1. education and grooming of its employees. Mangers
What accounts for Acer’s outstanding start-up? What caused the company to outpace scores of other Taiwanese PC companies? Acer was established as a company performing multi-sale/service functions. The drive to make profit pushed the founders to grasp every opportunity available which included importing electronic components, providing engineering and design advice to local companies, publishing journals and offering training courses. Despite being capital constrained, Acer had a brilliant start-up and soon it outpaced all other competitors on the Taiwan PC market.Based on my understanding of this case, Acer owes its outstanding start-up to frugality, organizational culture, and a well defined market focus. The CEO implemented and encouraged Frugality as an important business principle which was reflected in the company’s business processes. The firm leased just enough space for current needs.
Their products were priced with a low profit margin to ensure quick turnover. This was done to avoid tying up its revenue in debt and receive cash quickly for further reinvestment into the business. Hence, the business is able to avoid unnecessary costs and maximize the use of its capital.The organizational culture of the firm is closely kitted and encouraged delegation of decision and employee accountability. In Taiwan, the patriarch-dominated, family-run company model was most common but the CEO of Acer encouraged the delegation of decision making to his employees, thus, trusting them to act in the best interest of the company. This “hand-off” style was a strategy to harness the natural entrepreneurial spirit of his employees. Another culture of the company is the commitment to the education and grooming of its employees.
Mangers were responsible for the learning process of their subordinates, hence, creating a family-like work environment. The choice of Acer’s target market was also very instrumental in its outstanding start-up. Since Acer does not have as much resources as the American and Japanese companies and was also Frugal in its spending. While its competitors were competing with wealthy multinational companies, Acer targeted smaller neighbouring markets that were of lesser interest to the “Global Giants”.
Although this approach came with its challenges but through persistence Acer was able to establish itself in these markets.Shih mentioned that this approach was very advantageous because the supposed smaller markets are becoming bigger and the combination of many smaller markets is not small. Also, this approach opened the company up to international markets and joint ventures. Conclusively, the most visible factor that caused Acer to outpace other Taiwanese companies is its focus on smaller neighbouring market niches. These markets are fast growing and a combination of these markets gives the company a “Big” market to serve. 2. After such strong decade, why did Acer’s growth and profitability tumble in the 1980’s?How do you evaluate Leonard Liu’s performance? .
This reversed trend can be attributed to three main causes which are, changing market trends, unnecessary joint vdntures and drifting from its foundational values and culture, high level of spending and heads on competition with Giant global firms. The family like foundational values and culture of Acer encouraged employee interaction. As the company grew, a shortage of management employees made Shih to hire new employees who are not familiar with the organizational value and gradually made the company drift from its culture.Leonard Li, 3. H w effective has shih been in rebuilding Acer in the early/mid 19890s? What do you think of his new business concept (“Fast Food” model, Uniload, Smiling Curve, etc. ), and his new organization model? After assuming his old role as the CEO of Acer, Shih implemented some changes to help the company learn from its mistakes and recover from its fall.
With a new focus on international market, Shih adopt the “Global Brand, Local Touch Philosophy” philosophy which emphasizes its deeply rooted local roots while still functioning as a global brand.Shih also adopted the client server organization model which serves as a competitive tool for speed and flexibility. This model gave businesses the opportunity to leverage their ideas and initiatives directly through the Regional Business unit. Faced with the task of revamping the company and reality of high competition in the PC company, Shih came up with the Fast Food business concept. The idea is to reduce in half the rate of inventory turnover The uniload concept was developed to increase flexibility and responsiveness.
Products can now easily be assembled in RBU’s abroad close to the customer.Thus, saving the company the cost of logistics, inventories and import duties. This will help the company to control its spending. The smiling curve concept helps the employees to shift their focus from worries about giving up product assembly to the value of component development which encourages adding value through creativity (using the brain) 4.
As Stan, what action would you take on Aspire? Should he approve its continued development? Should he allow AAC to continue the lead project? Should Aspire become a global product? If so, who should manage the worldwide rollout?