Project

On
ACER Computers

Group

Isha Arora 20100

Kanuneet Bhatiya 20100

Lara Pinto 2010090

Pavan Pennada 2010097

Piyush Malani 2010098

Preeti Machhar 2010099

Priyanka Bhatiya 2010100

Sarika Sinha 20101

HISTORY
Acer was founded by Stan Shih, his wife Carolyn Yeh, and a group of five others as
Multitech in 1976, headquartered in Hinchey City, Taiwan. It began with eleven
employees and US$ 25,000 in capital. Initially, it was primarily a distributor of electronic
parts and a consultant in the use of microprocessor technologies, but over time it
emerged as a PC manufacturer. The company was renamed Acer in 1987. In 1993, Acer
posted record profits of $75 million; 43 percent of that year's net was generated by the
DRAM joint venture, considered "the most efficient in the DRAM industry" by some
observers. Total sales grew to $3.2 billion in 1994, and net income increased to $205
million, as Acer America turned its first annual profit in the 1990s. From 1994 to 1995,
Acer advanced from 14th to ninth among the world’s largest computer manufacturers,
surpassing Hewlett-Packard, Dell, and Toshiba. Acer began its foray into laptops with
the purchase of Texas Instruments mobile PC division in 1997.

Spinning-off
In 1998 Acer reorganized into five groups²Acer International Service Group, Acer Sertek
Service Group, Acer Semiconductor Group, Acer Information Products Group, and Acer
Peripherals Group. Two years later that corporate restructuring did not appear to have
made a significant impact on the company overall and stock prices were sliding.
Shi h restructured again. To dispel complaints from clients that Acer competed with its
own products and to alleviate the competitive nature of the branded sales vs. contract
manufacturing businesses, Shih spun off the contract business, renaming it Wistron
Corporation. The restructuring resulted in two primary units²brand name sales and
Contract manufacturing. The restructuring also resulted in Acer breaking off several of
its smaller operations, including semiconductor design, consumer electronics, and liqui
d-crystal di splays. Early signs indicated that the spinoff strategy had worked well,
Especially in Europe, where Acer became a popular PC brand. In 2003, company sales i
ncreased 48 percent to $4.6 billion, and helped Acer surpass Japan's Toshiba and
NEC, making it the world's fifth largest manufacturer of PCs.

Acer increased worldwide sales while simultaneously reducing its labor force by
identifying and using marketing strategies that best utilized their existing distribution
channels. By 2005, Acer employed a scant 7,800 people worldwide. Revenues rose from
US$4.9 billion i n 2003 to US$11.31 billion i n 2006. Acer's North American market share
has slipped over the past few years; while in contrast, the company's European market
share has risen.
On 27 August 2007, Acer announced plans to acquire its US-based rival Gateway Inc. for
US$710 million. Acer's chairman,
J.T. Wang stated that the acquisition "completes Acer's global footprint, by
strengthening our United States presence." Included in this acquisition was the
eMachines brand. In January 2008, Acer announced that it had acquired a controlling
interest of 75% of Packard Bell. In 2009 Acer acquired E-TEN and 29.9% of Olidata. In
October 2009, Acer passed Dell as the world's number 2 PC makers.
PORTERS FIVE FORCES(Applied to PC Industry)
The Porters five forces reveal a number of factors that are important in this industry.
The aspects of Porter’s five forces analysis is:

Competitive Rivalry - This can be considered high in this industry due to the shifting
dynamics of consumer behavior and expectations. A small number of large scale
players have made it difficult for the smaller players to compete; hence there is the
trend of mergers and acquisitions taking place. Furthermore, the shift in dynamics are
creating competition between companies own brands and the OEM brands.

Threat of new entrants - However, as the companies become larger, the Threat of new
entrants increases in this industry since the initial costs to enter the industry are
relatively low for small players.

Buyer Power in this industry is high since there are other major scale players in this
industry for customers to choose from such as Dell, HP, Compaq, Toshiba and
unbranded manufacturers that assemble from home.

Supplier Power can be viewed as medium, since there has also been a shift in this
industry due to high number of suppliers. The need to speed up OEM production in
order to remain competitive has forced professional OEM firms to emerge to meet this
demand. Also, large scale suppliers having other do not want to change to meet
ACER’s need yet, since smaller suppliers cannot afford to change.

Threat of Substitutes -This industry appears to have no Threat of Substitutes at this

time.

