Acer, Inc. – Taiwan’s Rampaging Dragon
Acer, Inc. – Taiwan’s Rampaging Dragon.
Synopsis of the situation Shih Chen Jung was born in 1945. In 1972 he earned his maters degree and started working as an engineer for Qualitron Industrial Corporation. “In 1976, he and several friends founded Multitech International with a $25,000 initial investment. They started by designing hand-held electronic games, and then expanded into the distribution of imported semiconductors. Shih renamed his company Acer Inc. in 1981” (Net Industries, 2007. pg. 1). Acer began making PC clones and components that were sold to larger companies with strong brand names. In 1989 projections indicated the company was overextended. Shih hired Leonard Liu away from the International Business Corporation (IBM) and stepped down as the president of the Acer Group. Liu changed the organization to centralized control and later took the blame for the company’s poor profitability. The industry changed from high profit margins to low profit margins almost overnight. This made it difficult to make a profit from the completed products. Shih expanded and setup Regional Business Units (RBU) which developed global brands in order to turn the company around. Shih’s global expansion included joint ventures “in less hotly contested markets in Latin America, Southeast Asia, and the Middle East. By 1995, it was the top-selling computer brand in Mexico, Bolivia, Chile, Panama, Uruguay, Thailand, and the Philippines, not to mention Taiwan” (Net Industries, 2007. pg. 1). In 1994 Shih revealed a plan for Acer to become 21 publicly traded companies by the end of the 20th century. Acer America Corporation (AAC) developed the Aspire computer to be positioned between the high and low end home computer market. Critics and Shih both had reservations about the Aspire and the organizations client server management style.
Key issues Shih’s business model was out of the box; his way of thinking was not the common business style of Taiwan. Stan Shih “delegated
Synopsis of the situation Shih Chen Jung was born in 1945. In 1972 he earned his maters degree and started working as an engineer for Qualitron Industrial Corporation. “In 1976, he and several friends founded Multitech International with a $25,000 initial investment. They started by designing hand-held electronic games, and then expanded into the distribution of imported semiconductors. Shih renamed his company Acer Inc. in 1981” (Net Industries, 2007. pg. 1). Acer began making PC clones and components that were sold to larger companies with strong brand names. In 1989 projections indicated the company was overextended. Shih hired Leonard Liu away from the International Business Corporation (IBM) and stepped down as the president of the Acer Group. Liu changed the organization to centralized control and later took the blame for the company’s poor profitability. The industry changed from high profit margins to low profit margins almost overnight. This made it difficult to make a profit from the completed products. Shih expanded and setup Regional Business Units (RBU) which developed global brands in order to turn the company around. Shih’s global expansion included joint ventures “in less hotly contested markets in Latin America, Southeast Asia, and the Middle East. By 1995, it was the top-selling computer brand in Mexico, Bolivia, Chile, Panama, Uruguay, Thailand, and the Philippines, not to mention Taiwan” (Net Industries, 2007. pg. 1). In 1994 Shih revealed a plan for Acer to become 21 publicly traded companies by the end of the 20th century. Acer America Corporation (AAC) developed the Aspire computer to be positioned between the high and low end home computer market. Critics and Shih both had reservations about the Aspire and the organizations client server management style.
Key issues Shih’s business model was out of the box; his way of thinking was not the common business style of Taiwan. Stan Shih “delegated
References: Bartlett, C., Ghoshal, S., & Beamish, P. (2008). Transnational Management (5th ed.). New York, NY: McGraw-Hill Irwin. Jeitosa Group International. (2006). Global Mentoring. Retrieved May 09, 2008 from the World Wide Web: http://www.jeitosa.com/resources/karen_beaman/Global_Mentoring.pdf Kottolli, A. (2006). Developing a Global Mindset. Retrieved May 09, 2008 from the World Wide Web: http://www.geocities.com/akottolli/developing_a_global_mindset.htm Net Industries. (2007). Acer Inc. - Company Profile, Information, Business Description, History, Background Information on Acer Inc. Retrieved May 08, 2008 from the World Wide Web: http://www.referenceforbusiness.com/history2/28/Acer-Inc.html Rodrigues, C. (2001). International Management (2nd ed.). Cincinnati, Ohio: South Western College Publishing.