1 . The students should observe validity in each of the 'don't go'/go/'wait' arguments separately. Probably the 'go' decision is the least complicated to rationalize upon examination of the case specifics. Hence while an exercise, it is necessary to thoroughly examine other alternatives.
[Acer got moved into China the very next 12 months the case study was prepared in 1998, we. e., it happened in 1999 under the stewardship of Gianfranco Lanci while the representative of the company and M. T. Wang, the leader and chief executive]
The " GO" Strategy
* The most crucial reason for moving into China will be the huge profitable market as well as the immense chance the market of China presents Acer with.
* China and tiawan being a huge market holding out to be used would as well necessitate the reduction of lead times during the ordering parts from Taiwan and owing to the constraints of immediate transportation features between Cina and Taiwan, Acer would need to setup a manufacturing facility as well as a shift the assembly lines in to China to get serving the fragmented market segments of Chinese suppliers
* The economy of China is on a roll and therefore the growth potential of the country is huge making it incredibly lucrative for virtually any company for example to invest in the nation and more so for Acer since Chinese suppliers uses the very best number of Personal computers, second only to USA. The large size of its economy can boost the company by unexpected standards.
5. China will allow the company of Acer to maneuver upward in the present situation of the third largest PERSONAL COMPUTER manufacturer. This can actually lead to Acer elevating its earnings manifold and then exploit the other booming markets too like the entire of Latin America.
2. The HR issue with the Taiwanese managers working in China and tiawan can be fixed out Acer hires in other places other than Taiwan and delivers them to Chinese suppliers with a large paycheck because the rewards of operating in Chinese suppliers are also enormous.
* China's huge size can actually allow the company to use the economies of level and the inexpensive labor may boost the margins of the company, the profits which can be re-invested into some other international operations.
* To bypass each of the problems of investment, all of us suggest that Acer only turns into a supplier in mainland and after that after turning out to be aware of the tricks of trade in China, projects into the country as a maker.
The " DON'T GO" Approach
5. The political scenario isn't exactly encouraging for Acer, a Taiwan based company to move into Landmass China. A history of the countries and the consequent and carrying on antagonism between two countries can make acute challenges for the corporation as appropriately demonstrated by the case of Formosa Plastics. Political demands, forced red tapism and unfair rules on the part of the Chinese or Taiwanese govt may significantly hamper earnings of this kind of investment in China
2. Investment and commercial connections are limited between the two countries thus Acer may find itself by a disadvantage in raising a plant in existence in the landmass. Though you will find encouraging signs of the fact that China and Taiwan being a part of WTO and then afflicted by the same WTO regulations, points will be enough murkier and wonder be it worth the chance of investing these kinds of huge capital in the landmass
* Enormous cultural differences between the two countries will create tremendous problems to get the management. The european influence of the Acer could come into immediate conflict with all the communist effect prevalent for the mainland China and tiawan. The attitude towards the personnel is exactly poles apart pertaining to Taiwanese and Chinese firms and so are the counter reactions on the part of the employees. Where Acer considers their employees as a part of their extended family, they may face problems doing the same to the Chinese people. In addition to this is the HUMAN RESOURCES issue of convincing the Taiwanese managers of joining the company in China with this present atmosphere of mistrust and discord between the two countries. The deeply...