商务英语案例.docx

商务英语-案例

Facing Business Challenges at Gateway 2000

From Farm Boy to Billionaire

Computers. The odds are slim you will survive, much less thrive, in this industry. You have to guess what customers will want more than a year in advance, even though technology is changing at an incredibly fast pace. It's hardly a business for cowboys-unless you're Ted Waitt.

Son of a fourth-generation cattle broker , Waitt (currently 34 and worth an estimated $1.7 billion) rides herd over Gateway 2000 . They tell stories about Waitt, and not just in Sioux City, South Dakota -Gateway's homeland. They talk about how he built a fortune by trusting his instincts and making gutsy calls that led the industry. How he borrowed $10,000 from his grandmother to start a mail-order computer business , and how he turned a two-man, farmhouse operation into a global giant-in only ten years. And they talk about the pony-tailed farm boy clad in deck shoes and a polo shirt who knew that someday he was going to run his own company.

It all began while Waitt was working for a local computer store; he was amazed by how easy it was to sell computer equipment to acknowledgeable computer users over the phone. So in 1985 Waitt (the marketer ) teamed up with his buddy Mike Hammond (the technical whiz), and the two started a small mail-order computer business of their own. Waitt and Hammond worked long hours-from their upstairs office in Waitt's family farmhouse.

Their big break came in 1987, when Texas Instruments (TI) decided to stop manufacturing its own computers and instead sell only industry-standard IBM-compatible personal computers (PCs). Of course, owners of TI computers could trade in their equipment for newer IBM-compatible computers, but first they would have to cough up $3,500. Waitt and Hammond knew they could provide the same computer equipment TI was offering-and at a much cheaper price ($1,955). They did this by finding the best deals on cutting-edge computer components, and assembling the components to build top quality custom PCs . Because all sales were made-to-order and transacted over the phone , Gateway could afford to give customers more computer for their money-a strategy from which the company has never veered .

Within three short years, the company was shipping 225 PCs a day (each one in a black-and-white cow-spotted box), and sales reached $70 million. By 1993 sales topped $1.7 billion, and the company sold its stock to the investing public. In spite of Gateway's speedy trip to the top, the company was at a treacherous intersection . Gateway was run essentially by one guy-Ted Waitt-who relied on his instincts. And the company was getting too big to depend on only one man's judgment. In order to survive in this competitive industry, Gateway would have to find ways to expand its customer base and manage the company's growth.

If you were Ted Waitt, what steps would you take to beef up business ? Would you compete on price, speed, quality, or innovation? Would you consider other sales approaches besides telephone selling?

Meeting Business Challenges at Gateway 2000

Relying on his instincts, Ted Waitt made a number of critical calls that put Gateway in the lead. Of course, Waitt was no longer a one-man show. Beginning in 1991, he brought in experienced executives (from top companies like Digital Equipment, Texas Instruments, and IBM) to help manage the company's growth. Together they brought Gateway to new heights while sticking with its efficient, bare-bones assembly operation-no showroom, little inventory, and no retail outlets. In fact, Gateway's simple direct-sales operation allows the company to compete on speed, quality, and price.

Speed and quality in manufacturing give Gateway the biggest advantage. Not only can speed and quality win customers, but they win the right kind of customers-those who are willing to pay a bit more for computer equipment. Gateway moves like lightning: It gets new computers out the door in a hurry. They include all the latest technology-like top-quality color monitors, the latest operating system and software, and the most powerful computer chip.

Of course, buying a computer over the telephone and not seeing the equipment until the truck delivers the cow-spotted boxes to your doorstep is not for everyone. Gateway attracts computer-savvy buyers who need a lot less hand-holding and are comfortable purchasing from a catalog or an advertisement. Here's how it works: The customer calls in and, over the phone (or Internet), designs a custom-configured computer system using cutting-edge technology. In about five days, the custom system is built and shipped. Because there is no inventory to speak of (computers are made-to-order), as technology gets cheaper, Gateway can compete on price by changing prices daily and passing the savings on to customers.

