Acer Groups Chine Manufacturing Decision

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In this paper we will analyze Acer Group’s situation in 1998 as it considered entering China. We compare China to India, another emerging country using various criteria such as labor and cultural differences, and determine that entering China is a sound decision and the timing is good as well. We then evaluate China’s 5 Special Economic Zones, to recommend a location for Acer’s new manufacturing facilities. After comparing different SEZ, taking in account labor, GDP as a measure of living conditions, and other factors such as distance to Hong Kong, we determined that the city of Shenzhen would be the most attractive location. Founded in 1976, the Acer Group is a Taiwan-based multinational company that produces PCs, laptops, and computer components around the world. Initially, it did not sell any of the products it is currently famous for. It was merely a distributor of electronic parts, but over time emerged as a global PC manufacturer. Under the guidance of Chairman and CEO Stan Shih (retired in 2004), Acer reached great success in terms of both global market dominance and profit: Acer was the market leader in 13 countries around the world, and was ranked in the top five in more than 30 nations globally. Today, Acer is the second largest PC manufacturer in the global PC market after Hewlett-Packard (See Figure 1). In the fourth quarter of 2009, Acer ranked second for total PC and notebook shipments of over 12 million units. According to iSuppli, a market research and consulting firm specialized in the electronics value chain, Acer’s worldwide success can be attributed to its continued aggressive pricing strategy, strong notebook shipments, and robust regional performances in both the European and U.S. markets. Background Information Under the global mission statement, “fresh (meaning innovative in Acer-speak) technology enjoyed by everyone, everywhere,” Founder

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