5C’s
 Customer Needs
By given customers a new experience by innovation and low cost
computers Acer also tries to satisfies customer by facilities like authorized
customer service station, fully dedicated customer support telephone
lines etc.
 Company skills
SWOT Analysis

Strength
 Acer has many innovations like the Aspire One laptop that let the user
connect to the Net almost anywhere with 8 hours of battery live. Acer presented
the Tempo Smartphone series in 2009 to compete in the lucrative mobile phone
market. Acer main factory is located in Taiwan which has low-cost labor and
distribution advantage in the US market and Asian market. Acer price its
products with low competitive prices to compete with the strong rivals and
acquire the low-priced laptop market share.

Weaknesses
The PC, laptop and mobile phone markets are extremely competitive and
require frequent innovations to keep up or exceed the customers’ expectations.
The laptop customers expect new functions and improved computing power at
least once every year. Innovations and changing market demand needs strong
and flexible supply chain to execute the successful innovations and deliver them
to the market before the competition.

Opportunities
Acer had competed on delivering a reliable PC’s and laptops at a
competitive price. Similar market entry model would be useful to enter the
eBook Reader market and the iPad market. Acer would be a good competitor in
the eBook Reader market and had the ability to enter a new market of acquire an
existing manufacturer. Acer was successful in acquiring Gateway©, emachines
and pockard bell (Acer inc., 2010). This success will help Acer to integrate its
existing assets or set up new manufacturer to producer eReders or similar
products that does iPad functions. Acer can also compete in the Asian market by
using its low price model. The Asian market is huge and would consume many
of Acer’s products if marketed well.

Threats
The laptop and PC market are extremely competitive. Both products need
management support to invest in the Research and Development departments.
Research and development departments would consult between each other to
produce new competitive products that can be produced from the current
integrated ability for Acer’s subsidiaries. The innovation will continue as long as
the workers are compensated and the subsidiaries are willing to compromise for
the sake of benefiting the holding company.
 Competition
ACER’s major competitors in the global computer industry are:

Hewlett-Packard/Compaq
HP provides personal computers, imaging and printing products, access
devices, consulting, and IT infrastructure services to both individual and
enterprises customers. The company, founded in 1938 and based in Palo
Alto, California, has a presence in 170 countries across the globe. HP
maintains excellent account management for its largest global enterprise.
HP is setting the standard in the notebook industry with the best
combination of advanced features and extremely competitive prices.

Lenevo Group Limited

Lenovo Group Limited is the largest personal computer manufacturer in
the Asia-Pacific region. The company produces desktop, laptop, servers,
handheld computers, imaging equipment, and mobile phone handsets. It
also provides information technology integration and support services.
The company has executive headquarters in Beijing, China and in
Morrisville, North Carolina, USA. Lenovo’s consumer strength and
market leadership in China can let Lenovo and IBM successful in the
world fastest growing IT market. IBM will be the preferred services and
customer financing provider to Lenovo. The promise Lenovo brings to the
channel is of a well-capitalized company with low production costs that
can go toe-to-toe with Dell. Since Lenovo is now a global brand name, the
company cannot count simply on high-end models for the business sector,
and hence, has to develop Lenovo-branded notebooks targeting the
consumer segment, a weak segment for the ThinkPad line.

Dell Computers
Dell computers is a multinational information technology corporation
based in Round Rock, Texas, United States, that develops, sells and
supports computers and related products and services. The company is
one of the largest technological corporations in the world, employing
more than 96,000 people worldwide. According to a filing with the
Securities and Exchange Commission.[citation needed] Dell is listed at
#38 on the Fortune 500 (2010). Fortune also lists Dell as the #5 most
admired company in its industry. Dell has grown by both organic and
inorganic means since its inception—notable mergers and acquisitions
including Alien ware (2006) and Perot Systems (2009). As of 2009, the
company sold personal computers, servers, data storage devices, network
switches, software, and computer peripherals. Dell also sells HDTVs,
cameras, printers, MP3 players and other electronics built by other
 manufacturers. The company is well known for its innovations in supply
chain management and electronic commerce.

