Group Four

Outline
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Background & History of Acer
Risks associated with Acer’s vision “21 in 21”
Market potential for Acer’s new lines
Acer’s market share with other firms
Acer’s marketing strategy
 The lesson can be taken from Acer
 Conclusion
 Q & A

Background & History of Acer
1976-1986: Commercialize microprocessor technology
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Acer was founded in 1976 under the name Multitech, focusing on trade and product design
In 1981 the Microprocessor computing tool was launched.
During this stage in Acer's history, the company significantly contributed to the popularization of computers in Taiwan.

Background & History of Acer (cont…)
1987-1995: Establish a leading brand and go global
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In 1987, Multitech formally became known as Acer, marking the start of Acer's efforts toward creating a strong brand name. The company grew to be ranked
8th largest PC brand in the world.
In 1991 Acer introduced ChipUp, the first CPU upgrade solution. The launch of AcerPAC (Personal Activity
Center) brought multimedia to the PC.
In September of 1995, the Acer Aspire transformed the company from an anonymous PC manufacturer into a trendsetter in the hippest of industries.

Background & History of Acer (cont…)
1996-2000: Offer fresh technology for everyone, everywhere
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In 1996 Acer introduced Nuovo Notebook PC, featuring an innovative power management system, Heuristic Power
Management (HPM), It’s called new technology “Power on
Demand”.In 1997 the company acquired Texas
Instruments’ notebook division.
This 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.

Background & History of Acer (cont…)
2001-2007: From manufacturing to services
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The stage of development, Acer has evolved from a manufacturing powerhouse to a globally recognized computer brand, marketing world-class IT products and services.
In 2001 Acer adopted a new corporate identity to symbolize its commitment to enhancing people's lives through technology.
In 2003 the next-generation Empowering Technology platform was launched, integrating hardware, software and service to provide easy-to-use, dependable end-toend technologies.

Background & History of Acer (cont…)
2008-Present:
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Following the recent acquisitions, Acer has implemented a multi-brand strategy which exploits the positive awareness that companies of the group have developed over time with their own unique customer base.
Today, Acer’s product range includes PC notebooks and
Desktops, servers and storage systems, monitors, peripheral devices, digital devices,
Acer employs 5,400 people throughout the world and has created a consolidated sales and service network in more than 100 countries.

Risks associated with Acer’s vision
“21 in 21”
Acer’s vision “21 in 21”
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In 1994, Shih unveiled a plan to "deconstruct" Acer into
21 publicly traded business units by the end of the 20th century.
Spread its shares throughout all its subsidiaries and partners.
Shih hoped that their independent status would enable the individual units to compete more effectively by facilitating entrepreneurship, inspiring research and development, and allowing for corporate fundraising through stock and bond offerings.

Risks associated with Acer’s vision
“21 in 21”
Acer’s vision “21 in 21” (Cont…)
 Separating the divisions will also clear a path to leave
Shih legacy intact by not risking the future of his brainchild to a successor.
 By the new vision, Shih hopes there is no more image of Taiwan as low-cost, low-end product
 Acer Computer International, the company's Asia-
Pacific distributor, had its initial public offering in
September 1994.

Risks associated with Acer’s vision
“21 in 21”
Risk of “21 in 21”
 Problem of expansionism
 There is a possible expansion barrier due to Acer's philosophy to spread its shares throughout all its subsidiaries and partners.
 Lose of company's control
 Without majority control, the company's chief could lose control to maintain his hold over the group

Risks associated with Acer’s vision
“21 in 21”
Risk of “21 in 21” (Cont…)
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Increased competition and the risk of substitute in the market is high.
 In US markets, the customers are not aware of Acer's brand name.
The company is still suffering from low brand awareness in the US despite its top-ten position (e.g Intel and IBM).
 The competition is always developing new kinds of technologies which can be a substitute of the current products.
Inexperienced international managers and cultural differences between its national and international staff.
 This condition could lead to inadequate access to distribution centers.

Market potential for Acer’s new lines
Acer New Line: Child Friendly Computers
 Features:
 Touch screen devices are clearly the future of kid-friendly computing.
 A good ergonomic setup matters.
 Input devices made specifically for children’s smaller hands and lack of computing experience.
 i.e. small-size mouse, Keyboard-feature fewer keys, larger key labels, and colorful designs.
 Using a keyboard “skin” a washable, silicone cover, custom fit for particular keyboard models, that keeps such detritus from ever reaching the keys.

Market potential for Acer’s new lines
Acer New Line: Child Friendly Computers (Cont…)
 Opportunity:
 Netbook is one of good choice of kid’s computer feature.
 Opportunity to reach this section still available.
 Offer child attractive feature and also program.
 Competitors:
 Compaq , Peewee (PeeWee Pivot 2.0 Tablet Laptop, PeeWee Power 2.0
Laptop), Roundbox , One Laptop per Child Association, Inc.

