TABLE OF CONTENTS 1. Introduction 2. Acer’s History & Key Dates 3. Mission & Vision 4. Objectives of Acer 5. Macro Environment Analysis (PESTEL Analysis) 6. SWOT analysis 7. Ansoff Matrix 8. Porters five forces 9. Porter generic 10. Segmenting, Targeting and Positioning 11. Value Chain INTERNATIONAL BUSINESS CASE STUDY November 2010 2 12. Boston Consultancy Group (BCG) 13. Attack & Defense Strategy 14. Corporate social responsibilities & Governance 1. Introduction The Acer Group is a family of four brands -- Acer, Gateway, Packard Bell and eMachines. This unique multi-brand strategy allows each brand to offer a unique set of brand characteristics that targets different customer needs in the global PC market. Today, the Acer Group still strives to break the barriers between people and technology. It ranks No. 2 for total PC shipments and No. 2 for notebooks, and has a global workforce of 7,000 employees. Acer grew worldwide while simultaneously minimizing its labor force by identifying and using marketing strategies that best utilized its existing distribution channels. Revenue rose sharply from US$4.9billion in 2003 to US$11.31billion in 2006 and 2009 revenue reached US$17.9 billion. The successful mergers of Gateway Inc. (2007) and Packard Bell Inc. (2008) by parent company, Acer Inc., complete the group's global footprint by further strengthening its presence in the U.S. and Europe. (www.acer-group.com/public/The-Group/overview.htm) Acer’s product range includes PC notebooks and Desktops, servers and storage systems, monitors, peripheral devices, digital devices, LCD TVs and e-business solutions for business, Government, Education and home users. Acer today focuses on marketing its brand-name IT products around the globe. Wielding a profitable and sustainable Channel Business Model (CBM) Acer has been able to achieve sustainable growth worldwide. The model offers flexibility to adapt to changing global IT market trends, and involves collaborating with the industry's top-tier partners and suppliers. We expect the foundation of the CBM shall enable Acer to reach further success, minimize operating expense and enhance profitability. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 (www.us.acer.com/acer/about_us.do? LanguageISOCtxParam=en&ctx2.c2att1=25&CountryISOCtxParam=US&ctx1g.c2att92=453&ctx1 .att21k=1&CRC=3529792491) 2. History Phase: 1 - 1976-1986: Commercialize microprocessor technology In its first ten-year stage of development, Acer established a corporate culture based on the founders' firm belief in "the goodness of human nature." This belief was exemplified by the offering of stock to all employees. During this stage in Acer's history, the company significantly contributed to the popularization of computers in Taiwan. Phase: 2 - 1987-1995: Establish a leading brand and go global In 1987, Multitech formally became known as Acer, marking the start of Acer's efforts toward creating a strong brand name. During this second ten-year stage of development, Acer grew extensively and expanded both strategically as well as geographically. The company grew to be ranked 8th largest PC brand in the world. Phase: 3 - 1996-2000: Offer fresh technology for everyone, everywhere During the company's 20th anniversary celebration, the third stage of development was launched, including basic goals for technological innovation and simplification of operations. Top priority was placed on delivering the freshest, most affordable technology for the benefit of consumers worldwide. Phase: 4 - 2001-beyond: Transform from manufacturing to services INTERNATIONAL BUSINESS CASE STUDY November 2010 2 1983: Acer begins manufacturing PC clones. breaking off several operating units. 2000: Acer restructures. Uruguay. Acer has evolved from a manufacturing powerhouse to a globally recognized computer brand. (www. marketing world-class IT products and services.blogspot. Panama. Thailand. (saowalakacer. Inc. 1995: Acer is top selling PC brand in Mexico.Since the company's founding in 1976. J. 1981: Multitech is renamed Acer.T. Wang is named CEO and Gianfranco Lanci becomes president. 1998: Company reorganizes into five units. 1996: Acer expands into consumer electronics. and Taiwan.answers. 1994: Acer Computer International (Asia-Pacific distributor) completes its initial public offering (IPO).html) Key Dates: 1976: Multitech International is founded by Stan Shih and four others. 1988: Acer Incorporated goes public. contract manufacturing spins off to become Wistron Corporation.com/2010/07/about-acer. 2005: Stan Shih retires. 1991: Acer posts its first loss. Bolivia.com/topic/acer-inc) INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . 