Gateway grows by direct sales and lifelong technical support

GATEWAY 2000 has expanded dramatically since it was set up 11 years ago in Sioux City, Iowa. In its first year of business, it has sales of $1 million and operated from a single converted farm building. Last year it had sales of $3.7 billion

(£2.37 billion) from its headquarters on the South Dakota side of Sioux City, and its European headquarters in the Dublin suburb of Clonshaugh.

The rural farmlands of South Dakota were an unlikely location for a personal computer (PC) company as many industry giants are based around the PC's ancestral home of Silicon Valley, California. Gateway's founder, Mr Ted Waitt, played on American images of the mid-West by selling his PCs in black and white boxes which mimic Friesian cows.

Gateway made its entry to the European market in 1993 and the company has grown dramatically over the past two and a half years.

The company uses the direct sales system, advertising its range of computers heavily in specialist computer magazines and other publications. All advertisements carry a freephone telephone number for customer enquiries and orders. Calls in the US are patched through to South Dakota while all calls to Gateway Europe are answered in Clonshaugh. Once a call has been taken and an order placed, Gateway staff assemble the PC to the customer's specification.

Gateway computers are not sold in shops, and while the company does operate a number of showrooms in the nine European countries in which it sells, if a customer decides to buy a PC after browsing in the shop he or she is given the use of a phone.

This direct selling method creates a large number of tele-marketing jobs and, apart from manufacturing staff, the Irish operation has separate divisions to handle finance and customer services, and sales and technical support. Technical support is a key area for the company as each Gateway customer receives free telephone technical support lord the lifetime of their computer.

Apart from Britain and Ireland, Gateway Europe operates in France, Germany, the Netherlands, Switzerland, Austria, Belgium and Luxembourg and staff are divided into a number of language groups to deal with foreign orders. About 80 per cent of employees are Irish, and this percentage is expected to be maintained over the next three years.

The company, which has so far received about £10 million in grant aid from IDA Ireland, initially planned to create 450 jobs in Dublin by the spring of 1996 but quickly exceeded it original projections. About 1,100 people are currently employed by the company in Dublin and work on a 90,000 sq ft extension to its 197,000 sq ft factory has been underway for several months.

Gateway, which employs 8,000 people worldwide, has already begun to recruit some of its new Irish staff. Gateway says that its rates of pay are "competitive" and all salaries are performance-related.

Last year European sales were worth $400 million, while the company had a total turnover of $3.2 billion. After tax profits rose by 80 per cent to $173 million.