Debora Venancio Panther ID: 2247062

CASE: Acer, Inc: Taiwans Rampaging Dragon

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Acer, Inc was started in 1976 as a company originally named Multitech by Stan Shih, his

wife, and three friends. Shihs vision was one to reach global success even if that meant it would be a difficult journey to do. However there were a few contributing factors that helped in assisting Acers impressive start-up. Acer focused on taking advantage of every opportunity. They decided from the early stages of the business to constantly be innovating and creating new strategies to stay ahead of their competition. One of the ways they did this is by providing product design advice to local companies, importing electronic components, offering technological training courses, commercializing the microprocessor technology, and publishing trade journals. The second factor that contributed to their startup was to set high tech products with low margin in order to get better turnover. Another factor was the establishment of the Acer 1-2-3, which focused on who had most value to the company. In 1st place was the customers followed by the employees. Acer believed their employees held great value to the company. They even encouraged them to provide ideas and suggestions. Their type of management style was decentralized which enabled more freedom without so much control. In 3rd place were their shareholders. By having this order of priority it enabled them to stay focused on giving the customer what they needed and providing better products with a great value which made the company grow. The fourth factor that contributed to their start up was Acer worked with joint ventures in order to expand their sales. By doing so, this helped Acer gain more

information on diverse regional markets and enabled sales to increase without added risk of needing more capital or labor. There were many other additional factors that helped Acer to excel however theses are the most notable. Leonard Liu was hired from IBM to be Acers president during one of the toughest

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moments for the company. Lius value to Acer could be described as paving the way for future leaders of the company and even the industry. He helped formulate the fundamentals of the business such as upgrading Taiwans industry, establishing brand name products, and international marketing. He trained and prepared for the second-generation executives and made great contributions to Acer. However, Liu tried to centralize control of Acer. Due to his drive of total control it led Acer into making a string of very costly acquisitions forcing Acer to cut over 400 jobs. He destroyed the management structure and made rapid non-though out decisions which almost cost them the business. In some areas he helped the company grow but overall he did more harm then benefit Acer. Acers global market presence was slowly falling short to its competitors. They were in

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need of a new strategy to get up to date with the ever changing computer technological world. They decided to develop the Aspire project. This was a transnational innovation because they wanted to configure a product that would appeal to diverse consumers and be competitive around the world. While some products could be up to date in Southeast Asia it could be a year out-ofdate in the United States. In order for them to do this they knew even though they had the capability to develop the products new technical features, they were equally sure they would have to go outside to get the innovating designs they had envisioned.

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Shihs Aspire project was one which brought fourth much hope and criticism with it. In

one hand it had the potential of becoming Acers first global blockbuster product, while in the other hand it was a high risk and expensive market to try to rely so much of the companys future on. Acer also ran the risk of having their competitors establish their own multimedia home PCs releasing it prior to them. The company was in a state which it was developing too fast without adequate control. The overall cost to continue with the Aspire project would be very high, and the return for this investment was still uncertain. It seems to be too much of a risk for Acer to be taking on at the present time.