2003: Acer becomes the world's fifth largest PC maker. Philippines. Chile. Mission & Vision The vision of the Acer Group to become “A leading branded company empowering and enriching people through innovation and customer care. low-risk technology that is affordable to everyone.com/2010/07/about-acer. dependable products that meet our customers’ needs has led to the creation of our unique Empowering Technology. namely. reasonably priced." Fresh does not imply new but the best.blogspot. everywhere. Empowerment through hardware.com/public/Sustainability/sustainability11. everywhere.brandingasia.” gets closer to reality when all of us contribute to the common purpose of “Breaking the barriers between people and technology. Fresh also refers to innovation based on mature technology that is user-friendly. and enjoyed by everyone. (www.htm) Acer’s long-term mission is to break the barriers between people and technology. (saowalakacer. and has a long lifespan. proven high-value. software and services – that’s the Acer brand promise.com/cases/case1.3.html) INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Our commitment to developing easy-to-use.” (www.acer-group. designed to ensure that our customers receive the full benefit of each and every technological breakthrough.htm) The new corporate mission statement is "Fresh technology enjoyed by everyone. com/public/The_Group/organization. the channel. The objectives are clear: avoid brand overlapping and communicate coherently both internally and externally (to employees.acer-group. "These recent acquisitions are strategic both in terms of business and market positioning. Gateway and Packard Bell are three distinct identities of a single group whose objective is to expand the variety of its product range. Acer group have developed over time with their own unique customer base. Objectives of Acer The company’s goal (September 2009) is to become the world’s number one netbook vendor. conserving therefore the individual identity and personality of each brand. The three companies will integrate INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .Organizational Structure (www. end users and investors) while maintaining the identities of the companies unaltered and increasing the overall user base.htm) 4. Acer. c2att92=122&ctx1.com/acer/news_detail.att21k=1&CRC=79693352) 5.do.public_a _14b? LanguageISOCtxParam=en&sp=page8e&ctx2.c2att193=15874&CountryISOCt xParam=AU&ctx1g." (www.their own unique experience and abilities to offer a broad range of products that allow customers to find the right solutions for their uniquely personal needs.c2att1=92&kcond9.acer.jsessionid=E15883A09FDE48BEB6E14EA6B7896276. Macro Environment Analysis (PESTEL Analysis) INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . The Macro Environment Analysis is the first step of a strategic analysis. Changes in these PESTEL factors are more complex for some organizations than for others. Organizations exist in the context of a complex political. technological. The political situation of Taiwan has also been challenged due to the high influences from Chinese government due to acquiring some of the Taiwan territories back to main land China which might be directly effecting on Acer which originated from Taiwan. Because IT related products are none to essential commodities at the time of making priorities at the times economic crisis. Because Acer has manufacturing plants in China as well and China has become very important market base for Acer as well. technological. PESTEL framework helps to recognize how future trends in political. predicted is that "China will likely emerge as one of the world's largest manufacturing centers as it integrates into the world economy. How this affects the organization could include an understanding if historical and environmental effects. an organizations strategic capability and the expectations and influences of stakeholders. Political Factors The World political matters such as affecting the spending power of the people will be having a major influence upon the regulation of Acers business as it has become a popular international brand. Taiwan will likely become an upstream supplier for China's massive manufacturing production and gain more economically by further integrating its economy with China via a "Greater China" free-trade area (FTA) after its WTO entry." INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . It also helps to understand the interconnectedness of the environmental factors. environmental and legal environments might impinge on globally and provide the broad data from which the key drivers of change can be identified. economic. Understanding the strategic position is concerned with identifying the impact on strategy of the external environment. it is also referred to as PESTEL analysis. Due to higher growth in Acer might impose trade barriers by USA & Europe for Acer in order to protect the local brands in the region. social. social. Many of those variables will give rise to opportunities and others will exert threats on the organization or both. Based on China’s accession agreement with and World Trade Organization (WTO) accession on trade and economic relation across the Taiwan Strait. economic. as well as expected or potential changes in environmental variables. environmental and legal world. It will further reduce the cost of vertical integration among manufacturing industries across the Taiwan Strait and enable both China and Taiwan to become stronger competitors in the global manufactured goods market. has the privilege of higher bargaining power with its suppliers at the time of purchasing essential raw materials. Due to multi brand strategy most of the products are manufactured in the same region which will help to improve the lead times & reducing the cost of transportation. Dollar (USD) accounts constitute 90% of Acer’s expenses compared to 20-25% of its revenue. Since mid 2008. Hence the sales will be better and also easy to become market leaders with the reliability. U. Inflation. so the company benefits from a depreciating USD. The Euro (EUR) accounts for 40% of