International Business Acer - Case Study Example

The business world has changed a lot during the last thirty years due to the commence of the information age which later became the internet age in the 1990 and now the 21st century has become the broadband age. The case study analysis visualizes a company that utilized organic growth to become a global force. The setting of the case takes place in the middle of the 1990’s when the computer industry was in its growth stage. The company achieved its early success due to corporate culture in which the employees were visualized as family.

The company showcased in the paper, Acer Corporation, underwent a transformational change and is currently facing operating decisions that will impact their future trajectory in the marketplace. Introduction In 1976 Stan Shih a Taiwanese entrepreneur founded high-tech firm called Multitech. Mr. Shih believes in the power of unity and that its human capital was the key to build a strong organization. He gave away a lot of the firm’s as compensation bonuses to many of the loyal employees of the company.

The CEO believed that running the corporation with the philosophy of a family unit environment would pay off in the long run. Stan Shih was right. During the first 9 years of existence the company went from $3000 in annual sales to $51.6 million in revenues by 1984 (Bartlett & Ghoshals & Beamish, 2008). Four of the shared beliefs of the organizational culture Shih developed are: Human nature is essentially good Accountability in business affairs The customer is always top priority A norm of sharing effort and knowledge (Bartlett et, al. 2008). In 1989 the company underwent a major managerial change when Shih stepped down as CEO an assigned Leonard Liu as the new CEO and president of AAC.

Shih had lots of experience directing multinational corporations and dealing with foreign affairs. When he stepped he tried changing the company culture by implementing straight business approach. He did so good such entering into joint ventures agreements and acquiring companies that increase the value of the firm. Some of his moves such as the Altos acquisition cost the company money when Altos a year after the acquisition incurred in $20 million in losses. Shih felt he was letting the shareholders down and wanted to retire altogether, the board of directors refused his letter of resignation and a year later named him once again CEO of the company when Lie’s resigned due to his inability to managed the human resources adequately.

In 1995 the company wants to launch a new product to masses. The product is called Aspire. Problem Identification Mr. Shih since coming back as CEO of the firm implemented many changes. He went to the original philosophy of running a family oriented business. He also implemented some of Liu ideas such as running a decentralized operation. The Multitech brand was lost due to copyright infringement. At point Acer was born. Shih faced the challenge of having to build a new brand image. There were internal struggles among the top management of various business units who did not like the new trajectory of the company.

The company in 1995 was in the process of new product rollout. A problem statement that describes the situation at Acer is: Acer Corporation needs to find an alternative in order to implement and get support from the executive staff of the company in order to achieve a global launch of the Aspire product. Corporate Issues Acer Corporation is facing multiple issues that negatively affecting the possibility of the company achieving its goals. Five issues that are affecting the company are: Lack of experience with major global rollout of its products Internal conflict among the managerial staff High ownership of common stocks by employees is affecting the company ability to raise capital in the stock market.

Problems in its human resources concerning conflict associated with the corporate culture Mr. Lui started the company on a path that diminished the firm’s ability to create value in the long term because he failed to get feedback from his staff and work in an authoritarian manner. Despite his resignation he change the trajectory of the company and place pressure on Shih to change things around Alternative Solutions A1 Acer Inc. has experience in the global marketplace, but they need greater knowledge in order to go after the mainstream and increase its market share from its current 9th position as of 1995.

A solution that could facilitate the process of the Aspire Project is a joint venture. A joint venture is a partnership between two companies to form a new business entity in which the players work together and share resources such as human capital, technological expertise or knowledge, and share in the investment at the stipulated terms and agreements (Kotler, 2003, p.392). A2 The founder of the company is trying radical changes in its company in order to change the corporate culture. The Aspire project requires the full support of the entire executive staff and management team.

A solution that can help the company realized its short, medium, and a long term goal is the utilization of change management principles. Change management refers to making changes in a planned and systematic manner in order to transform a business entity (Nichols, 2008). A good implementation plan to utilize change management can be achieved following five basic principles. The five principles are: Different individuals react differently to change Every human has fundamental needs that must be met Change implies a short term loess, since the employees need time to adjust to the learning curve The expectations of a company must be realistic The factor of fear within an organization must be attended immediately (Teamtechnology, 2009).

A3 Acer Corporation has shown in the firm’s ability to survive and adapt to market changes in the past. Currently the company is facing the challenge of a major global rollout of an innovative product. There is internal friction among the decision makers in the company concerning the company’s capabilities for such a move. The company has tried implementation a decentralization of its operations. The rollout of Inspire requires the company to be working in a synergetic mode in order to achieve its objective.

An alternative for the company is to hold back the rollout for a period of three to six months in order to perform a viability study to gather information about the impact the strategic move would have in the different business units of the firm. Optimal solution The optimal solution for Acer Corporation is combination of alternatives A2 and A3. The company has great product that can penetrate many global markets and increase the firm revenues significantly. The organic growth model used in the past can be applied to the current scenario for the company of a global rollout of the Aspire product line.

The initial intention of the company was to price the Aspire computers at the midpoint between lower price and expensive personal computers. The company must lower its prices as much as possible in order to have an opportunity of penetrate markets faster and at greater proportions. The company historic achievements prove that they are capable of continuing with the Aspire project on their own. The project must be delayed one to two trimesters in order to prepare online courses and live seminar on the benefits of change management.

The investment in educational activities will improve the productivity of the company’s work staff. Conclusion The corporate world has become more competitive than ever. In order for companies to differentiate themselves they can utilize brand image as business strategy to spur greater customer retention rates. Empowering employees is human resource practice that can reap great benefits such developing leadership abilities. In the case of Acer the best strategic move is to wait six months for the global rollout in order to utilize that time to instill professional development to its managerial employees in areas such as change management, interpersonal skills, and analytic ability.

In order for Acer to succeed in the future it must react faster to market changes than the competition and continue developing its human resource capital. References Bartlett, C, Ghoshals, S., Beamish, P. (2008). Tranformational Management (5th ed.). New York: McGraw-Hill Irvin. Kotler, P. (2002). Marketing Management (12th ed.). New Jersey: Prentice Hall. Nickols, F. (2008). Change Management 101: A Primer. Retrieved April 15, 2009 from http://home.att.net/~nickols/change.htm Teamtechnology.co (2009). Change Management: Five basic principles and how to apply them.

Retrieved April 13, 2009 from http://www.teamtechnology.co.uk/changemanagement.html