1- Knowing that growth is one of Gateway’s long-term objectives, do you agree with Inouye’s decision to reduce the product line and refocus on PCs? Explain
The CEO of Gateway, Wayne Inouye said itself that “We were not making a lot of money on the consumer electronics side at all” and “ our route to profitability is to fix our core business, and that’s PCs and PC-related products”. If a company wants to grow, they need to do what it takes to be more profitable and if the most profitable product they sell is the PC, why not focusing on this product?
I totally agree with this decision because if the PC is the most profitable product they have, they should follow a strategy of specialization of the product in order to let customers know that yes, Gateway only sells PCs, but that this PCs are so good that it worth buying them. I believe that it is better to sell one product and be able to place it in the top 5 of quality of the market, rather than selling a bunch of products that do not make the difference with competitors. Moreover, when a company wants to make a radical change, it needs to take radical decisions. In this case, Gateway was in a bad moment and needed to make some important changes, and this strategy is an aggressive strategy and might be very beneficial for the company.
2- What kind of programmed decisions might have arisen from some of the nonprogrammed decisions made by Ted Waitt and Wayne Inouye during the past few years?
Due to the problems the company had, nonprogrammed decisions were taken such as closing all the Gateway Country stores or to fix their core business and those decisions certainly caused some programmed decisions.