Page 87 - DMGT545_INTERNATIONAL_BUSINESS

International Business

notes self assessment

Fill in the blanks:
9. .................... and .................... standards require the government to produce full information
on the responsibility of main administrative unit for use of authorized funds.
10. The Ministry of Finance may have an important role to play in influencing the finance of
industry with the .................... .



Caselet acer’s us foray runs into trouble

cer, the Taiwanese computer maker illustrates the challenges faced by companies
based in emerging markets while entering developed markets. After developing a
Astrong presence in south east Asia and Latin America, Acer decided to target the
US market with its popular Aspire Home PC. Acer soon found itself being outmaneuvered
by stronger rivals such as Dell with superior marketing capabilities. As the Aspire line
began to pile up losses, Acer announced that it would concentrate on its Power PCs,
backed by a $10 million marketing campaign to target small and medium businesses. Acer
also indicated that it might launch low cost computer appliances called XCs priced $200 or
lower once they were established in Asia. But Acer’s market share slipped from 5.4% (late
1995) to 3.2% (late 1998) and it began to make losses in the US market.
Part of the problems arose because customers for Acer’s contract manufacturing arm
worried about spill over of business secrets to and cross subsidization of Acer’s offerings
under its own brand name. In 2000, IBM cancelled a major order, reducing its share of
contract manufacturing in Acer’s revenues from 53% in the first quarter of 2000 to only 26%
in the second quarter of 2001.
Founder Stan Shih had once told his executives that a strong presence in America was
vital to the development of a global brand: “It’s almost a mission impossible but all of our
people are ready to fight for that mission.” These hopes however were belied and after
losing $45 million in the US, in 1999, Acer began to retreat from the US consumer market.
Acer decided to target developed countries with contract manufacturing and offer its own
brands in the Asian region. The contract manufacturing activities were spun off into a
separate arm called Wistron. Recently, Acer has made a bold move by announcing it will
buy leading PC maker, Gateway for $710 million. This will not only significantly, strengthen
Acer’s presence in the US, taking its market share from about 5.2% to 10.8% but also make
it the world’s third largest PC maker ahead of China’s Lenovo. After the acquisition is
completed, Acer will generate sales of more than $15 billion and ship over 20 million PCs
every year. But Acer will continue to trail well behind the market leaders in the US, Dell
(28.4%) and Hewlett Packard (23.6%).

Source: www.vedpuriswar.org/.../GoingGlobal/Chapter%2006_...
5.3 need for Government intervention in Business

Government regulation at the central and state levels has a major impact on how businesses
operate in the India. In order to manage business activities in a complex society and to help
respond to changing societal needs, governments at all levels have created numerous regulatory
agencies. Although the duties and functions of each agency vary, all influence the day-to-day
business activities that take place within the India. Businesses that take a proactive stance toward

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