The Road to Becoming a “Giant Lion”-Asustek Computer Inc.

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The Road to Becoming a “Giant Lion”-ASUSTek Computer Inc.

Chyong Ling Judy Chen
Department of Economics
Feng Chia University
100 Wen Hwa Road,
Taichung, Taiwan
Tel: 04-24517250 ext. 4482
Fax: 04-24518737
clchen@fcu.edu.tw

Abstract

In Taiwan, small businesses account for about 97% of all firms. Though many people use the terms “entrepreneur” and “small business owner” synonymously, there are significant differences between them. Small business owners pursue profit, but often at a slow pace. Entrepreneurs create substantial wealth, often at rapid speed and take high risks to pursue ideas and opportunities that often involve substantial innovations beyond what a small business owner might exhibit. The CEO of ASUSTek Computer Inc.(ASUS) exhibits these characteristic.

Taiwan’s economic miracle extended to the IT industry after 1990. ASUS was founded on April 2, 1990 by four engineers with capital of NT$10 million. Its total revenue has reached NT$800 billion and market capitalization was NT$49 billion as of December 31, 2007 (US$1=NT$31.5). ASUS’ business significantly took off after Jonney Shih joined the company as CEO in 1994. He is a key anchor of ASUS.

This paper will discuss how entrepreneurial character and beliefs formed ASUS’ culture and their impact on the development of the company’s strategies in business and finance, as well as ASUS’ innovations in marketing and products, leading the company to become a “giant lion” in the computer industry.

Keywords: ASUS; Entrepreneur; Business culture; Innovation

1. Introduction

Taiwan’s economic miracle extended to the IT industry after 1990. Taiwanese IT companies manufacture a diversity of 3C products for the global market (Table 1). Taiwan plays an important role in the world IT industry and is well known as the “Silicon Island.”

Table 1 Taiwan’s IT products, world market shares, and sales amounts |World Rank |Product |World Market Share |Sales Amount (NT$ billion)| |1 |Chip foundry services |70% |8.9 | |1 |Notebook PCs |72% |22 | |1 |LCD monitors |68% |14 | |1 |PDAs |79% |1.8 | |2 |Servers |33% |1.8 | |2 |Digital cameras |34% |2 |

Data: Market Intelligence Center, Industrial Technology Research Institute

Actually, Taiwan is a small business-dominated economy. Small businesses (100 employees or less) account for about 97% of all firms. The average life of small business is 13.3 years[1]. The advantage of small business is its flexibility in weathering adversity such as the Asian financial crisis in 1997. Yet, it has the disadvantage of limited growth due to financial and technological constraints.

Many people use the terms “entrepreneur” and “small business owner” synonymously. While they may have much in common, there are significant differences between these two roles. Small business owners generate an income stream, often at a slow pace. Relatively, entrepreneurs create substantial wealth, often at rapid speed. Entrepreneurs also take high risk to pursue ideas and opportunities that often involve substantial innovations beyond what a small business owner might exhibit. ASUSTek Computer Inc.(also known as ASUS) fulfills these requirements.

This paper will discuss how entrepreneurial character and beliefs formed ASUS’ culture and their impact on the development of the company’s strategies in business and finance, as...
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