Assignment # 1: Case Study 1: Acer Case
Course Title: International Marketing (MKT505)
Acer’s strategy has been described as “divide and conquer.” Compare and contrast this to Lenovo’s strategy
Acer is a global corporation headquartered in Taiwan. The company’s products include desktop PC’s, laptop PC’s, tablets, monitors, and smartphones. Acer is a brand of the Acer Group which also owns Gateway, eMachines, and Packard Bell. The Acer Group’s long-term mission is to break the barriers between people and technology through the creation of empowering hardware, software, and services (Acer Group - The Brands, 2013). The company believes the four different brands provide the company with different characteristics that allow them to target different customer needs in the global market. Acer is currently ranked the fourth largest computer maker in the world. The company has over 8,000 employees and had sales of $15.7 billion dollars in 2011 (Acer Group - Overview, 2013).
Lenovo is anther global corporation that operates with centers of excellence versus a traditional headquarters model. The large centers of excellence are housed in the United States, China, and Singapore. Lenovo is very similar to Acer as they too manufacture desktop PC’s, laptop PC’s, tablets, monitors, servers, workstations, and accessories. The company’s long-term mission is to become the leading personal technology company in the world (Lenovo – About Lenovo, 2013). Lenovo is currently the second largest computer company, has over 26,000 employees, and sales of $21 billion dollars (Lenovo – About Lenovo, 2013).
Both Lenovo and Acer have enjoyed successes but have utilized different strategies in order to get there. The Acer Group adopted a divide and conquers type of strategy while Lenovo has adopted the strategy of developing and succeeding locally before going globally. In both cases, each company struggles with worldwide recognition. In the case of Acer, they decided to try and improve their recognition through acquisitions of brands such as Gateway and Packard Bell. Lenovo also decided to improve recognition by acquiring IBM’s ThinkPad business.
To say that one company is doing it right and the other is doing it wrong is not a simple decision to make. Each company has a strategy that they are utilizing and both are seeing increases in sales and market share so they are doing something right within their own strategies. A person could make the argument that Lenovo’s strategy is better because they are ranked number two and Acer is ranked number four in PC manufacturing. A company could be successful with either strategy but I do believe if the company cannot successfully support their strategy it will ultimately fail. I think Acer’s divide and conquer strategy is good and their decision to acquire companies such as Packard Bell and Gateway helped support their strategy. I also like the Lenovo approach that decides to master something in their home market before taking it globally. If I had to pick one strategy over another I would pick Lenovo’s. I think it’s better to put your best effort forward rather than spread out and hope multiple people in multiple places all put their best effort forward. This to me is a more conservative approach but it is the one I would ultimately choose in order to build my brand.
I personally thought that Lenovo and Acer were more “generic” brands of computers even prior to working on this assignment. When I was in the market for a laptop a year ago, I saw both Lenovo and Acer in the stores and stayed away from them because I never heard of them before so I assumed they were junk. No matter which strategy either company uses, they each have a significant amount of work to do in order to improve their brand recognition in the United States. Explain how the global markets-local markets paradox figures in to Stan Shih’s strategy for China The idea of thinking globally and acting locally is...
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