Acer's Critical Success Factors

1. INTRODUCTION

The Acer Group is one of the world's largest PC and computer component manufacturers. Associated Acer companies include the world's third largest PC manufacturer, and Acer's mobile computers, network servers and personal computers are ranked in the world's top ten most popular brands in their respective product categories. Acer is the market leader in many countries around the world, and is ranked in more than 30 countries globally owing to the strength of its core business. On the distribution side, in 2007 it is the world's No.4 PC branded PC vendor, number one in South East Asia, Latin America and Middle East, etc... Since spinning-off its manufacturing operation, Acer has focused on globally marketing its brand-name products: mobile and desktop PCs, servers and storage, LCD monitors and high-definition TVs, and handheld/navigational devices. Acer's unique Channel Business Model is instrumental to the company's continued success. The model encourages partners and suppliers to collaborate in a winning formula of supply-chain management, allowing Acer to provide customers with fresh technologies, competitive pricing, and quality service. Established in 1976, Acer Inc. employs 5,300 people supporting dealers and distributors in more than 100 countries. Estimated revenue for 2006 is US$11.31 billion (Acer Annual Report 2005).

Stan Shih, the founder and chairman of the Acer group and widely regarded as a high-tech visionary, had a long term vision to transform the Group into a global high-tech corporation. Though fully committed to aggressively pursuing growing segments of the PC market, Acer also began to shift a sizeable portion of its attention and resources to the 3E market - education, entertainment and e-commerce. Newly created ventures in semiconductors, communications and consumer electronics were expected to play an integral role in Acer's strategic growth, capitalizing on prior technological competencies while complementing the development of the existing PC business (Shih, S, 1996).

2. CRITICAL SUCCESS FACTORS OF ACER

2.1. Branding strategy

Acer has always spent huge sums of money on research and development, and in this respect, tends to follow the Japanese technology companies. Shih believes in "Innovalues"-using innovation to create value in the design and production of cutting-edge products-and leading the industry. It is Shih's company that has actually positioned the PC as an aesthetically pleasing home appliance, and this philosophy is summed up in the new corporate mission statement: "Fresh Technology Enjoyed by Everyone, Everywhere." Fresh does not imply new but the best, namely, proven high-value, low-risk technology that is affordable to everyone, and has a long lifespan. Fresh also refers to innovation based on mature technology that is user-friendly, reasonably priced, and enjoyed by everyone, everywhere. Acer Computer has a long history of innovation, and continues to add to this brand strength at every opportunity (Anholt, S, 2004).

Acer's aim is to become more consumer-oriented, as it believes that PCs will become consumer-electronic products with a wider range of uses and applications in the areas of communications, entertainment, and education. Acer, therefore, has to become an expert in consumer electronics as well as personal computing. Shih refers to this as a shift from being 'technology-centric" to "consumer-centric." The computer industry has always been the former-emphasizing products more than people. Acer is, thus, repositioning itself to become a customer-centric intellectual-property and service company, as signified by its new slogan: "Acer, Bringing People and Technology Together." To Shih, intellectual property is the value added to the product. Acer adds value by enhancing consumer perceptions of the benefit or value of a product, based on know-how, packaging, design, accessibility, comfort, user-friendliness, and niche solutions-the tangible qualities of its products. This is how Acer is building on its already strong international brand, into a global brand. It wants to help people to enjoy their work and their lives.

2.2. Research and development

The globalization of markets, combined with the development of R&D clusters throughout the world, make it essential for Acer's enterprises and research institution to be increasingly integrated into an international R&D network. A multinational's strategic plan to capitalize on new opportunities upon its commitment and the effectiveness to its R&D function. Acer's success in branching out from mainstream PC systems and peripherals to new opportunities in software development, consumer electronics, communications and the semiconductor industry will be largely dictated by its efforts and consequent successes on the R&D front. An integral factor in the success of any multinational's R&D function is the degree to which it is positioned to capitalize on strengths leveraged through an individual country's developing technology capabilities. Globalization of the R&D function then becomes an integral part of the success of the entire corporation (Shih, S, 1996).

A major component of the vision for Acer promoted by Stan Shih involved further development of the company's R&D department. Shih conceived an Aspire Park which has been described as "half Disneyland, half think-tank" to create Internet products and software, to improve Acer's competitiveness globally. One of the important goals of the park was the development of Acer's software capability and hardware product lines. Aspire Park also encapsulated the concept of exchange ideas, creating an environment for innovation and creativity highly conductive to R&D development. R&D expertise and concentration of effort for the development of technology for PCs is very different from that required for technological development of notebook and server, and definitely different from that required for the development of software. Each division has its own marketing and after-sales support departments, allowing it to operate autonomously and with a more focused pursuit of its individual goals. Acer's three R&D labs, located in Taiwan, China and United State, would play a role in developing the company's software expertise, as well as concentrating on other R&D projects to advance the strategic vision: the increasing importance of the development of software to the organization.

2.3. Organization

To create an organizational structure to support Acer's