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A PC Company Turnaround Story

November 11th, 2003 · 1 Comment

Business Week offers a story that one does not get to read often – how a company was turned around, in an industry dominated by Dell. The company at the centre is eMachines.

After eMachines Chairman John Hui took the company private in a $161 million buyout, Wayne Inouye delivered a turnaround that’s just short of miraculous. In the midst of the tech industry’s worst-ever slump, he overhauled everything from PC design to demand forecasting. He cut expenses by outsourcing manufacturing and relying on retail partners to market his products. The payoff: The company is on track to pull in $1 billion in sales this year, up 33% from last year, and has been profitable for eight quarters, Inouye says. This summer, eMachines elbowed aside Gateway to take the No. 3 position in IDC’s rankings of desktop PC makers, behind Dell and Hewlett-Packard.

Inouye stands a good chance of keeping eMachines’ momentum going. Analysts say anything he achieves with higher-priced PCs will be gravy on top of his successful, fast-growing core business. Large PC players will struggle to sell machines so cheaply. “They offer something you can’t get anyplace else: a low-cost entry-level machine that provides a lot of value,” says analyst Stephen Baker of market researcher NDP Group Inc.

Just goes to show that good management can make a difference in any industry.

Tags: Management

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