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Case Study - Acer's Growth Strategies

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Case Study - Acer's Growth Strategies
In 2007, Acer Inc. (Acer) was the third largest computer company in terms of world-wide personal computer (PC) shipments. With 2.43 million units shipped, the company enjoyed a market share of 7.6%. Its growth rate stood at 31% against the 30% of Hewlett-Packard Company (HP) and 21% of Lenovo Group Ltd.

In the first quarter of 2008, the company sustained its performance and its market share grew to 9.5%. Its growth rate of 25.2% was higher than that of Dell Inc. (Dell) and Lenovo.
Analysts felt that the company had come a long way since 1994 when it was the number eight player in the global PC market.

According to analysts, Acer's rapid growth could be attributed to the restructuring efforts the company had taken up since the year 2000. Acer's restructuring enabled the company to realize lower operating expenses which provided the twin advantages of allowing it to price the PC aggressively and offer higher incentives to its channel distributors.

Acer also refocused its marketing efforts from direct sales to indirect channel driven sales. The company opted for achieving growth through building strong relationships with its dealers, by offering lower prices to the consumers and providing unique product innovations.

By 2007, Acer was the fourth largest computer company behind HP, Dell, and Lenovo. As a part of its growth and expansion strategies, Acer acquired Gateway, Inc. (Gateway) in 2007.

This acquisition also resulted in the acquisition of Packard Bell (a major player in the Western European PC market) by Acer as Gateway had a controlling stake in Packard Bell. The acquisition also established Acer as the third largest computer company.

In India, Acer partnered with Wipro Infotech Ltd. in the initial years. In the year 1999, Acer opened its own full-fledged Indian subsidiary. It initially concentrated on…...

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