Acer Inc : Taiwan Rampaging Dragon

1372 WordsJan 16, 20116 Pages
ORGANIZATIONAL BEHAVIOR Case Analysis – Acer, Inc: Taiwan’s Rampaging Dragon EXECUTIVE SUMMARY 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…show more content…
The company improved its financial performance and the numbers were back in green after 3 years. The current asset to total liabilities ratio was slowly improving but it wasn’t at its best yet. The stock price was far away from what it was when the company was at its peak. Hence, there still were damages, which, if not repaired, could affect the company drastically. Ideally, working towards an improved financial and management structure should be the company’s area of focus under the present circumstances. To summarize, Acer is in a recovery mode and being aggressive is a bold step and could hurt them. The reasons why Acer could look beyond the Aspire project are listed below: 1. Firstly, the overall cost of initiating and running the Aspire Project is high. The return on investment is something that cannot be predicted with precision. Any deviation from the set earning benchmark would cost the company a great deal. 2. Secondly, with the growing competition, it is highly probable that Acer’s rivals launch a product similar to Acer’s Aspire. If the competitors manage to launch the product before Acer, that could hamper the projected sales figure for Acer. 3. Thirdly and most importantly, Acer’s Production expertise is located in Taiwan whereas AAC is a regional business unit that has no technical know-how on developing new products. Coordination between areas as distant as Taiwan and North America could
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