Strategic Analysis of Acer Incorporation

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Acer Inc. is the third largest manufacturer of PC in the world that uses transnational strategy in procuring it components for the purpose of maintaining cost leadership. In this respect, we have used PESTLE, Porter’s Five Forces model, and SWOT analysis for a comprehensive analysis of the external and internal Acer environment. From this, we have made a series of recommendation to Acer in order to retain its ranking. It is however recommended that Acer adopts Blue Ocean against its competitors by using product premium branding regardless of whether its with Ferrari or any other luxury brand. It is also recommended that Acer uses balance scorecard together with its alliances to drive innovation so as to increase the market share of Acer.IntroductionThis paper seeks to review in general terms the growth and performance of Acer over the past decade. The paper will analyze the environment in which Acer functions and identify the opportunities and threats to which it might expect to have to respond, and how are these factors likely to impact on the company in the near future. This will be done through environmental analysis (PESTLE, Porter’s Five Forces, and SWOT). The report will also make analyses of the resources and key capabilities of the company plus the factors that give the company its competitive advantage. This will be done through assessing the Industry Critical Success Factors, analyzing resources and capabilities and link the generic strategy. Background of the company Acer Incorporated is a multinational electronics manufacturer based in Taiwan. Its product includes desktops, laptops, servers and storage, peripherals, personal digital assistance (PDA), peripherals and e-business services for business, government, education, and home users. Acer Inc is the third largest computer manufacturer in the world after HP and Dell (Shaw Kotler, 2009). Acer Company owns the largest franchised computer retail chain in Taiwan, Taipei. The company was founded by Stan Shih, Carolyn Yeh his wife, and a group of five others in 1976 as a Multitech. Acer has since been the third largest computer manufacturing company in the world holding 9.5% of the market share, with its growth being experienced outside USA mature market, largely in emerging nations. The peripherals and PC industry is very competitive and Acer has maintained growth since 1999 with significant growth in revenues. The key competitors in the market include Dell, HP and Lenovo. however there is a fragmentation of the market with 46% of it owned by brands which have market share of less than 4% each. Acer seeks to increase its market share through release of premium PCs under Ferrari brand and expansion in LCD TVs with BenQ brand (Unruh Ettenson, 2010). Growth and performance over the past decade Acer has adopted various strategies to ensure that it remains competitive and retains its ranking at number 3. Acer strives to find a Blue Ocean against its competitors by using premium branding of its product from Ferrari or any other premium luxury brand and make determinations if