SWOT Analysis (Comparison)

DELL HP LENEVO
Strengths  The Direct Model  Business position.  Strong sale position in
DELL is using.  World’s biggest mainland (china) as
 Inventory computer hardware 90% of sales from
turnaround time and peripherals China.
and well controlled consort in the world  Strategic alliance with
relationship with after merger with suppliers.
suppliers. Compaq.  Quick responsiveness.
 Customization of  Operating in more  Mass manufacturing
products according than 170 countries. capabilities.
to needs.  Increased  Strong research and
 Good position to competitiveness development.
target the business through policies and  Low production cost.
executive segment. strategies that
supports free-market
economies.
 Prominent Brand
name.
 Successful Strategic
Acquisitions.
Weaknesses  Targeting college  Long term debt  Poor brand perception.
student segment of keeping it from  No pure electronic
the market. investing in different sales.
 Buyers can’t growth opportunities.  After sales services not
physically touch or  Its touch pads are adequate.
see the product finicky, unreliable and
they want to difficult to use, needs
purchase. improvement.
 Customization  The mouse buttons
are clumsy to use.
 Poor shelling life.
 Pairing of some heavy
software’s with slow
hardware.
 It did not yet hit a
CMDB product that
includes discovery
 and mapping.
Opportuniti  Growth of market  The recent acquisition  PC sales to grow
for laptops then of EDS puts HP at a  Fast growing
es desktops. strong position. International market
 Delivery of  Customer Solutions  Increasing global
personalized Group that helps in demand.
computers in a selling the complete IT  Growing wireless PC
hassle free solutions, products market
environment. and services  Internet Boom
 Increased  Signing of
communication memorandum of
and technological understanding with
integration. USA
Threats  Price difference  Changing  Price war
between brands technologies and  Maturing market
getting smaller. addressing the  Local and International
 Slowing growth changing customer competitor.
rate of computer demands and needs.
industry.  Global economic
 Change in recession.
technology and
innovation.

 Collaborators
A comprehensive collaboration is between TSMC and ASMI in IC
manufacturing technology, capacity support, and management. It also has
collaboration with Kesmai Corporation, the world leader in online
multiplayer games, and Singapore-based Acer Computer International,
Ltd. (ACI) has an alliance to make a selection of titles from Kesmai's
online games service, GameStorm.

 Context
Computer products present the trend of mass production and
personalized design. Innovation and convergence are trend in the
industry, and stepping up efforts to build industry chain becomes part of
enterprises' competition strategy. The external environment of a company
consists of outside conditions that affect the firm’s performance. An
analysis of this external environment allows a firm to identify the key
conditions that affect it and the industry. The external environment of the
computer industry has been analyzed in the light of political and legal,
economic, social, technological and environmental factors. Such external
 factors usually are out of the firm's control and sometimes present
themselves as threats.

 Political and Legal

Political factors include government regulations and legal issues
determining the conditions under which companies have to operate. In
this field, the computer industry has to face certain restraints. Problems
can arise in countries where political stability is not guaranteed, no matter
whether companies operate production facilities or if they do business
with that country through exports.
Many countries still have restrictive policies which are maintained to
protect domestic manufacturers and production. Such policies often
hinder foreign companies from entering into these markets. The only
possibility to do business in those countries is to establish partnerships
with local companies, where they are additionally forced to accept
minority shares and to provide money and technological know-how.
Hardware industry gets considerable support from the Governments in
Eastern countries leading to high production and reduced cost of product
in the region. Now more than ever government agencies are seeking
assistance with technology and project support. Policies such as duty free
import of Laptops in India as a personal baggage have helped a lot in
increasing the penetration level of the product among the consumer
population. Schemes like One Laptop per School in India and One Laptop
per Child by UN may prove to be a big opportunity Laptop industry also
faces stringent environmental laws in many countries due to hazardous
material found in some computers. Both Japanese and American
companies are forming alliances with European companies to strengthen
their ability to compete in 25-nation EU and capitalize on the opening up
of Eastern European markets.

 Economic
The computer industry expects a growth of approximately ten percent
over the next few years. This growth is influenced by the economic
situation in a specific country, having an impact on the purchasing power
of potential customers.
Price is an important factor and hence inflation or fluctuating currency
rates in a country might adversely affect the industry and margins The
Import-Export liberalization, Exchange Rate fluctuations also impact the
sales in computer Industry because their supply chain is globally
integrated. Real GDP (Gross Domestic Product) growth, rising consumer
confidence and currency exchange rates all provide insight into the health
of the computer hardware industry. India has low technology penetration
and much room for industry growth.
  Social
National demand for computers is dependent on the educational level in
a country. In the past the demand for laptop computers comprised only of
businesspeople. Now, college students’ demand represents a considerable
percentage of the total demand for laptop computers. Also children are
getting familiar with the use of computers at a very young age. Executives
and managers are spending more time working away from the office. The
brand image of a computer and lifestyle trends get more and more
decisive for the purchasing decision. The computer industry adapts to this
trend, example by offering a wider range of notebooks and by trying to
create a strong brand name.