Acer’s annual revenue. Also due to buying power Acer can demand on suppliers for shorter lead times on accessory supply which also directly supporting to enhance speed of availability of the goods in the market. the Taiwanese dollar (TWD) has appreciated markedly against the US dollar. so an appreciating euro would benefit the company’s bottom line. It is very important that such factors are considered. Acer has become market leader in providing low cost Lap tops might bring an impact on status in upper and middle customer segments. Also this will be a right approach to ever changing market requirements. currency depreciation and appreciation of certain economies will affect the product sales. Acer might be challenged by customers who have negative mindsets at reliability on Taiwan brands than their own regional brands. cultural difference influences the growth of the company greatly. For a multinational company like Acer. Due to large scale manufacturing at Acer.S. Social Factors: Being a Taiwan product. The social and cultural influences on business vary from country to country.Economic Factors Currently Acer has a large manufacturing base in china and which the overall cost has reduced which will help to become a status of cost leaders in IT & peripheral industry. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . where Acer should look in to protection of products which are dying due to this reason. Consumers might be confused by the firm's too wide range of products. The global IT landscape is ever changing with new products and inventions being introduced every day. Also it is Acer’s responsibility to consider in having alliances with social complained partners. And Acer's innovation strategy has a significant relationship with cross-functional cooperation and NPD (new product development) performance. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . In order to maintain the ethical standards of the organization. Acer as an Asian high-tech company can produce newest. Ex: Walmart in Germany Technological Factors Technology is vital for competitive advantage. Hence legal clashes of this nature are not uncommon in this area of IT due to technological over laps. Hence this a high cost expenditure. Since the Europeans are more in to Green products they might reject some of Acer products. it is very must important that organization runs with good HR practices. the competition facing Acer are ever fierce. Competitors can copy Acers technology and they can have a second move advantage making better products. and is a major driver of globalization. For innovation strategies have proved the importance of NPD development. Legal Factors Acer has been brought to lawsuit by its rival HP due to infringing its patent including power management in notebook. Certain cultures don’t accept cheaper products. It is especially true for IT industry whose growth is by a large extend dependent on technology innovation and advancement. They can have a negative impact on developed market and also can gain higher growth revenues in European market. niftiest gadgets to the market where there more demand to high-tech fashion. SWOT analysis Strengths Laid back approach of Acer shows patience. There can be situations that governmental actions on anti-trust and market power issues such as Monopolistic situations. Lawsuit could be bought under Acer due to technology from competition to hold their growth. Since that time Acer has strengthened their corporate competitiveness by adopting a unique Channel Business Model. which allows firm control of brand name. and service capacity. The model also permits better INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . 6. technology and products. . marketing.In 2000 Acer began the transformation to marketing and service of IT products. global logistics. it has "joint ventures with local partners. low-end product manufacturer was damaging to the INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Acer has many innovations like the Aspire One laptop that let the user connect to the net almost anywhere with 8 hours of battery live.. and it is able of satisfying demand by using national suppliers. Image of Taiwan as low-cost. employing more than 16. its subsidiaries constantly update relevant market information with the aim of acting when new products or market changes are required. extensive global sales.. Weaknesses Inexperienced international managers and cultural differences between its national and international staff lead to inadequate access to distribution centers. As a result. "Outsiders sometimes found difficult dealing with the intricacies of Acer's organization" and "People from advanced countries tended to feel they knew better than headquarters".700 staff from 50 different nations". and IC design. Competitive advantages lie in its brand management strength.responding to the trend toward increased dispersion and local autonomy". Furthermore. Acers price its products with low competitive prices to compete with the strong rivals and acquire the low-priced laptop market share. Acer's flexibility also lies in the products that they market and service. Acer is the largest manufacturer of mobile phones in Taiwan. Thanks to this.. "The group was operating 80 offices in 38 countries around the world. Faster decision making can mean short turnaround time. marketing network. Acer's global expansion and