Acer Group's China Manufacturing Decion
1.The students should see validity in each of the 'don't go'/go/'wait' arguments separately. Perhaps the 'go' decision is the easiest to justify upon examination of the case facts. Hence as an exercise, it is necessary to thoroughly analyze other alternatives.
Solution:
[Acer had moved into China the very next year the case study was prepared in 1998, i.e., in 1999 under the stewardship of Gianfranco Lanci as the director of the company and J. T. Wang, the chairman and chief executive]
The "GO" Approach
* The most important reason for moving into China could be the huge lucrative market and the immense opportunity the market of China presents Acer with.
* China being a huge market waiting to be exploited would also necessitate the reduction of lead times of ordering parts from Taiwan and owing to the restrictions of direct transportation facilities between China and Taiwan, Acer would need to setup a manufacturing facility as well as a shift the assembly lines into China for serving the fragmented markets of China
* The economy of China is on a roll and hence the growth potential of the country is immense making it very lucrative for any company for that matter to invest in the country and more so for Acer since China uses the highest number of PCs, second only to USA. The enormous size of its economy can boost the company by unforeseen standards.
* China would allow the company of Acer to move upward from the present position of the 3rd largest PC manufacturer. This could actually lead to Acer increasing its revenues manifold and then exploit the other booming markets as well like the whole of Latin America.
* The HR issue of the Taiwanese managers working in China can be sorted out Acer hires elsewhere other than Taiwan and sends them to China with a huge paycheck since the rewards of operating in China are also huge.
* China's huge size can actually make it possible for the company to exploit the economies of scale and the cheap labor can boost the
Solution:
[Acer had moved into China the very next year the case study was prepared in 1998, i.e., in 1999 under the stewardship of Gianfranco Lanci as the director of the company and J. T. Wang, the chairman and chief executive]
The "GO" Approach
* The most important reason for moving into China could be the huge lucrative market and the immense opportunity the market of China presents Acer with.
* China being a huge market waiting to be exploited would also necessitate the reduction of lead times of ordering parts from Taiwan and owing to the restrictions of direct transportation facilities between China and Taiwan, Acer would need to setup a manufacturing facility as well as a shift the assembly lines into China for serving the fragmented markets of China
* The economy of China is on a roll and hence the growth potential of the country is immense making it very lucrative for any company for that matter to invest in the country and more so for Acer since China uses the highest number of PCs, second only to USA. The enormous size of its economy can boost the company by unforeseen standards.
* China would allow the company of Acer to move upward from the present position of the 3rd largest PC manufacturer. This could actually lead to Acer increasing its revenues manifold and then exploit the other booming markets as well like the whole of Latin America.
* The HR issue of the Taiwanese managers working in China can be sorted out Acer hires elsewhere other than Taiwan and sends them to China with a huge paycheck since the rewards of operating in China are also huge.
* China's huge size can actually make it possible for the company to exploit the economies of scale and the cheap labor can boost the