1. What accounts for Acer’s outstanding start-up? What caused the company to outpace scores of other Taiwanese PC companies?
Acer was established as a company performing multi-sale/service functions. The drive to make profit pushed the founders to grasp every opportunity available which included importing electronic components, providing engineering and design advice to local companies, publishing journals and offering training courses. Despite being capital constrained, Acer had a brilliant start-up and soon it outpaced all other competitors on the Taiwan PC market. Based on my understanding of this case, Acer owes its outstanding start-up to frugality, organizational culture, and a well defined market focus. The CEO implemented and encouraged Frugality as an important business principle which was reflected in the company’s business processes. The firm leased just enough space for current needs. Their products were priced with a low profit margin to ensure quick turnover. This was done to avoid tying up its revenue in debt and receive cash quickly for further reinvestment into the business. Hence, the business is able to avoid unnecessary costs and maximize the use of its capital. The organizational culture of the firm is closely kitted and encouraged delegation of decision and employee accountability. In Taiwan, the patriarch-dominated, family-run company model was most common but the CEO of Acer encouraged the delegation of decision making to his employees, thus, trusting them to act in the best interest of the company. This “hand-off” style was a strategy to harness the natural entrepreneurial spirit of his employees. Another culture of the company is the commitment to the education and grooming of its employees. Mangers were responsible for the learning process of their subordinates, hence, creating a family-like work environment. The choice of Acer’s target market was also very instrumental in its outstanding start-up. Since Acer does not have as...
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