Acer Group's R&D Strategy: The China Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
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 - – wage bills are increasing, increasing commodity prices, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, 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 -
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.
Innovation driven organization
– Acer Acer's is one of the most innovative firm in sector. Manager in Acer Group's R&D Strategy: The China Decision Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Analytics focus
– Acer Acer's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Terence Tsai, Borshiuan Cheng, Donna Everatt can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
High switching costs
– The high switching costs that Acer Acer's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Acer Group's R&D Strategy: The China Decision Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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 -
Lack of clear differentiation of Acer Acer's products
– To increase the profitability and margins on the products, Acer Acer's needs to provide more differentiated products than what it is currently offering in the marketplace.
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 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.
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.
Need for greater diversity
– Acer Acer's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Acer Group's R&D Strategy: The China Decision, is just above the industry average. Acer Acer's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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 -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Acer Acer's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Acer Acer's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Acer Acer's has opened avenues for new revenue streams for the organization in the industry. This can help Acer Acer's to build a more holistic ecosystem as suggested in the Acer Group's R&D Strategy: The China Decision case study. Acer Acer's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Acer Acer's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Acer Acer's to increase its market reach. Acer Acer's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Using analytics as competitive advantage
– Acer Acer's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Acer Group's R&D Strategy: The China Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Acer Acer's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Acer Acer's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Acer Acer's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 -
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Acer Acer's is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Acer Acer's.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Acer Acer's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Acer Acer's in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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 .
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.
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.
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.