 Technological
Because the rate of technology innovation has greatly slowed, the
opportunity for companies to compete on the basis of rapid, significant
changes has almost completely been eliminated. Even then, technology is
the most important determinant in laptop industry as crucial low cost
leadership can be achieved through technological advancements and it
also provides easy differentiation to the company. Increased Research &
Development have caused permanent innovation processes which lead to
short product life cycles resulting in a faster depreciation of the products.
The educational potential of computer based technologies is wide-
ranging. Introducing computer based systems not only to manage student
interactions, but also to support differences in learning paths and styles,
will allow more effective a commendation of a wider range of student
experiences and preferences.

 Environmental
The computer industry has over time identified many environmental and
energy concerns associated with the manufacturing and use of
equipment; including potential phases for recycling, remanufacturing,
and reuse. New designs often require rethinking the materials selection
choices for electronics, the kinds of resources and substances used in
manufacture, and also the creation of new production techniques.
Therefore, the industry has begun to coordinate supply chain analysis of
environmental issues so that final manufacturers have better knowledge
of the impacts of the components they purchase from suppliers around
the world, which consequently leads to a positive image in the industry.

4 P’s
Product
The Product range of Acer consists of-

Travel Mate notebooks. Acer’s business range of notebook empowers business users
with a strong focus on ease of use, mobility and dependability. They incorporate
innovative features such as disk anti-shock protection, Signal Up wireless technology,
ergonomic keyboards and smart card security.

Ferrari Notebooks. The Ferrari notebook is packed with technology that is inspired by,
and inspires, passion. Sporting the patented Ferrari Red color, the elegant design and
advanced features of this notebook combines the essence of two world-leading
companies, Acer and Scuderia Ferrari.

Aspire desktops and notebooks. Aspire is Acer’s most prominent brand for the
consumer desktop and notebook market. Acer’s Aspire notebook PCs bring new
technology to a wide range of users at a great price, while Aspire desktop PCs extend
the functionality of the home PC to cover all aspects of multimedia entertainment. Acer
has also invested significantly in developing a range of digital home products.

Netbooks. Acer’s range of netbooks are internet devices designed to make online
activities mobile, fast and convenient.

Veriton desktops. Acer Veriton commercial PCs are for businesses that require
practical and easy-to-manage solutions. Veriton PCs are built for peak performance
with advanced security features, proven reliability and productivity tools that make
business sense.

Pricing
To build a strong brand image, From the very beginning, was the great challenge, and
Acer’s products were positioned more at the higher end of the market than any other
Taiwanese products had been previously. For example, when entering the Japanese
market, Acer priced its products the same as the Japanese to avoid the poor-quality
image associated with lower priced products. This was an important signal emitted by
the brand that Acer-branded products were not to be classified as commodities.

Place
For its internationalized model, Acer started to opted for expanding its market in some
areas that drew less interest from some famous international enterprises, such as South
Africa, Malaysia, Mid East, India and Russia, followed subsequently by its expansion in
Europe by virtue of the successful multiple distribution model which was later
duplicated to China and US markets. When expanding its business in China, Acer
brought up the point that expansive hinterland shall be the company’s support and
backup to develop its international brand. In the context of lacking the expansive local
market to develop the future international markets for Taiwanese enterprises in their
mother land, Taiwanese enterprises shall consider China markets as the first step to
march toward internationalization. Differentiated from Acer’s internationalized model,
the attributes of products would contribute to the preceding different internationalized
models.

Promotion
In additional to traditional forms of promotion it promotes its products through Sports
Marketing. It has an association with Ferrari for formula one championship. It was
official technological partner for Beijing Olympics games and also Vancover winter
Olympic Games. It also promotes its brand by organizing Technical competitions in
Education Institution.

STP
Targeting
Acer is pursuing a multi-brand strategy. Through acquisition, it now has four main
brands and a host of smaller sub-brands. Gateway in the United States and Packard-
Bell in Europe are targeted at lifestyle buyers who like trendy, premium designs. The
Acer brand is aimed at more technology-savvy customers who like to feel in control.
Finally, eMachines is for price conscious buyers who like simplicity and value. Not all
brands will be used in all markets.

