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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.1
In the first quarter
of 2008, the company sustained its performance and its market share grew to
9.5%.2 Its growth rate of 25.2% was higher than that of Dell Inc. (Dell) and Lenovo.
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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. In
December 2000, Acer split its PC-system manufacturing business unit into
a new division and this was incorporated as a separate company, Wistron
Corporation, in 2002.
In 2001, the name of Acer Communications and Multimedia was changed to
BenQ and it started operations as an independent BenQ brand. Acer
focused on providing Acer-brand IT products like desktop PCs, home PCs,
mobile PCs, servers, and Internet appliances.
BenQ, on the other hand, offered digital life devices like mobile
phones, LCD and CRT monitors, digital projectors, plasma displays,
optical storage, and imaging products. In 2006, Acer left the board of
BenQ in order to avoid conflicts.3
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 2007.4
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.5 It
initially concentrated on selling to government organizations and
corporate customers.
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1] Yuga Chaudhari & Megha Bandhuni-Rai, "Competition Beware,"www.channelbusiness.in.
2] Yuga Chaudhari & Megha Bandhuni-Rai, "Competition Beware,"www.channelbusiness.in.
3] Dan Nystedt, "Acer Leaves Benq Board to Avoid Conflict,"www.infoworld.com, April 17, 2006.
4] "Acer Acquires Gateway, Packard Bell,"www.eetindia.co.in, October 19, 2007.
5] "Acer to Open Full Fledged Indian Subsidiary,"www.rediff.com, April 9, 1999.
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