Acer Inc : Taiwan Rampaging Dragon

1387 words 6 pages

Case Analysis – Acer, Inc: Taiwan’s Rampaging Dragon

Stan Shih founded Multitech, now known as Acer, in 1976. Empowered by Shih’s vision and management style, the company grasped every opportunity that came its way. It grew from a 11-employees company to a 5000 employees company in no time. The company, however, after generating profits for years, went through the painful professionalization of its management. Change in the competitive dynamics in the PC market coupled with the internal management problems faced by Acer resulted in the incurring of substantial losses. As Stan Shih resumed his role as CEO in 1992, after the board had unanimously declined his resignation, he had the responsibility
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Anticipating a disastrous 1991 result, Shih offered resignation, which was unanimously refused by the board. Leonard Liu resigned in May 1992 that meant the company’s day-to-day functions were back in the hands of the founder.

Acer’s recent strategies had failed. The management style was altered. It suffered from financial and management related problems. Stan Shih, however, chose to view the losses as learning and began to rethink the fundamentals.
Shih was confident of a comeback with his newly established vision of “Global Brand, Local Touch” philosophy and models like the Client Server Organization Model and The Fast Food Business Concept. Where the Global Brand Local Touch concept had the objective of turning Acer into a global organization without compromising on the deeply planted local roots, the Client Server Organization model followed the principle of leveraging ideas, principles and initiatives through Regional Business Units or Strategic Business Units without having the need to acquire permission or grant from the company head quarters. The Fast Food Business Concept focused on increasing sales margins through savings on logistics and inventory costs.
Unsurprisingly, the Midas touch of Stan Shih still worked and the company reported a return to profit in 1994 after three years of losses. The company’s turnover almost doubled and its capacity to pay off its arising liabilities through its