diversity has spread its subsidiaries throughout the world. Furthermore. Acer can offer the newest products before any other company. Acer is flexible because it acts in many different countries depending on specific characteristics. Acer ranks the world's fourth largest PC brand in 2005. "The turnaround time from idea to market dropped to only one or two months" "The high turnover aided Acer in achieving a 34% return to equity". system implementation. Acer presented the Tempo Smartphone series in 2009 to compete in the lucrative mobile phone market. "This structure allowed for faster decision making".understanding of consumer demand and profit sharing among partners. and is working aggressively to secure third place by 2007. "The flexible client server business model. Acer main factory is located in Taiwan which has low-cost labor and distribution advantage in the US market and Asian market.to develop into a publicly traded local company in various different countries while maintaining a global brand" Flexibility allows market penetration faster than the competition.. The laptop customers expect new functions and improved computing power at least once every year. Taiwanese industry is perceived as not as a quality products supplier. Using its broad product base puts Acer in a good position because of the current convergence of the computer and consumer electronics markets. The strength of Acers size and flexibility will allow the company to adapt to the rapidly changing computer industry. Even thought the company wants to direct its strategy towards being an international IT distributor. Opportunities Improve Acer's brand name awareness.. This success will help Acer to integrate its existing assets or set up new manufacturer to producer eReders or similar products that does iPad functions. The company is still suffering from low brand awareness in the US despite its topten position. Acer can also compete in the Asian market by using its low price model. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . it has the option to come back to its origins if the situation is bad. The PC.name and image of Acer. ". Rebranding will help Acer to improve brand name awareness. Acer might confuse consumers with too broad of a range of products. Acer would be a good competitor in the eBook Reader market and had the ability to enter a new market of acquire an existing manufacturer. The company is in a good position for creating a well-known brand name in all its markets because it has developed structures throughout the markets. For instance: "Taiwan's reputation is for low-end products".Acer always retained the option of returning to being a supplier of components and systems sold by the big brand names". Innovations and changing market demand needs strong and flexible supply chain to execute the successful innovations and deliver them to the market before the competition. . Acer had competed on delivering a reliable PC’s and laptops at a competitive price. laptop and mobile phone markets are extremely competitive and require frequent innovations to keep up or exceed the customers’ expectations. Similar market entry model would be useful to enter the eBook Reader market and the iPad market. Contributing to the low brand awareness. . Example: Lenovo The company's structure is arranged for a possible return to its roots . emachines and packard bell. This affects company's quality image. "The use of joint ventures to build international capability . "Consumers could not believe a Taiwanese company was capable of sophisticated technology" and "Made in Taiwan" had a low quality and low price perception . and help raise awareness of the Acer brand". The Asian market is huge and would consume many of Acer’s products if marketed well.. Acer was successful in acquiring Gateway. .5% of a listed company in Taiwan". "Without majority control some questioned whether he (Shih) could maintain his hold over the group" Increased competition due to the movement toward disintegrated computer components. There is a possible expansion barrier due to Acer's philosophy to spread its shares throughout all its subsidiaries and partners..no foreign institution permitted to own more than 7. This creates a high awareness among the companies that want to produce the newest products in the shortest time. Lose of company's control is a negative consequence of Acer's share philosophy and the company's chief could lose control.and Acer cannot compete on its own in these markets". "North American and European markets are dominated by "big guns" like Intel and IBM . The risk of substitute in the market is high because the competition is always developing new kinds of technologies which can be a substitute of the current products. the company could have problems of expansionism.Threats The laptop and PC market are extremely competitive. Threat could be dyeing pc market and the mobile devices are becoming more powerful and more faster and trying to imitate pc technology INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . "Taiwan enforced strict protectionist barriers against outside capital. Ansoff Matrix INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .7. Ansoff matrix was used to identify the strategic direction of Acer Inco. Scholes & Whittington. video telephones. Gianfranco Lanci announces that Acer will launch 4 new smartphones & a series of "Internet Devices" by the end of May 2010 which will run version 4. and other devices in order to boost global market share. Scholes & Whittington: 2005). Strategy Development Directions. Ansoff’s Model (Source: Johnson. Significance of this matrix is that in practice. Market Penetration – Concentrates on protecting and building an organisation’s current position (Johnson. 