1 INDUSTRY OVERVIEW

2 BRIEF INTRODUCTION

3 COURSE CORRELATION WITH THE CASE

4 PRE-LIU AND POST-LIU PERIOD

5 STRATEGICAL AND CULTURAL DIFFERENCE

6 CURRENT SITUATION 2011-12

 Phase 2
1987 – 1995
Phase 1

1976 – 1986 Establish A

Leading Brand
And Go Global
Building The
Foundation
8000
SALES ($M)
7000
NET INCOME ($M)
6000
EMPLOYEES
5000

4000

3000

2000

1000

91

94
1976
77
78
79
80
81
82
83
84
85
86
87
88
89
90

92
93
-1000
1986

Become 2nd company in the world to develop and launch 32 bit pc

INITIAL PUBLIC OFFERINGS (IPO‟s)

Conducted IPO for Gernal Public

Acer raised capital NT$2.2Bn(U.S $88Mn)

Shih original 50% equity reduced to 35%.

Stock Issued at NT$ 27.5, and traded at NT$47. Soon rose to NT$100

After IPO, 65% equity including Shih’s & employees shares reduced to 25%.

Recruit dozen of top level executives and 100 middle level manager

Ground troops and Para-troops

Lack of International experience & cultural awareness

1987

Acquired Counterpoint- Manufacturer Low End Mini Computer

Acquired and expand the operations of Service Intelligence

Concer-Dismal Disappointment

Competitive prices by Dell & Packered reduces the Profit margin from 35% to 25%

1989

Earning per share fall from NT$ 5 to NT$ 1.42

Share Price reduced to NT$ 20 from NT$ 150

Shih decided to hired experienced top level Executives.

Leonard Liu signed as CEO and Chairman of AAC

Shih stepped down as President

1990
1992
1992
70

60
Portables
50

40 Desktops &
Motherboards
30 Minicomputers
20
Peripherals & Other
10

0
1988 89 90 91 92 93 94
120

100

80
BRAND
60
OEM
40 TRADING

20

0
1988 89 90 91 92 93 94
2500

2000

1500 Total Assets, Total

1000 Liabilities & Owners
Equity
500

0
1988 89 90 91 92 93 94
AFTER 1992

Reappoint Shih as CEO

Rethink Acer‟s Management policies

Considered learning from losses as Investment rather than a waste

Continue to pay tuition because long-term profits exceed the cost of education

Shih considered Acer‟s Core SBU‟s to Public

Acquired 19% shares of Computec

“Global Brand, Local Touch”

“21 in 21”
1993
1993
1992
300

250

200

150 NET INCOME/LOSS

T.A AND T.L & OW. EQ.
100

50

0
1990 1991 1992 1993 1994
-50
1994

Mike Culver promoted to AAC Director of Product

Management
Brought idea, “the first Wintel-based PC”

Conduct Market research

Come-up with “Aspire Pc” having Frog Design

Quality innovative product at a less premium price

Projected U.S sales of $570 Mn and profit $17 Mn in 1995

 STAN SHIH
• First targeted niche markets
• Aggressive International
Expansion Strategy
• Austerity Campaign
• Acer 1-2-3
• “Global Brand, Local
Touch”
• “21 in 21”
• „‟If it doesn't hurt, Help!‟‟
LEONARD LIU
• Focuses on networking
market
• Strategy thrust
• Autocratic Leadership style
• Introduce Regional
Business Units (RBU‟s) &
Strategy Business Units
(SBU‟s)
• Tight Control & Lay-offs
• Iron-Fisted management
style
• “By-the-numbers”
management model
STAN SHIH
LEONARD LIU
• Institute the strong norm of
Frugality
• Delegation of authorities
• Employees Education-
„‟think and learn”
• Rely on people, win trust &
build business around them
• 4 Values-Statement of
shared Belief by managers
• Family-run company model
• “Tutors conceal nothing
from their pupils”
• Reduced management layers
to increase accountability
• Established standards for
Intra company
Communication
• Productivity & Performance
Evaluation
• Lavish style adopted by the
top personnels
• Biased behaviors for the
managers
Q#1
Should Aspire project change it, or put it on
hold?

Q#2
What implications would his decisions have for
the new corporate model, he had been building?

Q#3
What are the changes needed in AAC to meet
the challenge?
STRENGTHS WEAKNESS
• Strong corporate culture • Paratrooper managers who were not adapted
• Employee empowerment with Acer’s culture
• Global expansion and diversity • Low cost, low end product manufacturing image
• Strong financial position • Acer’s limited capital resources
• Strategic alliance for further expansion • Existing coordination problem

SWOT
OPPORTUNITIES THREATS
• Growing industry • Newest Technology
• Increasing trend to working at home in U.S market • New marketing and distribution channels conceived
• Emerging growing multimedia Notebooks, Netbook by the competitors
• Improved brand name • Periods of shrinking demand
• Rapid growing interest in internet • Loss of complete control
• Fierce Pc business competition
Degree of Rivalry-High
Threat of Substitute- Low

Buyer Power- High

Supply Power- High

Threat of new Entrants- Low

Benefits of Benefits of
Global National
integration responsiveness

Strong cost control is Aggressive

critical to maintain with pricing for
ongoing price
competition (economies maintaining a
of scale/scope) market share

Investment in the
state-of-the-art Adaptation to
manufacturing market changes
for the unit cost

Inventory and
Manufacturing
capacity
management
Established Network Integrated Initiate Aspire on Regional rollout
Organization Structure starting with the launch in the U.S

Continue on client server AAC ownership of the

model Aspire project

Promote coordination From Cross-BU project

between BU‟s management teams

Share resources and transfer

knowledge between BU‟s
Integrated network organization structure is
critical to Acer both for market responsiveness
and Global efficiency

Network Coordination between BU’s is

essential for Acer as a truly Global company

Acer corporate culture is the key to success to

such a global company

Stan Shih’s leadership is required for the

transition period
CURRENT MISSION-
‟‟Empowering
people, empowering
technology‟‟

On 2011, Acer acquired U.S

based rival Gateway Inc, for
U.S $ 710 Million

Acer Inc. 2011 primarily

financial results consolidated
revenues U.S $16.18 Billion
with 25% growth
 • EMEA (Europe, Middle East and Africa) in mobile
#1 computing solutions
#1 • LCD‟s in western Europe
#1 • Taiwan in desktop computing solutions
#2 • Taiwan in mobile computing solutions
#3 • U.S overall LCD‟s shipments
#3 • Taiwan in server solutions
#3 • Latin America mobile computing solution
#2 • World wide mobile computing solution
#3 • World wide desktop computing shipments
#4 • World wide overall PC‟s shipments
#6 • World wide server solutions
#4 • Canada overall PC‟s Shipments
‘’ Work hard, but make time for
Yourself, Your Love, Family and
Friends..... Nobody remembers
Powerpoint Presentations on
your Funeral..... ’’