Acer : The Rampaging Dragon

With a sense of real excitement, Stan Shih, CEO of

Acer, Inc., boarded a plane for San Francisco in

early February 1995. The founder of the Taiwanese

personal computer (PC) company was on his way to

see the Aspire, a new home PC being developed by

Acer America Corporation (AAC) Acer’s North

American subsidiary. Although Shih had heard that

a young American team was working on a truly innovative

product, featuring a unique design, voice

recognition, ease-of-use, and cutting-edge multimedia

capabilities, he knew little of the project until

Ronald Chwang, President of AAC, had invited

him to the upcoming product presentation. From

Chwang’s description, Shih thought that Aspire

could have the potential to become a blockbuster

product worldwide. But he was equally excited that

this was the first Acer product conceived, designed,

and championed by a sales-and-marketing-oriented

regional business unit (RBU) rather than one of

Acer’s production-and-engineering-focused strategic

business units (SBUs) in Taiwan.

Somewhere in mid-flight, however, Shih’s characteristic

enthusiasm was tempered by his equally

well-known pragmatism. Recently, AAC had been

one of the company’s more problematic overseas

units, and had been losing money for five years.Was

this the group on whom he should pin his hopes for

Acer’s next important growth initiative? Could such

a radical new product succeed in the highly competitive

American PC market?And if so, did this unitвЂ"

one of the company’s sales-and-marketing-oriented

RBUsвЂ"have the resources and capabilities to lead

the development of this important new product, and,

perhaps, even its global rollout?

Birth of the Company

Originally known as Multitech, the company was

founded in Taiwan in 1976 by Shih, his wife, and

three friends. From the beginning, Shih served as

CEO and Chairman, his wife as company accountant.

With $25,000 of capital and 11 employees,

Multitech’s grand mission was “to promote the

application of the emerging microprocessor technology.”

It grew by grasping every opportunity

availableвЂ"providing engineering and product design

advice to local companies, importing electronic

components, offering technological training

courses, and publishing trade journals. “We will

sell anything except our wives,” joked Shih. Little

did the founders realize that they were laying the

foundations for one of Taiwan’s great entrepreneurial

success stories. (See Exhibit 1.)

Laying the Foundations Because Multitech was

capital constrained, the new CEO instituted

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