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Porter Model

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Submitted By anuradha
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Executive Summary

This paper reviews the competitive landscape of the PC and peripheralsindustry through analysis of thecompany strategy, business model, distribution channels, competencies and value chain to provide a series of recommendations for Acer’s Board of Directors.
Acer is the third largest PC manufacturer in the globe using atransnational strategy to procure components to maintain cost leadership. By using strategic group maps, Porter’s five forces, SWOT analysis, value chain review and the Dranove model a comprehensive analysis of the Acer external and internal forces are reviewed.
On the basis of the analysis a series of recommendations have been made to ensure that Acer remains competitive, retains the number 3 ranking and are sustainable into the future.
It is recommended that Acer find blue ocean against competitors through the use of the premium branding of product, whether this be Ferrari or another premium luxury brand and determine if some of this can be derived from sustainable and green materials. Once these are determined it is recommended to use a balance scorecard with alliances to help drive innovation together with a tried and tested sales system to increase Acer market share.
Background and Context

Acer is the third largest PC Company in the world (9.5% market share) with growth being experienced outside the mature USA market, predominately in emerging nations.
Although Acer experienced growth in 2007, increasing its sales by 32.9%, the PC and peripherals industry is very competitive and Acer, while being the third player, is well below HP and Dell in terms of market dominance.
Since 1999 Acer’s revenues have grown significantly, however profit has ranged between NT$8-10b. This is partly due to the fierce competition in the industry which has reduced profits for all competitors. One contributor to profits declining as a

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