International Business Strategy - Acer, Inc.: Taiwan's rampaging dragon

Résumé du document

Acer was set up in 1976 under the company name Multitech, by Stan Shih, in Taiwan. This family entrepreneurial start up has grown rapidly based on a distinctive culture to become an international global brand competitor. For thirty years, the firm has met many challenges to face in the highly competitive and fast technologically moving computer market.
We can sequence Acer's evolution in three major stages through three decades; Mutlitech, Acer's birth and rebirth under Shih's transformation program during the 1990s, and last but not least the international success giving Acer the third position in global market.

In this case study we will observe Acer's first twenty years, and especially focus on the challenging reconstruction throughout the 1990s. We are going to analyse and understand how Acer has faced the PC competition to become a major actor worldwide. To get a critical view, we will appreciate its distinctive background and evaluate its way to compete.
In the first part, we will analyse Acer's resources and competences, then identify its core competences leading to its competitive position.
Responding to the second question, we will focus on the transfer of Acer's core competencies to support its international strategy, and illustrate by an evaluation of the new Aspire strategic development.

Extraits

[...] I have chosen to split them into 3 categories, joining in- and-outbound logistic, operations and marketing-sales and services. In-and-Outbound Logistic: The logistic operational management is very well coordinated under the Shih's ‘fast-food business concept'. The fast changes in PC industries product cycle from 6 to 9 months, price) lead Acer to its new model. Hence, small and expensive components with fast changing technology (e.g. software, CPU) are air-shipped from Taiwanese's SBU to RBUs. Less-volatile production (e.g. casings, monitors) are shipped by sea. ‘Stan Shih's Smiling Curve' illustrates the value added within this PC industry's conceptualisation. [...]

[...] Hence, it local responsiveness generates new ideas and closer response to local needs. The ‘Client Server Organization Model' defines the role of the Taiwan Headquarter as a ‘server' that uses its resources to support ‘client business units' which control key operating activities. Under its network, speed and flexibility are developed as a competitive advantage. The underlying principle is the independence of SBU and RBU heads, which allows higher profits and the sharing of knowledge, investments and risks. The ‘Fast Food Business Concept' creates new back to the basics initiatives (Uniload production concept, chip up concept). [...]

[...] Acer has learnt to shape its OEM activities and licensing agreements. Furthermore, it shares its technology inside the group and develops the local responsiveness. Acer's competitive advantage is based on a wide-range of multimedia capabilities and innovative integrations such as its voice recognition software, hardware design and audio capabilities resulting in co-operation in Acer's Cross units initiative (e.g. Aspire development). Human resources Acer's HRM can be considered to have strong capacities and a right illustration of the firm's mindset. Here we talk about the ‘poor man's philosophy', ‘management frugality', ‘hands off', ‘Acer 1.2 .3.' and even the ‘laissez faire organisation'. [...]

[...] First, its financial resources were restricted. The activities generated high turnovers; but combined to a low margin rate, the cash flow statement and the debts level were a struggle. Facing the capital constraints, the company had opened to its employees first, and then has become public. Otherwise, Acer would have been unable to sustain its growth expansion and the strategic imperatives of building a brand and maintaining its technological edge. Therefore, Acer has raised $88 million changing its equity Shih's share employees public). [...]

[...] Acer's core competencies: linkages between activities in Value Chain. Acer's core competencies are embodied by Shih's management philosophy, and organisational and business concept set up. We can note a few key cross functional linkages support by underlying processes. ‘Fast Food Business concept' embodies the In-Outbound Logistic / Operations / Procurement using the Uniload production concept for more flexibility, productivity and responsiveness. ‘Client Server organization model' connect Marketing & Sales and Services with Technology Development for speed, flexibility and efficient responsiveness as a competitive advantage. [...]