SWOT Analysis Strengths First and foremost Acer shows patience.

In 2000 Acer began the transformation to marketing and service of IT products. Since that time Acer has strengthened their corporate competitiveness by adopting a unique Channel Business Model, which allows firm control of brand name, marketing, technology and products, global logistics, and service capacity. The model also permits better understanding of consumer demand and profit sharing among partners. As a result, Acer ranks the world's fourth largest PC brand in 2005, and is working aggressively to secure third place by 2007. (Global.acer.com) Competitive advantages lie in its brand management strength, extensive global sales, marketing network, system implementation, and IC design (Global.acer.com) Acer's global expansion and diversity has spread its subsidiaries throughout the world. "The group was operating 80 offices in 38 countries around the world, employing more than 16,700 staff from 50 different nations" (Global.acer.com). Furthermore, it has "joint ventures with local partners...to develop into a publicly traded local company in various different countries while maintaining a global brand" (Mintzberg, Lampel, Quinn, & Ghosal, 2003, p. 223) Flexibility allows market penetration faster than the competition. Acer is flexible because it acts in many different countries depending on specific characteristics, and it is able of satisfying demand by using national suppliers. "The flexible client server business model...responding to the trend toward increased dispersion and local autonomy" (Global.acer.com). Furthermore, its subsidiaries constantly update relevant market information with the aim of acting when new products or market changes are required. "This structure allowed for faster decision making" (Global.acer.com). Faster decision making can mean short turnaround time. "The turnaround time from idea to market dropped to only one or two months" "The high turnover aided Acer in achieving a 34% return to equity" (Mintzberg, Lampel, Quinn, & Ghosal, 2003, pg 222). Thanks to this, Acer can offer the newest products before any other company. Acer's flexibility also lies in the products that they market and service. Acer is the largest manufacturer of mobile phones in Taiwan. (Global.acer.com) Lastly a very important strength, healthy financial status, Revenues in 2005 reached US$9.7 billion. (Global.acer.com) Weaknesses Inexperienced international managers and cultural differences between its national and international staff lead to inadequate access to distribution centers. "Outsiders sometimes found difficult dealing with the intricacies of Acer's organization" and "People from advanced countries tended to feel they knew better than headquarters"( Mintzberg, Lampel, Quinn, & Ghosal, 2003, pg 220). Image of Taiwan as low-cost, low-end product manufacturer was damaging to the name and image of Acer. Taiwanese industry is perceived as not as a quality products supplier. For instance: "Taiwan's reputation is for lowend products", "Consumers could not believe a Taiwanese company was capable of sophisticated technology" and "Made in Taiwan" had a low quality and low price perception. (Mintzberg, Lampel, Quinn, & Ghosal, 2003, p. 219) This affects company's quality image. The customers are not aware of Acer's brand name. The company is still suffering from low brand awareness in the US despite its top-ten position. Contributing to the low brand awareness, Acer might confuse consumers with too broad of a range of products. Opportunities Improve Acer's brand name awareness. The company is in a good position for creating a well-known brand name in all its markets because it has developed structures throughout the markets. "The use of joint ventures to build international capability . . . and help raise awareness of the Acer brand" (Mintzberg, Lampel, Quinn, & Ghosal, 2003, p. 223). Using its broad product base puts Acer in a good position because of the current convergence of the computer and consumer electronics markets. The company's structure is arranged for a possible return to its roots. Even thought the company wants to direct its strategy towards being an international IT distributor, it has the option to come back to its origins if the situation is bad. "...Acer always retained the option of returning to being a supplier of components and systems sold by the big

brand names" (Mintzberg, Lampel, Quinn, & Ghosal, 2003, p 228). The strength of Acers size and flexibility will allow the company to adapt to the rapidly changing computer industry. Threats There is a possible expansion barrier due to Acer's philosophy to spread its shares throughout all its subsidiaries and partners; the company could have problems of expansionism. "Taiwan enforced strict protectionist barriers against outside capital...no foreign institution permitted to own more than 7.5% of a listed company in Taiwan" (Mintzberg, Lampel, Quinn, & Ghosal, 2003, p 228). Lose of company's control is a negative consequence of Acer's share philosophy and the company's chief could lose control. "Without majority control some questioned whether he (Shih) could maintain his hold over the group" (Mintzberg, Lampel, Quinn, & Ghosal, 2003, p 228) Increased competition due to the movement toward disintegrated computer components. "North American and European markets are dominated by "big guns" like Intel and IBM - and Acer cannot compete on its own in these markets". (Sahai, n.d., p.8) The risk of substitute in the market is high because the competition is always developing new kinds of technologies which can be a substitute of the current products. This creates a high awareness among the companies that want to produce the newest products in the shortest time