2005). In 1996 the company expanded into consumer electronics. Identification of possible development directions build on an understanding of an organisation’s strategic position. a combination of development direction is usually perused if organisations are to develop successfully in the future. (Johnson. Scholes & Whittington: 2005). introducing a host of new.0 of its Shell user interface INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . in terms of products and market coverage. inexpensive videodisc players. Product Development – is where organizations deliver modified or new products to existing markets (Johnson. Scholes & Whittington: 2005) According to the Ansoff matrix Acer has used three strategy development directions. Development directions are the strategic positions available for an organization. In Australia Acer has become the 3rd largest PC vendor & it has achieved the countries highest overall market share in notebook PC & tablet PC sales.In North America they acquired Altos Computer systems. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . But Acer could have used Packard Bell to diversify as PB was into electronics & plasma TV. Diversification – is a strategy that takes an organisation away from both its current markets and products and enters into a new market with new products (Johnson. Scholes & Whittington: 2005). Available information does not indicate any strategic developments by Acer focused on ‘Diversification’.is where existing products are offered in new markets (Johnson. Indian. New mobility market example: every sales person who carries a laptop can be replace by a mobile. Texas instruments` mobile computing business & became the 4 th leading notebook manufacturer in USA. EMEA region & North American market by maintaining subsidiaries & in some countries by acquiring businesses. At present Acer has penetrated the Australian. Scholes & Whittington: 2005). Market Development . Porters five forces analysis Bargaining power of consumers: (HIGH) There is a high bargaining power for the consumers due to rising demand and rapid growth in IT industry. But customers who seek for good quality products want go for low price products. and satellite TVs. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . where they share the profits among partners. Market is growing from netbook to smart phones and now tablets. Bargaining power of suppliers: (VERY LOW) A feature of the markets which Acer operates is the necessity for co-operation with suppliers of technologies such as operating systems and micro processors. play stations. Acer is having end to end marketing strategies where it identifies the exact customer needs. Therefore threat of substitute is in medium level. Currently they are adhering to a channel business model that involves first class suppliers. mobile devices. But their bargaining power is very low due to procurement. and using its knowledge and skills to exceed their expectations. Threat of substitutes: (MEDIUM) Countries such as India are manufacturing similar products for low price which can be used as a substitute for Acer’s products.8. Substitutes can be mobile phones. since the market which Acer contend is high competitive. manufactures and markets desktop. and related services. Customers seek for popular brands in order to avoid crashes in their computers. which is a multinational/ globalizing technology corporation that develops. drivers. laptop and netbook personal computers. since initial capital requirements are high and PC business requires high technical understanding. Industry Rivalry: (HIGH) Industry rivalry seems to be high. And brand identity plays a main role in PC business. IT managements software. Threat of new entrants: (LOW) Threat of new entrants seems to be low. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Acer’s main rival is Lenovo. 4% of the world's PCs. if not it will be “caught in the middle”. Nevertheless Porter’s explanation stresses that a SBU should make a choice between differentiation and cost leadership. Therefore the SBU should adopt a strategy in consideration with the macro environment. This concept has given rise to criticism over the fact that Porter’s hypothesis lacks flexibility and there is an evident middle ground between the strategies Acer now sells 13. the industry and its core competences. Hence it is imperative for a SBU to craft a unique and valuable position by which the SBU can attain competitive advantage in the market. Porter illustrates that SBUs can accomplish competitive advantage by differentiating their products and services from competitors or through cost leadership. with earnings up 25% to $109 million.9. Shipments increased 28%. Porter’s Generic Strategy According to Michael Porter’s Generic Strategies Theory. well ahead of the industry INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Cost leadership speaks about how an organisation gains advantage with a lower cost base and economies of scale in comparison to its competitors. 