Acer Group's R&D Strategy: The China Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Acer Group's R&D Strategy: The China Decision
The Acer Group was one of the world's largest PC and computer component manufacturers. Members of Acer's R&D management team were considering the location of a new R&D lab with a view to maximizing the effectiveness of their global R&D strategy.
Authors :: Terence Tsai, Borshiuan Cheng, Donna Everatt
Swot Analysis of "Acer Group's R&D Strategy: The China Decision" written by Terence Tsai, Borshiuan Cheng, Donna Everatt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Acer Acer's facing as an external strategic factors. Some of the topics covered in Acer Group's R&D Strategy: The China Decision case study are - Strategic Management Strategies, Cross-cultural management, Globalization, Intellectual property, Operations management, Research & development and Technology & Operations.
Some of the macro environment factors that can be used to understand the Acer Group's R&D Strategy: The China Decision casestudy better are - – increasing transportation and logistics costs, there is backlash against globalization, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Acer Group's R&D Strategy: The China Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Acer Group's R&D Strategy: The China Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Acer Acer's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Acer Acer's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Acer Group's R&D Strategy: The China Decision can be done for the following purposes –
1. Strategic planning using facts provided in Acer Group's R&D Strategy: The China Decision case study
2. Improving business portfolio management of Acer Acer's
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Acer Acer's
Strengths Acer Group's R&D Strategy: The China Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Acer Acer's in Acer Group's R&D Strategy: The China Decision Harvard Business Review case study are -
Organizational Resilience of Acer Acer's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Acer Acer's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Acer Acer's in the sector have low bargaining power. Acer Group's R&D Strategy: The China Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Acer Acer's to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Acer Acer's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Acer Acer's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Acer Acer's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Acer Group's R&D Strategy: The China Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Acer Acer's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Acer Acer's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Technology & Operations industry
– Acer Group's R&D Strategy: The China Decision firm has clearly differentiated products in the market place. This has enabled Acer Acer's to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Acer Acer's to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Acer Acer's is present in almost all the verticals within the industry. This has provided firm in Acer Group's R&D Strategy: The China Decision case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Acer Acer's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Acer Acer's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Acer Acer's is one of the leading recruiters in the industry. Managers in the Acer Group's R&D Strategy: The China Decision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Acer Acer's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Acer Acer's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Acer Group's R&D Strategy: The China Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Acer Acer's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Acer Acer's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Acer Group's R&D Strategy: The China Decision Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Acer Group's R&D Strategy: The China Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Acer Group's R&D Strategy: The China Decision are -
High operating costs
– Compare to the competitors, firm in the HBR case study Acer Group's R&D Strategy: The China Decision has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Acer Acer's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Acer Group's R&D Strategy: The China Decision that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Acer Group's R&D Strategy: The China Decision can leverage the sales team experience to cultivate customer relationships as Acer Acer's is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Acer Acer's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Acer Acer's supply chain. Even after few cautionary changes mentioned in the HBR case study - Acer Group's R&D Strategy: The China Decision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Acer Acer's vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Acer Group's R&D Strategy: The China Decision HBR case study mentions - Acer Acer's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Acer Acer's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Terence Tsai, Borshiuan Cheng, Donna Everatt suggests that, Acer Acer's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Acer Acer's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the segment, Acer Acer's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Acer Group's R&D Strategy: The China Decision, it seems that the employees of Acer Acer's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Acer Acer's is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Acer Acer's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Acer Acer's to focus more on services rather than just following the product oriented approach.
Opportunities Acer Group's R&D Strategy: The China Decision | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Acer Group's R&D Strategy: The China Decision are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Acer Acer's is facing challenges because of the dominance of functional experts in the organization. Acer Group's R&D Strategy: The China Decision case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Acer Acer's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Manufacturing automation
– Acer Acer's can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Acer Acer's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Acer Acer's in the consumer business. Now Acer Acer's can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Acer Acer's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Acer Acer's to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Acer Acer's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Acer Group's R&D Strategy: The China Decision suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Acer Acer's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Acer Acer's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Acer Acer's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Acer Acer's can use these opportunities to build new business models that can help the communities that Acer Acer's operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Acer Acer's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Acer Acer's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Acer Group's R&D Strategy: The China Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Acer Group's R&D Strategy: The China Decision are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Acer Acer's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Acer Acer's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Acer Acer's.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Acer Acer's has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Acer Acer's needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Acer Group's R&D Strategy: The China Decision, Acer Acer's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Stagnating economy with rate increase
– Acer Acer's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Acer Acer's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Acer Acer's needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Acer Acer's in the Technology & Operations sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Acer Acer's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Acer Acer's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Acer Acer's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Acer Group's R&D Strategy: The China Decision .
Weighted SWOT Analysis of Acer Group's R&D Strategy: The China Decision Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Acer Group's R&D Strategy: The China Decision needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Acer Group's R&D Strategy: The China Decision is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Acer Group's R&D Strategy: The China Decision is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Acer Group's R&D Strategy: The China Decision is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Acer Acer's needs to make to build a sustainable competitive advantage.