Analysis: Acer, the invisible giant, wants to be seen

The world's second largest computer manufacturer, Acer, may be just another victim of the economic fire terrorising corporate bank accounts worldwide, but its latest strategy will, at worst, illustrate the firm's tenacity in difficult times. A new channel and marketing strategy, announced Thursday in Dublin, is designed to cut costs and speed up lead times and represents the latest brainwave of Stan Shih -- Acer's high profile chairman, and Taiwan's sole computer personality.

The world's second largest computer manufacturer, Acer, may be just another victim of the economic fire terrorising corporate bank accounts worldwide, but its latest strategy will, at worst, illustrate the firm's tenacity in difficult times. A new channel and marketing strategy, announced Thursday in Dublin, is designed to cut costs and speed up lead times and represents the latest brainwave of Stan Shih -- Acer's high profile chairman, and Taiwan's sole computer personality.

Shih's plan is fairly straightforward: build relations with its resellers and work harder at promoting sales on the Web. OK the plan won't go down in history as the most original ploy to get the ailing manufacturer in shape but it does conjure up visions of an aspiring world leader taking its first steps towards a better future.

Joining the ranks of the top five PC makers by 2001 is the goal. That would represent a giant leap from its current no 7 slot and, according to IDC, may reinforce the belief that miracles really can happen.

An 'aggressive' marketing strategy has been promised, backed up with a strong reseller programme designed to get machines to customers more quickly. A PC should now arrive within 5 days of an order -- down from 10 days -- and resellers are charged with keeping the punters happy with value add-ons and 'first class service'. The resellers take orders from an extranet that links Acer's partners all over Europe. In theory, if one reseller doesn't have the parts to build a specific PC, it can use the extranet to call for assistance from its networked colleagues.

Acer's European channel has been put on a strict diet in accordance with Shih's ambitions. "All lines of business will be merged," says UK managing director, 'Action' Graham Jackson, "with a view to keeping costs down. All sales, marketing and brand management will be centralised in Slough".

Aggressive marketing and a leaner channel may be the magic formula Jackson's boss is betting on. "I think stealing one of the top five places is very ambitious," says Ian Darbyshire, Program manager for industry analyst IDC, "but Acer is one of the few manufacturers that can keep costs right down because it makes so many computers for its OEM customers. The top positions for the major players are very volatile at the best of times but if Acer can maintain a streamlined approach, maybe this new strategy will be a success."

Derbyshire's views look good for the Taiwanese company which has been supplying manufacturers like IBM with desktops for years, but by its own admission Acer has a lot of work to do in the US. "America is our Achilles heel" concedes Jackson "but we can offset that weakness with our strengths in Asia and Europe. Besides we plan to make our Internet presence work harder and believe we can secure fifty per cent of our sales on the web by 2001."

That could be more tricky according to Darbyshire who points to the US as one of the few places where online sales can make a difference to a company's fortunes. "Fifty per cent in three years is definitely optimistic," says Derbyshire, "Acer doesn't have the strongest brand recognition in the world and the US is already looking to the Dells and Compaqs for Web deals. That's not to say Acer can't do it. I just can't see it being an easy task."

The task won't be easy -- Acer is the invisible giant of the PC world. But Shih knows how to charm his partners and keep the media interested in his vision. The bottom line is Acer is on the move but it is up against the best in the world. To make matters worse all the top vendors are twitchy and are not likely to allow a relative unknown steal any market share without a fight. That said, many editorials put Apple in a pine box this time last year and yet now the company seems to be going from strength to strength.

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