9 the company reported its biggest quarterly profit in almost three years. Cost Leadership. Furthermore. Differentiation is created by making your product or service unique and different to that of your competitors. Focus is again subdivided into Cost Focus and Differentiation Focus as depicted in the diagram below. the SBU could target a narrow segment or adopt an industry wide competitive scope. On Feb. ahead of Dell's 12. there are three main generic strategies. The foundations of competitive advantage or to gain a market edge are derived through differentiation and cost.4% but far behind HP's 21%. Differentiation and Focus. The formation of a “fit” among the activities of the company is of paramount importance for a SBU’s success. Worries about profitability have helped push Acer's Taipei-listed stock down 13% since a Jan. Asustek. more robust machines used by companies for data storage." Acer Chairman J. Acer's operating margin in the fourth quarter was 2.businessweek. "We can be No. 2.average of 15%. In November Lanci began rolling out a new line of servers—bigger.) and Packard Bell (Europe) for the middle tier and Acer for technophiles. using four brands to cater to various segments: eMachines for those who focus mainly on price. as consumers flock to Acer's inexpensive offerings. In 2009 Acer launched its first smartphones. Acer swooped in and became No. an improvement from 2.S. a drop of 10% for HP and Dell. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .. number crunching. plus additional staff devoted to corporate sales.K. niftiest gadgets and stay focused on the basics of churning out quality computers at low cost. Acer is developing a Kindle-like e-Reader. It's O. he's less concerned with dominating the PC business and more interested in being the leader in electronic gadgets of all kinds. The company is strongest in sales to consumers. "I cannot waste resources. offering margins that are roughly double what the company earns on PCs. Gateway (in the U.T. When it comes to launching the latest innovations. As all kinds of new devices hit the market. and network management. will quickly pay off. and by 2013 he aims to get 10% of revenues from smartphones. By yearend.com/magazine/content/10_10/b4169058662305. Let others take the lead on the newest. 1. and devices to compete with Apple's iPad.71% of HP's computer division..95%. vs. Soon Acer will open an Apple-like app store offering programs to run on these new gadgets. make the first move in netbooks. Lanci expects servers to account for about 4% of Acer's revenue." Lanci says. It's already the leader in netbooks—the small. Lanci predicts that the new servers.htm) In conclusion they are in to Cost leadership and however in analysing the strategy of Acers there is a stronger link associating the Company with Porter’s differentiation strategy as opposed to a cost leadership strategy.24% in the third quarter but far behind the 4. "To become No. laptops running Google's Chrome operating system. Once the machines proved a hit. 15 high. Lanci expects to sell more than 2 million of them this year. 1.the smartphone is just the beginning of the story. Wang says. with us. "The industry is going to change a lot in the next five years. we need to continue to focus on mobile." That's why Acer let a Taiwanese rival. low-cost machines it launched in 2008—and it's neck and neck with HP for all portable computers." (http://www. Lanci says. Price sensitivity of the segment 2. Segmentation. Targeting and Positioning Market Segmentation is “The subdividing of a market into distinct and increasingly homogenous subgroups of customers. Growth potential INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Market attractiveness could be measured: 1. This depends on the market attractiveness.10.com/worldwide/) Market Targeting is after evaluating different segments the company now must decide how many segments to serve – target market selection. Likely cross spend 4. Acer worldwide map (http://www.acer. Potential loyalty 3. where any subgroup can conceivably selected as a target market to be met with a distinct marketing mix”. “Positioning is the act of designing an offer so that it occupies a distinct and valued place in the minds of the target customers” – Kotler INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .acer-group.(www. Involve in implanting brand unique.com/public/Investor_Relations/pdf/Acer_Q3_2010_Investor_Conference. Positioning refers exclusively to a mental concept.pdf ) Market Positioning is way the product occupies the consumers mind in relative to competitive products. benefits and differentiation in customers mind. outbound logistics. so that the amount customers are willing to pay for these products/services exceed the cost of these activities in the value chain. marketing and sales and services are the dominant primary activities. Primary Activities In analysing the value chain of Acers’ operations. