Acer was set up in 1976 under the company name Multitech, by Stan Shih, in Taiwan. This family entrepreneurial start up has grown rapidly based on a distinctive culture to become an international global brand competitor. For thirty years, the firm has met many challenges to face in the highly competitive and fast technologically moving computer market.
We can sequence Acer's evolution in three major stages through three decades; Mutlitech, Acer's birth and rebirth under Shih's transformation program during the 1990s, and last but not least the international success giving Acer the third position in global market.
In this case study we will observe Acer's first twenty years, and especially focus on the challenging reconstruction throughout the 1990s. We are going to analyse and understand how Acer has faced the PC competition to become a major actor worldwide. To get a critical view, we will appreciate its distinctive background and evaluate its way to compete.
In the first part, we will analyse Acer's resources and competences, then identify its core competences leading to its competitive position.
Responding to the second question, we will focus on the transfer of Acer's core competencies to support its international strategy, and illustrate by an evaluation of the new Aspire strategic development.
[...] Consequently, the Firm's Infrastructure and its Human Resources embody the activity system under the ‘Global Brand, Local Touch Philosophy' Acer's international competitive strategy and recommendations for the new Aspire development Three strategic perspectives are required to simultaneously achieve to build up a competitive advantage for a company that operates on an international basis: Global-scale efficiency, Multinational flexibility, Learning from its international exposure. Three fundamental tools are essential to develop a worldwide competitive advantage: national differences, Scale economies, Scope economies Acer's Internationalization Process and Strategy Regarding the corporate management, Acer proposes a delegation philosophy to extend abroad. [...]
[...] Shih, founder and CEO, has a strong leadership described as charismatic and pragmatic. Firm infrastructure The main concept illustrating the rampaging dragon is the ‘client server organization model' which coordinates the Acer group. The Taiwan Headquarter acts as a ‘server' that uses its resources (finance, people, and technology) to support the ‘client business units' which control the operating activities. The company operates as a ‘network' developing speed and flexibility as a competitive advantage. The basic assumption lies in the independence of each unit. [...]
[...] Is the development process efficiently using the scale economy potential of the Acer group? Will the hybrid strategy of cost/quality not lead to be ‘stuck in the middle'? Conclusion and recommendations Facing the market uncertainty, we are never 100% sure of the potential success of a new launch. Furthermore, Acer is not yet strong enough to compete with the market's leaders. However, this product exploits and responds to the new Acer's trans- national strategy. For these reasons, it is a risky [...]
[...] Moreover, the ‘Client Server Organization Model' ensures the transfer of Headquarter resources to support ‘Client Business Units' which control key operating activities. Marketing & Sales and Services Acer has developed internationally under the ‘Global Brand, Local Touch' philosophy. Acer is recognised worldwide as an attractive OEM and a valuable brand, supplying high and innovative quality. Acer's market position helps us to understand it. It offers a broad price range, with products integrating new technology and design for a less price than premium prices (e.g. [...]
[...] In-and-Outbound Logistic: The logistic operational management is very well coordinated under the Shih's ‘fast-food business concept'. The fast changes in PC industries product cycle from 6 to 9 months, price) lead Acer to its new model. Hence, small and expensive components with fast changing technology (e.g. software, CPU) are air-shipped from Taiwanese's SBU to RBUs. Less-volatile production (e.g. casings, monitors) are shipped by sea. ‘Stan Shih's Smiling Curve' illustrates the value added within this PC industry's conceptualisation. Under this model implementation, saving logistics, Acer has cut its inventory in-transit from 5 to 2 months and reduced the lead time from 80 to 45 days ( system) which is vital within a fast moving technology of competition. [...]
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