Changing The Course At Acer
- 2. Basic Information CEO Mr. J T Wang Slogan “Empowering People” Area served Worldwide Founder(s) Stan Shih et al. Founded 1976 as Multitech It is now the third biggest player in the world following HP and Dell Net Income US$384million(2009) Founded 1976 as Multitech Revenue US $17.9 billion (2009)
- 3. •However, the company went through many hurdles and adversities during its development •The company was conceived by many as another "Taiwanese PC cloner” •The late 1990’s brought internal and external changes that had a devastating effect on Acer •Hiring of Leonard Liu •Ever changing computer industry •Sales rose from $530.9 million in 1988 to $977 million by 1990 but its profits dropped from $26.5 million to $3.6 million
- 4. Acer’s first change in course (late 1990’s) Companies such as Dell built cheaper yet more powerful PCs, Acer lost share in the U.S. market. “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. Three innovative business organizational strategic decisions were implemented :-
- 5. 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.
- 6. 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.
- 7. Second change in course (2001-2003) Business environment changed. Acer needed to re- invent itself. 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. Following strategic decisions were taken:-
- 8. 4. Forward looking : Growth opportunities beyond the personal computers. 3. Focus resources on profitable regions and product lines. 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.
- 9. Subsequently, Acer was restructured in 2001 into : WISTRON : Dedicated to the design and manufacture of PC’s and related IT products for OEM customers ACER INC. : Focuses on selling and marketing of computing and consumer electronic product of Acer brand BENQ : Designing, manufacturing and marketing of computing communication and consumer electronic products Collectively these three companies are now called PAN ACER Group
- 10. 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
- 11. Decision making at Acer According to Shih at Acer : “Everybody can be a little boss. From the beginning decision making is empowered and decentralized. Even the head of a small department can make major decisions. THIS IS OUR WAY.”
- 12. 6 C’s of decision making • Construct a clear picture of precisely what must be decided a list of requirement that must be met• Compile information on alternatives that meet the requirements• Collect alternatives that meet the requirement• Compare the “what might go wrong” factor with each alternative• Consider to a decision and follow through with it• Commit
- 13. Strengths • Global expansion and diversity • Healthy financial status SWOT analysis Weaknesses • Cultural differences between its national and international staff • Low-cost, low end product manufacturing image • Low brand awareness • Constant emphasis on R&D • Wrong strategic decision
- 14. Opportunities • Cost effective Threats • Competition • Cultural differences• Tax advantages and government funding
- 15. 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.
- 16. •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.
- 17. Thank You Presented by :- Anu Arora Harpreet Kaur Reema Puniani Shweta Sharma