Acer - "divide and Conquer"

1. Acer's strategy has been described as "divide and conquer." Compare and contrast this to Lenovo's strategy.

The reason why Acer's strategies has been described as a divide and conquer strategy is that they "discovered that building brands in the business-to-business market is easier than building brands in the business-to-consumer market." (A., 2011, p. 36) Many consumers are usually emotional in picking brands, which is a major reason why Acer has had terrible entering into the American market because of well-known global companies for Americans to pick.

Comparing Acer's and Lenovo's strategy you have to first look at the fact both companies have poor brand recognition globally. So in afford to become more globally known especially in the United States they both acquired established companies. First Lenovo's strategy included the purchase of IBM's ThinkPad notebook business in 2005. Then Acer's strategy included the purchase of U.S.-based computer company Gateway in 2007.

The biggest contrast between Acer and Lenovo's strategy start with location because Lenovo's is the biggest computer company in China while Acer's is the biggest computer company in Taiwan. In addition, Acer "international identity gives the company access to advanced business practices, technology, and economies of scale that companies like Lenovo do not have." (A., 2011, p. 37) Another contrast between the two companies is after their big acquisition Lenovo had to lay off workers because they only own 7 percent of the market while Acer in double digits now has not had to make any changes while also moving within 2-percentage point away from market leader Dell.

2. Explain how the "global markets-local markets" paradox figures into Stan Shih's strategy for China.

Dr. Deborah Hill

CASE 1-3 "ACER"

1. Acer's strategy has been described as "divide and conquer." Compare and contrast this to Lenovo's strategy.

The reason why Acer's strategies has been described as a divide and conquer strategy is that they "discovered that building brands in the business-to-business market is easier than building brands in the business-to-consumer market." (A., 2011, p. 36) Many consumers are usually emotional in picking brands, which is a major reason why Acer has had terrible entering into the American market because of well-known global companies for Americans to pick.

Comparing Acer's and Lenovo's strategy you have to first look at the fact both companies have poor brand recognition globally. So in afford to become more globally known especially in the United States they both acquired established companies. First Lenovo's strategy included the purchase of IBM's ThinkPad notebook business in 2005. Then Acer's strategy included the purchase of U.S.-based computer company Gateway in 2007.

The biggest contrast between Acer and Lenovo's strategy start with location because Lenovo's is the biggest computer company in China while Acer's is the biggest computer company in Taiwan. In addition, Acer "international identity gives the company access to advanced business practices, technology, and economies of scale that companies like Lenovo do not have." (A., 2011, p. 37) Another contrast between the two companies is after their big acquisition Lenovo had to lay off workers because they only own 7 percent of the market while Acer in double digits now has not had to make any changes while also moving within 2-percentage point away from market leader Dell.

2. Explain how the "global markets-local markets" paradox figures into Stan Shih's strategy for China.

The global markets-local markets paradox that figures into Stan Shih strategy for China include how he wanted to build a solid market base in greater China and then look to expand the business to the rest of the world. Shih also viewed the China market as being a critical move for a Taiwanese company to become global. Even though Acer has most of their factories in China now because of Taiwan joining the WTO in 2001 and it eliminating limitations on foreign investment it still sources most of its products from Taiwan. Shih strategy of global markets-local markets for China is also idea for his business to grow because of two reasons. First,