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The Acer Group

The Acer Group. Marshall Barclay Amanda Dammen Jason Horiuchi John Wooten. Stan Shih. Born December 18, 1944 Worked for his mother from an early age selling stationary and eggs Earned B.S.E.E. and M.S.E.E. from National Chiao Tung University, Taiwan

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The Acer Group

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  1. The Acer Group Marshall Barclay Amanda Dammen Jason Horiuchi John Wooten

  2. Stan Shih • Born December 18, 1944 • Worked for his mother from an early age selling stationary and eggs • Earned B.S.E.E. and M.S.E.E. from National Chiao Tung University, Taiwan • Began his career at Unitron Industrial Corp in 1971

  3. Company Founding • Multitech formed in 1976 by Shih and four other partners • Started with $25,000 and 11 employees • A lot of emphasis put on the growing microprocessor and microcomputer industries

  4. The Industry • The microprocessor and microcomputer industry began developing and growing rapidly • Taiwanese government incentives prevalent for high tech companies • The IT industry in Taiwan was dynamic and cost effective • Taiwan had the production capability to support new technologies

  5. Growth Years (1980’s) • Known for innovative products • Major innovative products and decisions • First in the world to design an upgradeable CPU or “Chip Up” technology • One of the first Taiwanese companies to develop their own brand for international market and shifted focus from supplying

  6. Struggle and Restructuring • Within months of going public Acer had an employee brain drain and good employees left to exercise stock options • Increased competition and 75% price drop drove down prices, the firm’s heavy dependence on PCs drove diversification • Recognized the need to expand the product portfolio and had three joint ventures, only one with TI was profitable • In 1988, went public and changed name from Multitech to Acer • New market drove enhanced efficiency, cost cutting, downsizing, and new global business mode • New “fast food” structure was developed to concentrate on value added parts of business

  7. Strengths • Used local Taiwanese talent to establish a reputation for innovation • Exploited its smaller size, flexibility, and aggressive local manufacturing to more effectively deal with a rapidly changing industry • Shih as the major driving force

  8. Recognized Weaknesses • Image of Taiwan as low-cost, low-end product manufacturer • Top management was too technically oriented, and lacked business savvy • Acer tried to expand too quickly in NA, which was contrary to its more gradual expansions in Europe • Acer might confuse consumers with too broad of a range of products

  9. Opportunities • Used size and flexibility to adapt to the rapidly changing computer industry • Turned weakness of inexperienced international managers into strength by training and implementing local executives

  10. Threats • Increased competition due to the movement toward disintegrated computer components • Designs were easily copied • Unknown factors in the market place during global expansion

  11. Shih’s Smiling Curve Value Added Technologies Manufacturing Volume Brand Channel Logistics Speed Cost PC System Distribution Segment by Country Local Competition Assembly Components Segment by Product Line Global Competition

  12. Fast Food Business Model Value Added Brand Channel Logistics Technologies Manufacturing Volume Shift Assembly from Taiwan to marketplace • Reduced inventory • Time to market Distribution Components Assembly

  13. Client-Server Business Model • Strategic Business Units • R&D, manufacturing, product management, and OEM sales • Regional Business Units • Distribution, service, and marketing • Allow for faster decision making through shared information and interaction between the business units

  14. SBU’s

  15. USA • Canada • Thailand • India • S. Africa • Singapore • UAE • Australia • Indonesia • Japan • Korea • New Zealand • Philippines • CIS • Hong Kong • Malaysia • Turkey • Taiwan • China • Holland • Germany • UK • France • Hungary • Belgium • Denmark • Norway • Austria • Italy • Argentina • Brazil • Chile • Mexico • Venezuela • Columbia • Peru RBU’s

  16. Vision Moving Forward • Break Acer into 21 public companies listed around the world • Open up investment in the company to foreigners • Taiwanese government rule of 7.5% • Convergence of the computer and consumer electronics markets • Widescreen televisions that double as computer monitors • High-speed CD-ROM drives • Set-top boxes for satellite and cable TV • Wireless and integrated services digital networks (ISDNs) modems and video phones

  17. Acer In 2000 2000: Acer spins off its manufacturing operations to focus on globally marketing its brand-name products 2001: Adopted a new corporate identity 2002: Launched of the Travel Mate C100 Convertible Tablet PC, the first convertible Tablet PC available in the worldwide market.

  18. Acer in 2000 • 2003: • Launched the Ferrari 3000, the first notebook in the world to have the patented Ferrari red color • 2004: • Founder Stan Shih retires from the Acer Group • Acer becomes the world's number 5 brand for PC’s and notebooks • Highest year-on-year growth among the top five vendors • 2005: • JT Wang assumes the position of Chairman and CEO • Gianfranco Lanci steps into the role of President JT Wang Gianfranco Lanci

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