ACER CASE STUDY SOLUTION
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The document provides an overview of the history and growth of Acer from 1976 to 2012. It discusses key events such as Acer becoming the 2nd company to develop 32-bit PCs in 1986. It also outlines Acer's expansion through acquisitions and IPOs in the late 1980s. Graphs show increases in Acer's sales, income, employees and market share over this period. The leadership and management styles of Stan Shih and Leonard Liu who served as CEOs are compared. Finally, the current state of Acer as a global leader in PCs and other technology is presented.
ACER CASE STUDY SOLUTION
- 2. 1 INDUSTRY OVERVIEW 2 BRIEF INTRODUCTION 3 COURSE CORRELATION WITH THE CASE 4 PRE-LIU AND POST-LIU PERIOD 5 STRATEGICAL AND CULTURAL DIFFERENCE 6 CURRENT SITUATION 2011-12
- 9. Phase 2 1987 – 1995 Phase 1 1976 – 1986 Establish A Leading Brand And Go Global Building The Foundation
- 11. 8000 SALES ($M) 7000 NET INCOME ($M) 6000 EMPLOYEES 5000 4000 3000 2000 1000 0 91 94 1976 77 78 79 80 81 82 83 84 85 86 87 88 89 90 92 93 -1000
- 13. 1986 Become 2nd company in the world to develop and launch 32 bit pc
- 14. INITIAL PUBLIC OFFERINGS (IPO‟s) Conducted IPO for Gernal Public Acer raised capital NT$2.2Bn(U.S $88Mn) Shih original 50% equity reduced to 35%. Stock Issued at NT$ 27.5, and traded at NT$47. Soon rose to NT$100 After IPO, 65% equity including Shih’s & employees shares reduced to 25%. Recruit dozen of top level executives and 100 middle level manager Ground troops and Para-troops Lack of International experience & cultural awareness
- 15. 1987 Acquired Counterpoint- Manufacturer Low End Mini Computer Acquired and expand the operations of Service Intelligence Concer-Dismal Disappointment Competitive prices by Dell & Packered reduces the Profit margin from 35% to 25% 1989 Earning per share fall from NT$ 5 to NT$ 1.42 Share Price reduced to NT$ 20 from NT$ 150 Shih decided to hired experienced top level Executives. Leonard Liu signed as CEO and Chairman of AAC Shih stepped down as President
- 16. 1990
- 17. 1992
- 19. 1992
- 20. 70 60 Portables 50 40 Desktops & Motherboards 30 Minicomputers 20 Peripherals & Other 10 0 1988 89 90 91 92 93 94
- 21. 120 100 80 BRAND 60 OEM 40 TRADING 20 0 1988 89 90 91 92 93 94
- 22. 2500 2000 1500 Total Assets, Total 1000 Liabilities & Owners Equity 500 0 1988 89 90 91 92 93 94
- 24. AFTER 1992 Reappoint Shih as CEO Rethink Acer‟s Management policies Considered learning from losses as Investment rather than a waste Continue to pay tuition because long-term profits exceed the cost of education Shih considered Acer‟s Core SBU‟s to Public Acquired 19% shares of Computec “Global Brand, Local Touch” “21 in 21”
- 25. 1993
- 26. 1993
- 28. 1992
- 29. 300 250 200 150 NET INCOME/LOSS T.A AND T.L & OW. EQ. 100 50 0 1990 1991 1992 1993 1994 -50
- 30. 1994 Mike Culver promoted to AAC Director of Product Management Brought idea, “the first Wintel-based PC” Conduct Market research Come-up with “Aspire Pc” having Frog Design Quality innovative product at a less premium price Projected U.S sales of $570 Mn and profit $17 Mn in 1995
- 31. STAN SHIH LEONARD LIU • First targeted niche markets • Focuses on networking • Aggressive International market Expansion Strategy • Strategy thrust • Austerity Campaign • Autocratic Leadership style • Acer 1-2-3 • Introduce Regional • “Global Brand, Local Business Units (RBU‟s) & Touch” Strategy Business Units • “21 in 21” (SBU‟s) • „‟If it doesn't hurt, Help!‟‟ • Tight Control & Lay-offs • Iron-Fisted management style • “By-the-numbers” management model
- 32. STAN SHIH LEONARD LIU • Institute the strong norm of • Reduced management layers Frugality to increase accountability • Delegation of authorities • Established standards for • Employees Education- Intra company „‟think and learn” Communication • Rely on people, win trust & • Productivity & Performance build business around them Evaluation • 4 Values-Statement of • Lavish style adopted by the shared Belief by managers top personnels • Family-run company model • Biased behaviors for the • “Tutors conceal nothing managers from their pupils”
- 33. Q#1 Should Aspire project change it, or put it on hold? Q#2 What implications would his decisions have for the new corporate model, he had been building? Q#3 What are the changes needed in AAC to meet the challenge?
- 34. STRENGTHS WEAKNESS • Strong corporate culture • Paratrooper managers who were not adapted • Employee empowerment with Acer’s culture • Global expansion and diversity • Low cost, low end product manufacturing image • Strong financial position • Acer’s limited capital resources • Strategic alliance for further expansion • Existing coordination problem SWOT OPPORTUNITIES THREATS • Growing industry • Newest Technology • Increasing trend to working at home in U.S market • New marketing and distribution channels conceived • Emerging growing multimedia Notebooks, Netbook by the competitors • Improved brand name • Periods of shrinking demand • Rapid growing interest in internet • Loss of complete control • Fierce Pc business competition
- 35. Degree of Rivalry-High Threat of Substitute- Low Buyer Power- High Supply Power- High Threat of new Entrants- Low
- 37. Benefits of Benefits of Global National integration responsiveness Strong cost control is Aggressive critical to maintain with pricing for ongoing price competition (economies maintaining a of scale/scope) market share Investment in the state-of-the-art Adaptation to manufacturing market changes for the unit cost Inventory and Manufacturing capacity management
- 38. Established Network Integrated Initiate Aspire on Regional rollout Organization Structure starting with the launch in the U.S Continue on client server AAC ownership of the model Aspire project Promote coordination From Cross-BU project between BU‟s management teams Share resources and transfer knowledge between BU‟s
- 40. Integrated network organization structure is critical to Acer both for market responsiveness and Global efficiency Network Coordination between BU’s is essential for Acer as a truly Global company Acer corporate culture is the key to success to such a global company Stan Shih’s leadership is required for the transition period
- 43. CURRENT MISSION- ‟‟Empowering people, empowering technology‟‟ On 2011, Acer acquired U.S based rival Gateway Inc, for U.S $ 710 Million Acer Inc. 2011 primarily financial results consolidated revenues U.S $16.18 Billion with 25% growth
- 44. • EMEA (Europe, Middle East and Africa) in mobile #1 computing solutions #1 • LCD‟s in western Europe #1 • Taiwan in desktop computing solutions #2 • Taiwan in mobile computing solutions #3 • U.S overall LCD‟s shipments #3 • Taiwan in server solutions #3 • Latin America mobile computing solution #2 • World wide mobile computing solution #3 • World wide desktop computing shipments #4 • World wide overall PC‟s shipments #6 • World wide server solutions #4 • Canada overall PC‟s Shipments
- 47. ‘’ Work hard, but make time for Yourself, Your Love, Family and Friends..... Nobody remembers Powerpoint Presentations on your Funeral..... ’’