Acer in Europe: Strategy and Key Success Factor Analysis

The rise of Taiwanese vendor Acer over the past five years in Europe has been an almost unrivaled success story. With annual growth rates consistently exceeding those of the market, Acer has developed a business model firmly routed in the principles of simple and effective streamlined processes, spanning from PC manufacturing to delivery to the end user. "With shipments growing from 800,000 units in 1998 to over 2.8 million in 2003 thanks to an effective product, segment, and channel strategy, Acer represents a major challenge for the top players in EMEA," said Ian Gibbs, senior research analyst with IDC's European Personal Computing team. This report aims to outline the key factors contributing to Acer's success and which propelled the Taiwanese vendor to the number 1 position in the European notebook market in the second quarter 2004, and to third position in the PC market overall in 3Q04. An extended special report providing a further in-depth analysis of Acer's go-to-market strategy and strengths, weaknesses, opportunities, and threats is also available through the European Personal Computing team.

Key challenges for Acer in 2005 include:

The ability to continue its expansion without overstretching its lean cost-driven structure and subsequently profit margins. Its core abilities in logistics management and channel delivery must be maintained with growing volumes. The building of a credible brand image and increasing marketing spend while maintaining competitiveness. Attempts must be made to enhance consumer positioning in the face of the new digital entertainment wave. Business market — fierce competition in the SMB space with more difficult expansion expected in the medium-sized market unless enterprise or business solutions offerings are made available. Worldwide expansion — the recent appointment of Gianfranco Lanci as new president of the company worldwide clearly demonstrates the willingness of the vendor to strengthen its position outside EMEA. If this is a major challenge for Acer, it certainly represents a major challenge for its competitors too as the vendor could well manage to export its success to the other regions.