R&D, and launching expensive brand-advertising campaigns. It innovated aggressively
on the retailing end as well, pioneering the exclusive stores that Apple would later (and more successfully)
copy. It even tried to be a service innovator, pursuing a highly publicized “beyond the box” strategy involving
the provision of various consulting services to small businesses. By trying to innovate everywhere, Gateway
failed to build a strong competitive advantage.

Company fail to leverage their brand name, they were investing everywhere, in electronic industry and
missed their core competencies as PC maker, eventually they lost ground in the marketplace, by clearly
not understanding the behavior of consumer market. Moreover, Gateway
complex website for selling Personal Computers is hard to understand and
customizing it is quite a job. Company website is poorly segmented where
advance and simple features are on the same HTML (Hyper Text Machine
Language). Further, their value added advantages are next to zero,
including customer support solution, in addition, Gateway’s, AMD
processors (Athelon; Intel rival) 1.8Ghz notebook designs are exact
imitation of exact Compaq or HP V1000 Presario.

When Gateway, was the market leader in the US, the company was not aggressively emphasized on
competing with the other Japanese firms where at that time, the Japanese products were starting to enter
the US market with low-priced and high-quality personal computers. The ignorance and the poor response
of Gateway had cost the company to lose huge percentage of its market share in the US and worldwide.
Gateway was unable to lower its costs and improve its brand image.
Case Study on Marketing Strategies:
Failure Stories of Alcatel
Alcatel failure story

Alcatel market share deteriorated, and this is partially due to the slow movement made by the company to
shift from a wireless phone industry to digital technology. In other words from AMPS (Advanced Mobile
Phone System), D-Amps (Digital-Advance Mobile phone systems) to GSM (Global system mobile system)
technology.

These problems were aggravated when analyst

found that there is a high level of competition within
the mobile industry. There is a risk of supplier
threats, the industry was mature and growth was
slow where in many cases manufacturers are
consolidating. And at the same time, Motorola does
not have the capitalization or expertise to compete effectively with its fierce rivals such as Nokia and Sony
Ericsson (back then).

The biggest setback of Alcatel was a fail merger & acquisition (M&A) between lucent technology and
Alcatel. Company managers was having a high expectations, experiencing Sony and Ericsson M&A.
Moreover, the problems with the proposed merger was the duplication in the two companies’ product lines
and both companies had a lot of traditional products in their portfolio that overlapped significantly, and it
would be a logistical nightmare to decide which ones they would retain and which to discontinue. Moreover,
the megamerger could also have raised some antitrust issues. This failing M&A between Alcatel cost $550
million liquidation.

On the other hand, Nokia which has a competitive advantage over Alcatel, through
being a low cost company. Nokia achieved this through utilizing a small number of
platforms to produce a wide range of phones (creating economies of scales) and
managing its inventories more efficiently than its rivals like Alcatel. Furthermore,
Alcatel Corporate strategy was hierarchal, which means more paper work, consuming
time on, making manager frustrated on work, Alcatel started losing their best talent
headcounts in late 90’s and early 2000’s resulting failure for the company, now Alcatel
have to adapt their strategies to be more focused on 3G mobile and 4G mobile system, in today’s customer
needs in order to find a niche for the company.