Acer Case
CHAPTER 1 • INTRODUCTION TO GLOBAL MARKETING
33
CASE 1-3
Acer Inc.
A
ISBN 1-256-69396-0
cer Inc. is a leading marketer of notebook and desktop PCs. The company, which posted sales of $21.3 billion in 2010, also produces other products such as the new Iconia tablet. As Taiwan gained a reputation as the “tech workshop of the world,” Acer became Taiwan’s number-one exporter. Stan Shih, the company’s founder, built Acer into one of Taiwan’s most successful companies. Despite Acer’s success, the company had trouble breaking into the American market. In the late 1990s, Shih noted, “In the United States and Europe, we are relatively weak. The local players there are very strong. The problem is that we don’t have good experience in marketing in those regions. It’s a people issue, not a product issue.” Shih discovered that building enterprise brands is easier than building brands in the business-to-consumer market. “Business-to-consumer brands have more value but also face more challenges. People involved in businessto-business are usually rational, but consumers in business-to-consumer are usually emotional in choosing their brands,” he said. In 2000, Shih refocused Acer’s distribution and marketing on the vast, fast-growing China market. He envisioned establishing a solid market base in greater China (mainland China, Taiwan, and Hong Kong) and expanding from there to the rest of the world. “The market in China is very critical for Taiwanese companies to become global companies,” Shih said. “Innovation is not necessarily related to whether you are smart or not. The reality is that if you don’t have a big market it’s not easy to innovate because the return on investment is too low. The potential of China is not just big markets and low-cost labor. Actually, it’s also for highly educated engineers or professionals.” Shih understood the need for Acer to develop a strong brand image in China. “The challenge for this region is really the poor image that is
33
CASE 1-3
Acer Inc.
A
ISBN 1-256-69396-0
cer Inc. is a leading marketer of notebook and desktop PCs. The company, which posted sales of $21.3 billion in 2010, also produces other products such as the new Iconia tablet. As Taiwan gained a reputation as the “tech workshop of the world,” Acer became Taiwan’s number-one exporter. Stan Shih, the company’s founder, built Acer into one of Taiwan’s most successful companies. Despite Acer’s success, the company had trouble breaking into the American market. In the late 1990s, Shih noted, “In the United States and Europe, we are relatively weak. The local players there are very strong. The problem is that we don’t have good experience in marketing in those regions. It’s a people issue, not a product issue.” Shih discovered that building enterprise brands is easier than building brands in the business-to-consumer market. “Business-to-consumer brands have more value but also face more challenges. People involved in businessto-business are usually rational, but consumers in business-to-consumer are usually emotional in choosing their brands,” he said. In 2000, Shih refocused Acer’s distribution and marketing on the vast, fast-growing China market. He envisioned establishing a solid market base in greater China (mainland China, Taiwan, and Hong Kong) and expanding from there to the rest of the world. “The market in China is very critical for Taiwanese companies to become global companies,” Shih said. “Innovation is not necessarily related to whether you are smart or not. The reality is that if you don’t have a big market it’s not easy to innovate because the return on investment is too low. The potential of China is not just big markets and low-cost labor. Actually, it’s also for highly educated engineers or professionals.” Shih understood the need for Acer to develop a strong brand image in China. “The challenge for this region is really the poor image that is