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Graphic Lessons from Silicon Graphics

BLUNDER: Set overly ambitious sales goals, aiming to grow 50% a year

SOLUTION: Lowered expectations to 20%, closer to the growth of the high-end market

BLUNDER: Pursued glittery markets such as interactive TV that fizzled, while ignoring the inexorable rise of PCs

SOLUTION: Refocused on fast-growing markets such as telecommunications and started work on PC-based workstations

BLUNDER: Built inadequate business processes like inventory management and demand forecasting, leading to product shortages and angry customers

SOLUTION: Stopped shooting from the hip and started putting in systems, from quoting an order to scheduling manufacturing to collecting payments

BLUNDER: Cray Research acquisition sapped management energy from more pressing problems such as getting products shipped out on time

SOLUTION: Consolidated all manufacturing and engineering operations under one person, Executive Vice-President Robert Ewald

BLUNDER: Went for higher margins instead of market share, leaving it struggling for scale against IBM, HP, and Sun

SOLUTION: Focused on niches such as data mining and massive corporate databases, where ultrafast computing is critical

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Updated July 25, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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