Relying on word of mouth and a strong advertising campaign (about $90 million a year), Gateway rode a wave of success fueled by computer buyers hunting for good equipment at bargain prices. Gateway's success, however, did not come without its share of growing pains. Gateway's first portable laptop computer was a disaster. Failing to recognize that customers had to see and touch the product to appreciate its smaller size and capabilities, Gateway ran into a wall because the company's computers were not sold in retail stores where customers could experience the product's features. This lesson would not be forgotten. Other mishaps included sending out machines that did not work and busy phone lines that kept customers waiting-sometimes for hours. Fortunately, Waitt corrected these problems early on by instituting various quality-control measures to increase customer satisfaction. And his efforts paid off. By 1996 Gateway was shipping 5,000 to 6,000 computers daily and sales skyrocketed to roughly $5 billion.

That same year Gateway launched a product that was way ahead of its time. Called Destination, it was a combo PC and 31-inch television set with a wireless keyboard, a mouse, and a home-theater sound system. Learning from past mistakes, Waitt knew he would have to get the product in front of consumers so that they could see its features. This time Gateway cut deals with retail stores. None had ever carried Gateway's stuff before.

But Waitt's biggest challenge has been trying to crack the corporate market. Whereas Gateway sold most of its computers to individual users and small businesses, rival Dell set its sights on the lucrative Fortune 1000 corporate accounts and made some expensive investments-like $22 million in research and development (Gateway spent practically zip). Despite doubling its sales force, Gateway discovered that selling computers to corporate customers was not an easy task. First of all, competitors like IBM and Hewlett-Packard (HP) have large, well-trained sales and service staffs who have been doing business with big companies for years. Furthermore, IBM and HP products can be purchased at traditional retail stores.

Still, relying on a cost-efficient, bare-bones, direct-sale operation is Gateway's stronghold in this cutthroat industry. The company has no plans to alter its fundamental selling strategy. "If you come see us in the next century, we'll be bigger, better, and smarter, but fundamentally we'll be the same," notes Waitt. That is, Gateway will stick to what it does best: churning out huge volumes of PCs that are equipped with the latest technology at affordable-but not rock bottom-prices and selling them to customers over the phone.
Facing Business Challenges at Holiday Inn Worldwide
Sending Invitations Across the Globe

In the 1960s a family vacation in the United States usually meant loading the kids into the station wagon and driving off down the highway toward a tourist destination. And when weary vacationers needed to rest for the night, they often looked for the familiar green signs with “Holiday Inn” written in script and a colorful star for emphasis. All across the United States, this sign welcomed travelers to Holliday Inn hotels with promises of quality, comfort, and value.

By 1968 Holiday Inn was so well known in the United States that it began opening franchises in Europe. In 1973 the company opened its first Asian hotel in Japan, and in 1984 it became the first U.S.-based hotel to open for business in China. For 25 years Holiday Inn enjoyed great success in the European and Asian markets, opening 600 hotels and earning a reputation as upscale , professional, and well run.

However, in the 1980s Holiday Inn’s fortunes were beginning to fade in the United States. Many of the franchises were outdated and substandard . Family vacationers were being replaced by business travelers as the hotel industry’s bread and butter , and aggressive competitors with superior marketing strategies were targeting this growing segment . In addition, overbuilding had set off a wave of price discounting . As a result, both Holiday Inn’s share of the lodging market and its image took a nosedive .

But in the 1990s this icon of the U.S. highway was brought back to life after being purchased by Bass PLC, a British conglomerate. Bass moved quickly to make Holiday Inn Worldwide the leading hotel chain, not just in the United States but around the globe. In the United States, Holiday Inn pursued a strategy that segmented the market into different types of travelers and created a unique type of lodging for each group. Under names like Holiday Inn Express, Holiday Inn Select, Sunspree Resorts, and Crowne Plaza, the company offered different accommodations and amenities at different prices to suit the diverse needs of business and leisure travelers. Combined with a campaign to bring all of the franchises back up to a high standard of quality, the strategy quickly began to pay off.