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . The firm’s margin depends on its effectiveness in performing these activities efficiently. Value Chain Analysis This evaluates the capabilities embedded in organizational processes.11. Value chain is simply a diagram illustrating the various value-added processes/activities that occur inside a business. standard operating environment reinstallation. quality and value. fresh technologies. And by combining its corporate brand images: "prompt.Primary activity Description Inbound logistics Pick up freight management. data wiping and sanitisation. while focusing on service." "teamwork. human resource management and technology development. and quality service. Treating customers with respect and decency. Dedicated to helping people improve their lives through technology and delivering first class products and services. Operations Outbound logistics Marketing and sales Service Support Activities The main support activities of Acers’ comprises of infrastructure. secure product destruction & disposal. testing and full asset reporting and services for end-of-lease/life. All the marketing and promotional events by Acer are conducted in accordance with local statutes and regulations. while opening up multiple channels of communication to acknowledge their input and demands. asset and customer label removal." and "efficiency. Strive to help consumers better understand on products and services provided. Support activity Description INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Company encourages partners and suppliers to join Acer in an efficient supply chain and service network that provide customers with competitive pricing. Breaking the barriers between people and technology that targets different customer needs in the global market by offering unique set of multi brand products which reach high customer satisfaction." Acer also acts as a longstanding sponsor for many elite sports organizations from around the world. provision of packaging materials. Acer became International Olympic Committee (IOC)'s worldwide partner in computer facilities. multi branded IT products. keeping solutions simple and innovative." and with that in mind. “Fresh technology enjoyed by everyone. Acer devoted to creating a healthful. to meet today’s demanding business requirements. and able to solve real life business issues Acer Group offers exceptional solutions. and offering a number of welfare programs. Acer endorses an open door policy that allows employees to speak to their supervisors anytime.Human Resource Management Acer understand that "People Matter. Technology Infrastructure INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Employee feedback is instrumental in improving corporate performance. organizing many recreational and self-improvement activities. they can also voice their opinions and needs via a proper channel. delivering a series of server products flexible enough to be easily repurposed for future use and investment protection Acer has created an organizational structure. everywhere” The latest technology to cater for today’s workloads and to scale up to tomorrow’s focusing on customers’ need. quality workplace. which helps it to meet the rapidly changing market needs in this ever-changing industry. a company should have a portfolio of products that contains both high growth products in need of cash inputs and low growth products that generate a lot of cash. BCG Matrix (Product Portfolio Method) The BCG matrix method is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. It has two dimensions: market share and market growth. To ensure long term value creation. The basic idea behind it is that the bigger the market share a product has or the faster the product’s market grows the better it is for the company. Placing Acer products in the BCG matrix results in four categories in a portfolio of the company: Product Business Growth Rate Market share BCG Position INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .12. HIGH HIGH STAR HIGH HIGH STAR LOW HIGH CASH COW LOW HIGH CASH COW LOW HIGH CASH COW HIGH LOW QUESTIONMARK HIGH LOW QUESTIONMARK HIGH LOW QUESTIONMARK INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Either invest heavily or sell off or invest nothing and generate whatever cash it can. high market share) Profits and cash generation is high. Frequently rough in balance on net cash flow. low market share) Avoid and minimize the number of dogs in the company. Increase market share or deliver cash. Question Marks (high growth. low market share) Have the worst cash characteristics of all. because high demands and low returns due to low market share. high market share) Use large amounts of cash and are leaders in the business so they should also generate large amounts of cash. or liquidate. Keep profits high. investments needed are low. Deliver cash. If nothing is done to change the market share. However if needed any attempt should made to hold share. Cash cows (low growth. Beware of expensive ‘turn around plans’. and because of the low growth. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .HIGH LOW QUESTIONMARK LOW LOW DOG Stars (high growth. a dog. as the growth stops. Foundation of the Acer Company Dogs (low growth. question marks will simply absorb great amounts of cash and later. because the rewards will be a cash cow if market share is kept. such as a generic growth target or a generic return on capital for an entire corporation. These inadequate invested sums of money are a waste of money. