Winners are rarely asked how they did it. It is one perfect and clean strategy that takes a company to the top. In the entrepreneurial world, everything is all about smooth tricks and excellent business deals. The story of Beny Alagem from Packard Bell is among one of them.
Once a company goes public or launches a new product, it makes a thousand competitors. But, at the end of the day, it is for the customers to decide whose products are better than others. The scenario might look simple but it is always not. Confusions, unclear advertisements and the blurred line between distinguishing companies can often play an ace.
Beny Alagem’s computer hardware company, Packard Bell used alike strategies. In 1986, Beny along with Larry Metz founded the company.
The Story Behind the Name
Does the name Packard Bell ring a bell in your mind? You might have been just going in the right direction. The name Packard Bell came from the American radio set manufacturing company, Packard Bell Corporation.
In 1986, Beny along with some Israeli investors bought this company from Teledyne. The main goal behind forming this company was to provide personal computers at an affordable rate.
The company Packard Bell Corporation was actually founded by Herbert A. Bell and Leon S. Packard in 1933.
Beny Alagem
Born into a family in Israel this entrepreneur was a former tank driver. Beny went to California State Polytechnic University, Pomona. He showed a very interest in computers from a young age and it grew once he attended college.
In his university, he met Jason Barziley and Alex Sandal with whom he planned to open a start-up. The plan worked well and in 1983 they established Cal-Abco. It was a company that exclusively dealt with wholesaling computer hardware.
This gave Beny a clear idea about taking the next big step. And in 1986 he founded the big company. Cal-Abco didn’t go out of business then and the two companies came into some kind of business deal. He served as the Chief Executive and the President of the company for twelve long years.
Some disagreements with the other major stakeholders of the company led him to step down from his post. A year after he left the company he was given the right to AST Research name from Samsung. Resigning from Packard Bell paved his way to something bigger and he started serving as the Chairman of Alagem Capital Group. In December 2003, Beny bought Beverly Hilton Hotel for $130 million and since then his name has been popping up in the business magazines regularly.
Bell Packard’s strategy
An idea is all it takes to unleash your power and sit on top of the world. The motive to build low-cost personal computers was certainly a good one. But, the brand name was certainly better. In the 1990s, Bell Packard earned much profit by playing along with the misconception of customers.
Many companies like Pacific Bell and Bell Laboratories were in business at the same time and this created brand confusion. Instead of being concerned about it the company just went with the flow. Well, we have to admit it was a clever trick.
Growth and Expansion
Once the computers hit the market, the consumption grew exponentially. But, the happy phase didn’t last long. In 1995, another computer company, Compaq sued Packard Bell on the grounds of reusing internal computer parts.
In the same year, the company made an acquisition of Zenith Data Systems from Groupe Bull. But, Groupe Bull and NEC, on the other hand, acquired a bigger stake of Packard Bell. It summed up the company’s value to $4.5 billion.
After a point of time, it seemed like the company strived hard to maintain its position. Because suing by Compaq created a bag image for the company and it was well-exposed not being the chameleon anymore.
The Downfall
Compaq acquired the company in 1996. Packard Bell announced that the losses it faced summed up to $1 billion between 1997 and 1998. NEC tried its best to have the back of the company but it finally decided to cease the company’s U.S market.
Not going too far
The company thought to stay in the market by selling computers at cheap prices. But, they needed to use reused parts and when they did so they lost the reputation for its quality.
In October 2016, a company called PBX Holdings acquired the Packard Bell trademark. And in June 2017 JCPenney announced that it would be selling laptops in the name of Packard Bell as a part of their expansion. But, the company didn’t make a breakthrough yet.
Annasha Dey is an NIT student, who apart from studying engineering is also a content writer. She has a great interest in photography, writing, reading novels, and travelling as well. She is a foodie who loves socializing and hanging out with her friends. She is also a trained Kathak dancer and a big fashion enthusiast. Dey also loves watching TV series, which includes F.R.I.E.N.D.S. and Big Bang Theory. To be a better writer she prefers to read more