Even so, the top brass at Holiday Inn Worldwide knows that the greatest growth potential is not in the saturated U.S. market but in the evolving markets of Europe, Asia, and Latin America. With increasing tourism and business development in these regions, the demand for comfortable, consistent, and affordable accommodations is booming . Holiday Inn needs a strategy for tapping this vast potential. Would the strategies that fueled Holiday Inn’s turnaround in the United States bring similar results internationally? Large-scale construction of new hotels will play a major role so what kinds of hotels should they be? How can the company best meet the needs of a wide variety of international travelers? Should Holiday Inn expand through franchises or by opening company-owned hotels? Should the same type of promotion be used for the entire global market or should it be localized to each geographic area? These are questions that Raymond Lewis faces daily as vice president of marketing. If you were Lewis, how would you answer them?
Meeting Business Challenges at Holiday Inn Worldwide

Part of Raymond Lewis’s job is to monitor and predict changes in the ever-evolving global market . Among the trends he has observed is the increasing similarity between the needs and desires expressed by consumers and businesses around the world in certain product categories such as lodging. On the other hand, Lewis knows that various countries and cultures approach purchases differently, and that people of various cultures respond differently to product promotion . His challenge, then, is to figure out how to satisfy both the similar and the diverse needs of each new market.

Lewis also knows that all travelers, regardless of where they are from or where they are going, share many of the same desires, fears, and expectations when they are traveling. They may not speak the same language or live the same lives while at home, but when they’re on the road, all travelers are (1) away from home and out of their personal comfort zones, (2) in different and often unfamiliar surroundings, and (3) subject to the same hassles and hardships. Therefore, Holiday Inn focuses on delivering a consistent product around the world. This way, whether the hotel is in South Korea, India, Buenos Aires , or Israel, travelers know that they will always receive a comfortable room at a fair price.

In addition, the strategy of segmenting the market by types of travelers that proved so successful in the United States also works abroad, but in a different way. Segmentation in the hotel industry is a relatively new concept in Europe, and in Asia it is virtually nonexistent. This is largely because in many of the developing nations of Asia, travel has only recently become an option for the majority of people. As a result, not every type of Holiday Inn hotel will be successful in every country. The company must know each market very well before it decides which type of hotel to open. Does the area draw mainly tourists or business travelers? How long do visitors usually stay? Do people from surrounding areas travel often? What types of accommodations do competitors offer in the area? By knowing the answers to questions like these, Holiday Inn is able to decide which type of hotel will best serve the needs of travelers to the area. For example, the company opened a SunSpree Resort in Arequipa, Peru, close to Machu Pichu, a popular international tourist destination. Holiday Inn’s management team feels that Sunspree has a great chance for success in this location because the hotel caters to tourists.

In the same way, Holiday Inn management expects a mix of business and leisure travelers to visit Seoul, South Korea. Therefore, the new Holiday Inn Seoul appeals to a broad range of travelers by offering a business center, banquet facilities , four restaurants, a fitness center , and a gift shop.
Just as in its early days of expansion in the United States, Holiday Inn is accomplishing its international expansion through a mix of wholly owned facilities and franchises, depending on the availability of resources and potential for profit in each local market. Although franchising agreements place less risk on Holiday Inn Worldwide, they also require the company to give up more control than it would by opening wholly owned facilities. However, franchises must adhere to strict quality standards if they intend to operate under Holiday Inn’s famous name.
Lewis and his team also recognize that even though travelers have similar expectations for the quality and value they get in a hotel, sometimes they like to stay in places that don’t feel like hotel chains. Therefore, the company has opened hotels in Europe, Australia, and South Africa that have a style and character unique to their locations. In this way, Holiday Inn is able to tailor its global product to local markets.
Nonetheless, Holiday Inn’s promotion strategy is decidedly global, regardless of which markets it enters. Lewis bases the strategy on two themes: “Welcome” and “Stay with som