The Acer Group

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This case traces the history of Acer as it builds a multinational from its home base in Taiwan. It explores the difficulties faced by an Asian company in expanding internationally and how Acer has overcome these with innovative strategies. The inherent tension between achieving global scale economies and large responsiveness is also explored.

In the early 80’s the SWOT analysis on Acer Company was as follow: Strengths:
-Leader on the national market
-Low cost structure
-Visionary and charismatic boss
-Innovative and dynamic company Weaknesses:

-No international focus
-Lack of international expertise
-Low level of brand recognition worldwide
-Lack of diversification
-No component manufacturing
-Business friendly home market
-Emergence of the global market place
-High growth potential worldwide for PC’s
-Highly competitive market with competitors having strong brand power -Capital intensive industry due to high tech and short product cycles

Positioning and product strategy:
Acer has positioned it-self as follow: first assembling for OEM, high quality but affordable products. They adopt progressive product diversification: focusing on value added segments and building on global brand. They centralized R&D and manufacturing on value-adding components in low cost countries (economies of scale, low cost structure), they had decentralized and highly independent management along with assembly process, together with local marketing and distribution operations (low inventory cost, just-in-time) and they adopted local politics of joint ventures and partnerships (good knowledge of local markets). They use the ownership strategy by participation of local shareholders: 21 in 21 and the client-server organization. There was...
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