ACER AMERICA :

DEVELOPMENT OF THE
ASPIRE
Diksha Mahajan
Nidhi Kumar
Pranati Goswami
Pallavi Misra
Shweta Agarwal

Acer : Organizational Design

Commoners
Culture
Mid 1980s

Client Server
Model
Late 1980s

Client Server
Model (UniLoad)
1992

Loose cooperative of employees, suppliers,

distributors and mass market customers
Sense of family typical to oriental family owned
businesses
Committed stakeholders
Reduced risk and capital investment for Acer
Organized into SBUs and RBUs
SBUs take care of design, development and
production of PCs and components; also market
to OEMs
RBUs responsible for developing channels,
marketing Acer products and providing dealer
support
Manufacturing of modular parts by SBUs
Shipping of high cost and critical components
from Taiwan
Lower value added and low criticality components
sourced locally
Smiling curve structure of profitability in the
industry

Profit margin
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
1993

1994

1995

1996

1997

Product development: Aspire

Product objective
Develop a Wintel based PC with great design, ease of use and multimedia features

Consumer requirements
Home PC should be different from office PCs in design
Product cycle times of 6-9 months

Designed by Frog
Design

Product specifications
In built microphone and speakers
Easy to set up, start up and operate
Built in modem and answering machine; fax and telephone facilities bundled with the product

Manufacturing
Subassembly manufacturing
Software development
Sales and Marketing
Out of the experience: Stressed on ease of use
Priced between the high end and low end brands ($1199 and $2999)
Channel : Specialized computer electronics stores

ISSUES
Subassembly
manufacturing was
subcontracted while
AAC responsible for
integration.
Lack of
documentation

Externally designed
housing
incompatible with
standard
components
10-15% increase in
cost for custom built
parts

Uniload model
incompatible with
new product
development
Coordination
between 70
contractors was
difficult

Delay in
product
developmen
t
Lack of
build quality

Standard
peripherals not
matched with Aspire
color scheme

Geographical
challenges as
manufacturing was
based in Taiwan and
was being handled
by AAC

Differences in
prices and
positioning across
geographies

High rate of
returns
Increasing service
costs (8% of sales)

Obsolete inventory
Custom built parts
incompatible with
other products

Lack of
profitabili
ty
Reduced
sales

Autonomous RBUs
adapted Aspire to
local needs
increasing the
spare part
inventory cost
No economies of
scale

Marketing Challenges
Positionin
g
Pricing
Advertisin
g
Promotion

Conveyance of different brand message for every

geography
A single positioning will not be sufficient hence
increased cost
Differed based on geographies
Cannot be consistent since the product is positioned
differently
Certain geographies have increased advertising
budgets
Similar advertisements cannot be run across the
different regions
Inconsistency in promotion plans
Varied as per RBUs

Consistent Global promotion was not

possible

CLIENT-SERVER ORGANISATION
MODEL
ACER GROUP ORGANISATIONAL
STRUCTURE

VERTICAL DIFFERENTIATION
CENTRALIZING R&D AND PRODUCTS
DE-CENTRALIZING MARKETING AND
DISTRIBUTION

FRAMEWORKS
FIVE FORCES

RECOMMENDED STRATEGIES
ORGANISATION
AL

PRODUCT

CONTINUE CLIENT-SERVER MODEL

ESTABLISH NETWORK ORGANISATIONAL
STRUCTURE
INCREASE CO-ORDINATION AMONGST RBUs
INCREASED KNOWLEDGE SHARING AMONG BUs

OPTIMISE THE VALUE CHAIN FOLLOWING

STANDARD PRACTICES
PROMOTE LOW COST AND EFFECTIVE DESIGN
BUILD UNIFORM BRAND IMAGE
INCREASED SBU INVOLVEMENT IN PRODUCT
DEVELOPMENT

CONCLUSION

THANK YOU