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global marketing strategies

Denise Chisholm Unit 1 DB Global Marketing

Acer, Inc., manufactures and markets personal computers for the consumer and home office markets, as well as chips, monitors, keyboards, CD-ROM drives, and other hardware. For more than 15 years, Acer manufactured computers in Taiwan and shipped them to dealers throughout the world. By building and marketing computers under its own brand name, as well as supplying Hitachi, Siemens, and other companies on an "original equipment manufacturer" (OEM) basis, Acer became Taiwan's number-one exporter. Shih [the owner] realized that he should decentralize computer assembly in nearly three dozen locations around the globe and use a combination of locally purchased components plus components shipped in Taiwan, because of the fast pace of technological development. He developed a policy of "global brand, local touch" and organized strategic business units for manufacturing, regional business units for marketing, and empowered local management teams in individual countries to make decisions on a wide range of marketing mix elements. Shih continues to set ambitious goals for his company. To position Acer Shih envisions a corporate structure that he calls "21 in 21". Shih intends to break up Acer into a borderless network of 21 independent companies that maintain a close tie with Taipei, "Eventually," Shih said in 1995, "Acer will have a majority of local ownership in each country and no one will be able to say that we are a Taiwanese company."

One goal [of Shih's] was to be the fifth-largest computer company by the turn of the century; by mid-1998, Acer already ranked number eight. To position Acer for the next century, Shih envisions a corporate structure that he calls, "21 in 21." Shih intends to break up Acer into a borderless network of 21 independent companies that maintain close ties with Taipei. Fortune magazine described Shih's vision as "a global federation of highly autonomous Acer companies."

The problems in the U.S. market, however, may make it more difficult [for Acer] to reach $15 billion in sales by 2010. Shih still aspires to challenge Japan's dominance in the consumer electronics industry. To achieve these goals, Shih hopes to move beyond PCs and attain leadership in next-generation low-priced "information appliances." One new product is the AcerBasic, a computer that provides Internet access when hooked up to a television set. By competing in this segment, Acer will come face-to-face with a new set of competitors, such as marketing heavyweight Sony. Some industry observers believe that Shih should concentrate on supplying PCs to other companies. Shih maintains, "Brand is critical to our long-term success." Some industry observers disagree; as one analyst noted, "Brand name doesn't bring investors any benefit." He advises Stan Shih to give up his dream of becoming a global brand. To be blunt, the analyst said, "I'd pull the plug."

1. The Acer, Inc. case feedback was relatively ambiguous. Why would this be the case? (1 Paragraph)
2. What makes some global marketing strategies better than others and how do you know the difference? (1 to 2 Paragraphs)

Solution Preview

Acer is one of the world's top five branded PC vendors. It owns the largest computer retail chain in Taiwan. Acer's product offering includes desktop and mobile PCs, servers and storage, displays, peripherals, and e-business solutions for business, government, education, and home users.

Ambiguity lies in which strategy to follow:
Cost leadership: The cornerstone of Acer's strategy has been sharpening its cost efficiencies to maintain its position as the lowest-cost producer of its products. This not only translates into cost leadership but also acts as an entry-barrier for the other players thinking of entering into the market. This strategy has made ACER to be leading OEM supplier to ...

Solution Summary

This explains the types of global marketing strategies