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Changing Course at

Acer went through several changes in course over the decades as the business environment and its competitors evolved. In the late 1990s, as Dell began offering cheaper yet more powerful PCs, Acer lost US market share. In response, Acer implemented a decentralized "21 and 21" strategy and client-server structure to increase entrepreneurial drive and competitiveness. In the early 2000s, Acer again restructured as computer companies were hesitant to use it for manufacturing; it split branding from OEM business and focused on profitable regions. Acer was reorganized into Wistron, Acer Inc., and BenQ to separately handle manufacturing, sales, and new product development. Acer has continually adapted its strategies and organization

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Sarath Yarramalli
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42 views

Changing Course at

Acer went through several changes in course over the decades as the business environment and its competitors evolved. In the late 1990s, as Dell began offering cheaper yet more powerful PCs, Acer lost US market share. In response, Acer implemented a decentralized "21 and 21" strategy and client-server structure to increase entrepreneurial drive and competitiveness. In the early 2000s, Acer again restructured as computer companies were hesitant to use it for manufacturing; it split branding from OEM business and focused on profitable regions. Acer was reorganized into Wistron, Acer Inc., and BenQ to separately handle manufacturing, sales, and new product development. Acer has continually adapted its strategies and organization

Uploaded by

Sarath Yarramalli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Changing course at

Basic
Information
Founded

1976 as Multitech

Founder(s)

Stan Shihet al.

CEO

Mr. J T Wang

Headquarters

Xizhi,Taipei
County,Taiwan

Slogan

Empowering People

Area served

Worldwide

It is now the second biggest player in the world following


HP and Dell

However, the company went through many


hurdles and adversities during its development.
The company was conceived by many as
another "Taiwanese PC cloner.
It began to implement a series of robust global
strategies which Shih hoped would push the
company onto the international business arena
such as acquiring American computer firm and
hiring former Chairman of IBM's software
development laboratories in California Leonard Liu.
This strategy has letter proved to be a failure
since the company saw a decline in 1990s.

Acers first change in course (late


1990s)
Companies such as Dell built cheaper yet more
powerful PCs, Acer lost share in the U.S. market.

Three innovative business organizational


strategic decisions were implemented :21 and 21 strategy :
Creating decentralized 21 public listed companies
each with significant local ownership by 21st century.
Insuring strong entrepreneurial drive growing revenue
and reducing cost.

Client-server structure :
Each of the 21 Acer group would be a SBU or RBU.
Each business unit would treat other as partners
through direct exchange relationships not through
central planning through head quarters. Leading to:
1. Insuring the competitiveness of each entity.
2. Leveraging the collective strength of the closely
knit business network.

Fast food Business model :


Shih decided that all PC should be assembled close to
the customers, just like fast food so as to
1. Minimize the risk exposure of technology.
2. Covering the risk regarding price sensitive key
components.

Second change in course (2001-2003)


Business environment changed. Acer needed to
re-invent itself.

Following strategic decisions were taken:1. Split the brand business from the OEM
business.

Why?

Computer companies hesitant to hire Acer to make


their computers.
Focusing on fewer products and fewer industrial
customers.
Selling services and technologies in Asia a
potentially huge and lucrative market.

2. Introduction of the first tablet PCs, which was


a smart idea considering that in many Asian
countries, including China, their written
language does not easily lend itself to use
with a traditional keyboard.
3.

Focus resources on profitable regions and


product
lines.

4.

Forward looking : Growth opportunities beyond


the personal computers.

Subsequently, Acer was restructured in 2001


into :
WISTRON : Dedicated to the design and
manufacture of PCs and related IT products for OEM
customers.
ACER INC. : Focuses on selling and marketing of
computing communication and consumer electronic
product.
BENQ : Designing, manufacturing and marketing of
computing communication and consumer electronic
products.
Collectively these three companies are now called
PAN ACER Group.

Concept of decision making :


It is a mental process resulting in the selection of a
course of action among several alternatives.
It is regarded as a continuous process integrated in
the interaction with the environment.
Every decision making process produces a final
choice.
The output can be an action or an opinion of
choice.

Decision making at Acer


According to Shih at Acer :
Everybody can be little boss, from the beginning
decision making is empowered and decentralized.
Even the head of a small department could make
major decisions. THIS IS OUR WAY.

6 Cs of decision making

a clear picture of precisely what must be


decided
Construct
Collect information on alternatives that meet the
requirements
Compile
a list of requirement that must be met
Commit
to a decision and follow through with it
Compare
alternatives that meet the requirement
Considerthe what might go wrong factor with each
alternative

SWOT analysis

Strengths

Weaknesses

Global expansion and diversity Cultural differences


between its national and
international staff
Unique channel business
Healthy financial status

Flexibility
Constant emphasis on R&D

Low-cost, low end


product manufacturing
image
Low brand awareness

Opportunities

Threats

Improve brand name

Newest technologies

Broad product base

Loss of companys contro

Tax advantages
and
government
funding

Expansionism.

Inferences
Proper global strategies and a sufficient
consideration of cultural differences are crucial
for the survival of multinational companies like
Acer. To compete globally is no easy thing.
Acer has shaped and continued to reshape its
business strategies and organizational
operations to cope up with the rapidly changing
global business environment and evolving
internal organizational dynamics.

While Acer is going to gain a pretty strong foothold


on the computer market in the global market
thanks to Shih's vision, it is also planning to
launch new products such as TV, phones and
office related equipments.
While Acer's major revenue is likely to be still
generated from PC selling. We believe that such
new steps will open even wider market for Acer to
deliver on new frontier in the new century.

Thank You
Presented by :Anu Arora
Harpreet Kaur
Reema
Puniani
Shweta
Sharma

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