ACER COMPUTER COMPANY

Acer Computer Company

Question 1

The strategy for Acer has been described as 'divide and conquer'. This is because initially Acer had lost its market share very majorly. The other competitors were performing their work proficiently and had a wide market. Lenovo itself was doing better than what Acer was trying to do. Seeing this and trying to act efficient, the founder Mr. Shih, decided to divide their tasks simultaneously throughout. The ease at being business to consumer and business to business was differentiated.

The metaphor to divide and conquer was Shih strategy. They were going to divide the company in many different sections and dissipate around the nation. The locals in the market were doing more well as compared to the external organizations that were working there. One power breaks another power into smaller, more manageable pieces, and then takes control of those pieces one by one. It generally takes a very strong power to implement Divide and Conquer Strategy. Divide by spinning off its manufacturing activities which resulted in two primary units—brand name sales and contract manufacturing. The restructuring also resulted in Acer breaking off several of its smaller operations, including semiconductor design, consumer electronics, and liquid-crystal displays. Conquer by acquiring rivals, which helped them not only to avoid competition, but also made Acer become more experienced and more Global.

From its inception, Acer had been a component and equipment manufacturer for relabeled electronic products marketed and sold by recognized global companies. Along with the booming of the PC industry comes with the need to produce PC components faster, cheaper and more efficiently; this need gave birth to several companies akin to Acer, which in turn contributed to market saturation

Question 2

The global and local strategy paradox had correctly figure into the situation for Acer in China. Stan Shih figured that Acer could take advantage of the benefits that regionally local markets have to offer to companies operating in their own turf. Moving to markets that share the same characteristics is easier than to move to a different region that do not share the same culture, customer buying behavior and socio-economic trends.  

China offered these rewards, not necessary as an advantage against Lenovo, but as an advantage to other competitors in the PC business. In the other hand, the global reach Acer had engaged on by shifting from a hardware component manufacturer to a consumer friendly PC manufacturer, by acquiring Gateway, ...