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . In this way they are unable to ever become cash cows.Acer Question Marks products can improve the market share by using their brand name and channel distribution strategies. or otherwise company is advised to disinvest and try to get whatever possible cash out of the question marks that were not selected. As a result of all Question Marks and Stars Business Units get mediocre size investment funds. The BCG matrix method can help understand a frequently made strategy mistake: having a one-size-fits-all-approach to strategy. Acers’ cash cows business units are often allowed to reinvest substantial cash amounts in their businesses which are mature and not growing anymore. Either these SBUs should receive enough investment funds to enable them to achieve a real market dominance and become a cash cow (or star). investments are made now and then in hopeless attempts to “turn the business around”. Dogs Business Units even worse. has followed many attack & defence strategies to overcome the competition Attack strategies (Market Share) This is the process of taking over smaller firms in the market place. market expansion & diversification into new market places. In 2008 Acer was able to purchase 75% of Packard Bell. By this Acer was able to increase their market share globally.13. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . Atlos computer systems & Texas instruments` mobile computing business in USA. Acer Inco. By this they were able to gain foothold in Europe & attack their competitor Lenovo. EMEA region & also acquisitions such as. Takeover doubled Acer’s market share by 5.2% & were able to sell 18. Defence strategies Mobile defence This involves a company keeping on the move through innovation.6million PC` in USA. Acer was able to open up subsidiaries in Australia. Attack & Defense Strategies There are number of strategies which a company is able to adopt in order to increase the sales & to protect their market share in the face of competition. India. in order to build up market share. Acer approached this strategy by acquiring Gateway (US computer maker) for US$710 million. On the other hand.S. Corporate Social Responsibilities & Governance Since its establishment. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . These institutions integrate many years of Acer Group's accumulated experience in business management and information technology. On the one hand. so that Acer employees can reach out to a greater number of people in need of help under the auspices of the company. and introduce first-rate management courses and teachers from the E. and U." In its pursuit of becoming the world's number one.U.Aspire Academy and IC Design Academy. Acer is to launch a Digital Opportunity Project to assist more disadvantaged groups in excelling in digital technologies by means of designated educational programs. Acer aim to upgrade production. region corporate personnel dispatched to the Asia Pacific region. Acer was driven to work in the spirit of "what is taken from the community is used in the interests of the community. these academies provide long-term training to personnel required for corporate internationalization in the Asia region. And to inspire Acer staff to partake in social outreach. enhance international competitiveness of corporate Taiwan. and promote Taiwan's experience on the international stage. Here's a closer look at the three missions of Acer Foundation: Research and develop technology and management: through cooperation and international exchange between industry and academia.14.S. A share platform is set up within the company so that more members in the Acer family can enjoy success stories of Acer's international subsidiaries in the outreach program. the Acer Volunteer Team was founded. while sparking more ideas to encourage community participation. Acer gives back and reaches out to the people by organizing many community-centric causes its operating bases around the world. or via both the Acer and Gateway Foundations. Cultivating talents: Company established two personnel training centres . and U.U. and Volunteering Service Leave instituted in 2009. In 2010. they provide an opportunity to cultivate the talents of E. Long-term rewards and promotion of deeds that comply with Acer Foundation objectives are necessary to broaden the effects on society. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .Reward and promote service: Acer promote public welfare activities by rewarding academic or corporate research in information technology and business management. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . INTERNATIONAL BUSINESS CASE STUDY November 2010 2 . as consumers' income has increased. INTERNATIONAL BUSINESS CASE STUDY November 2010 2 .10 and there have been rumors that it should go up in the next year or so. the population in the UK may feel more skilled in using PCs. the minimum wage has gone up from £3. therefore they have more money to spend and may feel that now they can afford to buy a computer. In the last 2 years.(Retrieved: “IT’S TIME” Acer Corporate Responsibility Report 2009) Governance Government policies would have major impact on the PC market these are as follows. The government has tried to improve the skill and knowledge of IT in the UK. The legislation that has recently been changed is the law of minimum wage. leading to a greater demand as consumers feel more confident in using them. This may have a great impact on the firm in the PC market. This would be good overall but it would also be good for the firm. and therefore this impact may increases the use of PCs at home. Trade unions say it should be raised by another 10p but it needs to be higher than what it is now.50 to £4. Due to this effect.