Market potential for Acer’s new lines
Acer New Line: Information Appliance
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Opportunities in information appliances market:
 It based on computer technology
 uses PC hardware and software.
 The infrastructure that will be used to connect and deliver services to the information appliances-PC sever.
Acer Information Appliance Products:
 Smartphone; Acer stream, Acer beTouch E400.
 Laptop & Netbook; Acer aspire one.
 Android tablet ; 7-inch, touch-screened, probably-3G

Smart Phone Trends and Operating System’s Market Share http://en.wikipedia.org/wiki/Smartphone http://www.slideshare.net/lis186/smartphone-market-trends
16

Worldwide Laptops and Tablets Market share http://www.bncxe.org/showthread.php?t=42064 http://www.fiercemobilecontent.com/press-releases/strategy-analytics-apple-captures-95-percent-share-global-
17 tablet-shipments-q3-2010

Market potential for Acer’s new lines
Acer New Lines: Video Games
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Video Games:
 PC & Console games.
 Massive Multiplayer Online games;
 social games, casual games, free-to-play MMOs.
Marketing Potential:
 Poised for significant growth, but many sectors have already matured.
 Opportunities are still available.
 Allow massively multiplayer online role playing game.

Market potential for Acer’s new lines
Acer New Lines: Video Games (Cont…)
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Targeting the core user segment, which has a high percentage of sales per customer and repeat users.
Offer value proposition.
Gamers are more willing to try a new game at lower price
The main competitors:
 In console video games section: : Ninetendo , Sega and Sonny.
 In online game section: free online games, Counter strike

Worldwide Video Games Market share
HTTP://INSIDETRADEMARKS.COM/TAG/SOCIAL-GAMES/
HTTP://BLOGS.IGN.COM/GAMEOBSERVER/2009/08/12/
20

Acer’s market share with other firms
HP vs. Acer

Acer’s market share with other firms
HP vs. Acer (cont.)

Acer’s market share with other firms
PC Market Share
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 1Q09
(Thousands of Units)
Note: Data includes desk-based PCs and mobile PCs.
Source: Gartner (April 2010)

Acer’s market share with other firms
Mobile PC Market Share
Worldwide Mobile PC Vendor Unit Shipment Estimates for 1Q10
(Thousands of Units)
Source: Gartner (May 2010)

Acer’s market share with other firms
Acer Revenue
Q1, 2010
US$ 4,948 M
Q1, 2009
US$ 3,400 M
Note: Others include servers, projector and IA products
Source: www.acer.com

Acer’s marketing strategy
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“We are providing freshest technology at the most reasonable price.”
Acer is known as one of the leading PC vendors across the globe .
Under a dynamic global management team , it has redefined its business to concentrate on becoming a leader in a new market of intelligent consumer products.
Acer has expanded to key markets like the US and
Europe, where it hopes to make greater revenue gains.
Acer has also ventured into the Far East as part of its strategy of invading the consumer electronics market.

Acer’s marketing strategy
Product Positioning Approach
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Due to the company’s logistics & brand name problem, they made major development:
 From Multitech International Corporation, they changed it to Acer.
 The original company name was too long & it doesn’t appeal as a technical innovation company.
 Shih wants to convert Acer inc. from top-10 global PC manufacturer into a “marketing & services powerhouse”
 The vision is to shift its operation in Mainland China & expand from there to the rest of the world.
 Moving to China is very critical for Taiwanese to become a global company
 Not only China have a big market & low cost of labor, more so it has highly educated technical people.

Acer’s marketing strategy
Production Positioning Approach (Cont…)
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“Global brand, local touch”, a breakout from the traditional Asian preference of corporate structures & cultures that stress deference to authority.
Organize strategic business units from manufacturing & regional business units for marketing.
 Acer’s local teams in individual country or regional market are empowered to make decisions on a wide range of marketing mix elements:
 Acer America targeted the home-users market segment by offering sleek & stylish design which are made available in Best
Buy chain.

Acer’s marketing strategy
Production Positioning Approach (Cont…)
 South Africa’s operation expanded during the changes of apathetical to majority rule
 Computec LatinoAmerica managers adjusted to the new technical circumstances, which led them to secure 30% commanded market share.
 Acer Taiwan executive teams encourage employees to speak-up
& share ideas
 Made a joint-venture with Texas Instruments w/c produces dynamic random access memory chips (DRAMs) – Hsinchu,
Taiwan
 Acquired Counterpart Computers – United States
 Bought stakes in Cetec Data Technology – Germany
 Built assembly plants in strategic points around the world

Acer’s marketing strategy
Production Positioning Approach (Cont…)
 Among the Challenges are:
 Building brand in the business-to-consumer market have more value but also face more challenges
 Downfall of the market share in the U.S. on 1995-97 made the company decided to focus manufacturing & marketing in
China.
 With China joining WTO in 2001, high-tech industry players benefit much due to the elimination of the limitation with foreign investments
 But developing a strong brand image in China is very crucial,
Company needs to be stable & secure the local market before pursuing regional, then global markets

The lesson can be taken from Acer
Successful
 Moving to the Chinese market is a right decision and timely:
 Have cultural and language very close to China
 Compared to local firms mainland Acer has many advantages and more global
 Legend should consider about the potential market to create new more profit when expanding the market and build the global brand.

The lesson can be taken from Acer
Mistake
 Failure on the U.S market is a great learning experience for Acer:
 Not well-known to the American market: differences in lifestyle, culture, perceptions, class ...
 Not have a global brand strong enough to compete with other global brands such as Dell, Compaq, IBM, Sony.

Conclusion
 Acer has used innovative management techniques for its operations, human resources management, and diversification and channel strategies. It has been able to allow complete decision making power to its business units while still leveraging the competencies from these individual autonomous units by:
 Promoting a management style which promotes individual growth
 Innovative operations management using the concepts from JIT
 Building a “client server” organization which enables open communication and knowledge transfer
 Wisely choosing its partners in successful companies like IBM in
US and SNI in Europe.

Q&A