Case Study of Acer

Case Study of Acer

Comparison of Acer's Strategy with Lenovo

Acer is a global manufacturer of Information Technology hardware products. Acer started its business operations in Taiwan. The company is primarily engaged in the designing and manufacturing of Personal computers. The PC related product offering includes notebook and desktop PCs, storage and servers, liquid crystal display monitors, smartphones and tablets and projectors. Main competitors of Acer's include, Apple Inc., Lenovo Group Limited, Sony Corporation, Dell Inc. and Hewlett-Packard Company etc (Market Line, 2012).

Acer found that structuring of brands in business to business market is straightforward than building of brands in the business to consumer market. Acer had trouble breaking into the American market. Acer's market share in United States dropped from 15 to 5 percent because of presence of local strong competitors. In United States and European market, the main issue for Acer is the issue of people or consumers rather than product related issues. Consumers in these markets are more emotional in choosing their brands and prefer to purchase from local players. Acer's strategy of divide and conquer took Acer to China and because of cultural similarities of Taiwan and China, Acer envisioned building a stronger market base in greater China and expanding from there to the rest of the world.

In comparing Acer's and Lenovo's strategy, it is evident that both companies initially faced poor recognition of their brands globally. In order to make their stay stable in global market specifically the market of U.S., Lenovo and Acer both acquired reputable companies. Lenovo purchased the IBM ThinkPad notebook business in 2005 and Acer's tactic included the acquisition of Gateway Inc. in the year 2007.

The distinction between Acer and Lenovo's strategy begins with locality as; Acer is the prevalent computer company in Taiwan while Lenovo is the principal computer company of China. Acer has international identity advantage that gives the company right of entry to latest technology and economies of scale that Lenovo does not have. Another difference between the strategies of Lenovo and Acer is such that, after acquisition Lenovo had to lay off its workforce because of not having stable market share while Acer did not undergo any changes in its structure even after getting away from other market leaders.

How “global markets-local markets” paradox figures into Stan Shih's strategy for China

In 2000 a major restructuring spun off the manufacturing operations of China. Stan Shih wanted to transform its company into a marketing and services powerhouse. Stan Shih refocused the distribution and marketing efforts of Acer on the fast growing market of China. Acer got benefit from strong economic ties with the mainland giant, which joined the World Trade Organization in 2001. The rules of World Trade Organization required that both Taiwan and China to eliminate the restrictions and limitations on foreign investment.

Stan Shih envisioned to build a strong market base in China and then to expand to the rest of the world. According to Stan Shih, the market of China is very significant for the Taiwanese companies to ...