Segmentation
Acer divides its market depending on economy. Three types of market economies can
be labeled as developed, emerging, and surviving. Developed markets are comprised of
people with the purchasing power to fulfill all of their needs, approximately 1 billion of
the earth’s population. Emerging markets are comprised of 2 million people with
minimal purchasing power. Surviving markets are comprised of 3 billion people with
unmet basic needs. Hart and Milstein suggest that long-term multi-national corporate
global sustainability requires investment in all 3 markets, with separate strategies for
each.
Positioning
Acer adopts soft resort for its hardware products positioning as it stresses that all
designs are concern-oriented, including “easy dependable,” as it shows concerns to
clients’ mood to use the hardware. In comparison to Acer’s peers, the brand positioning
for Apple’s innovation, Dell’s direct sale and customization, Intel’s leading positioning,
and Sony’s thin-and-light Design. Acer shall express its soft resort of concerns and easy
dependable concretely to help customers build their brand identity: Acer produces the
world’s best “easy dependable” laptop which has the least probability of crash and
establishes the most reliable repair and maintenance services.

MARKETING AND CHANNEL STRATEGY

Marketing strategy
Acer adopts different marketing strategy according to different countries Acer’s
marketing strategy lays stress on channel and service, while its multi-distribution
model and customer services have help the company achieve No. 1 notebook sale in
Europe. Acer follows door-to-door repair service in Taiwan market.

Channel Strategy: Direct Retail

Acer has adopted the Direct Retail sale method. The first step of direct retail is
cooperating with main distributors which have a huge scale in each country, creating
its own information management system, and cutting logistics down to reduce the cost.
There are a lot of wholesalers and middlemen to share limited profit in traditional sale
modals. Acer can directly deliver its goods to its dealers and distributors without
wholesalers and middlemen. After, Acer not only uses the money to its dealers and
distributors for education and marketing training but also maintained its dealers’ and
distributors’ profit from dealers and distributors and further it decreased the sale price
of its product to benefit his customers as well Dealers and distributors can share more
profit by this way. In other word, Acer only plays the role that is responsible for
managing brand. Acer never does whatever its dealers and distributors can do. On the
other hand, Acer only does what they cannot do. This way can be used to all markets in
the world.
Acer is one of the few multi-brand technology companies, which this gives them four
distinct product lines. The entry level eMachines line, the mid-level Acer line, and the
two premium lines Packard Bell in Europe and Gateway in the rest of the world.
BRANDING
Acer's brand value is estimated to US$1.401 billion. Acer primarily target four key
markets: education; state and local government; system integrators, private label and
OEMs; and small and mid-sized businesses. The Branding Activities of Acer focus on
PR activities and placing their brand in tech savvy youth industry. Firms like
Prudential Real Estate and Citicorp will be featured in testimonial print ads
highlighting each of Acer's key markets, plus servers, the Travel Mate notebook line
picked up from Texas Instruments and new Acer Power. The consumer effort via
Edelman PR, Palo Alto, Calif., targets first-time PC buyers with a quality and
affordability message similar to those offered by carmakers Toyota and Honda.

Acer also appoints the leading celebrities of the respective countries in order to
establish their brand in the tech savvy brand-conscious youth segment. In the recent
Acer signs Hrithik Roshan as brand ambassador for India. Adnan Siddiqui has been
appointed as Acer’s Brand Ambassador in Pakistan; Adnan Siddiqui is the top talent in
Pakistan featured in many holly wood movies and Derek Ramsay as their Brand
Ambassador or US operations.

Further Acer changing their branding strategy Acer has hived off its products portfolio
into three separate brands. This is in line with Acer’s global strategy where the
company is introducing three new brands – Gateway, eMachines and Packard Bell in
all its key markets. While its core brand Acer will continue to remain the mainstream
brand, the newly-launched Gateway brand will target the premium and style conscious
segment.

However, the company is not bringing the Packard Bell brand to Asia as it targets a
similar audience as the Gateway brand. Acer’s products under the Gateway umbrella
will complete with brands like Sony Vaio and HP Pavillion in India. Company formed
a alliance with Tata Group’s chain of consumer electronics Croma. With eMachines
company is looking to target B and C segment customer in India

Further Acer has to improve their market image as technical support provider or
support after sales. Acer has been getting bad reps from Recall and many other issues.
Acer must get better customer service representative. Most Acer Helpdesk I have
spoken to seemed to be read from script and don't really know about computers in
general this give really bad after sales impression. So they must QA before hiring
helpdesk person and provide them equipped training.

REFERENCES