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Acer Strategy

By | June 2009
Page 1 of 12
MASTER OF BUISINESS ADMINISTRATION

ACER CREATING NEW GROWTH

Submitted by: STU09971
Course:Strategic Management
Tutor: Colin Price
Course Coordinator:Hannah Moore

Word Count:3063

Critically evaluate Acer's approach to the creation of new growth platforms as a means of achieving sustainable competitive advantage. What do you conclude?

In the light of increased competition in the PC industry, there is a need to capture and maintain market share, not only be profitable but to be sustainable. The Acer Company has over the years moved from being a little known Taiwanese PC maker to being ranked among the world's top five branded PC vendors.

Porter (2008) notes that strategy is about obtaining and maintaining a competitive advantage.

The Acer organisation realised the need to capitalise on skills, technologies, knowledge and other capabilities which were not a part of their organisation and employed strategies which sought out complementary companies with which to form mergers or acquisitions.

In its initial stages, the Acer Corporation's strategic focus was not on competing in existing markets with the global leading PC manufacturers, but on entering relatively uncompetitive markets like Europe and Asia.

To enter the US market, Acer adopted a strategy of acquisitions and acquired Gateway and Packard Bell.

Porter (2008) is strongly critical of the creation of mergers as strategy. He notes that while a merger is a step which is adopted to move an organisation to obtaining a unique position in the market, it cannot be considered a strategy in itself.

With acquisitions and mergers in the PC industry, it means that there is a reduction of product choice being brought to the market and that this would mean that consumers have reduced choice. For example, in the PC industry if mergers and acquisitions cause manufacturers to produce PCs with the same features, it means that consumers technically may be worse off. So...

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