Acer Transforming Business Models

Acer: Transforming Business Models With Outsourcing

Outsourcing was mainly used by companies as a way to cut significant chunks in their cost while unloading the bulk of their tasks to other parties. That was simply the equation.

But Outsourcing can bring so much more. Used innovatively, Outsourcing can not only save a company millions in costs, it can also bring massive advantages and business solutions such as turning a weakness into an advantage. Such is the case for now world-leading PC maker Acer.

From the 90’s to 2000’s, the PC Market was dominated by two industry giant, Dell and rival Hewlett-Packard. Taiwanese computer manufacturer Acer tried to crack the U.S. market but failed to make its mark.

Acer’s business model was a hot mess. One department manufactures for other brands and the other manufacturing department creates similar machines to be sold under Acer’s brand name. An unhealthy internal competition is happening so Acer decided to focus their efforts elsewhere. The Taiwanese brand’s executives knew that the company’s strength lies with branding and marketing and opted to focus on creating laptops for consumers. Opting to go with capability sourcing, passing manufacturing duties to third party organizations  to enhance its manufacturing capabilities in 2000.

Thanks to outsourcing leveling the playing field, Acer manage to match up with the industry leaders.  The then small, little-known brand finally cracked the top five in PC market shares in 2003. The move did not only upgrade Acer’s manufacturing, it also allowed the company to employ a significantly smaller workforce compared to its competitors. A factor previously considered as a weakness is now one of the strengths the company is banking on. This massive advantage led to faster growth in sales and allowed Acer to close in the top spot of market share rankings, getting up as high as 2nd largest share in terms of market share during 2009-2010.

Acer used Outsourcing methods to level the playing field against the industry top players. It paid off, as the once little known PC brand is now considered one of the major names in the industry.

Outsourcing is such a powerful business tool, one capable of completely revamping existing business models. If smartly incorporated to a business, Outsourcing can catapult even the smallest and unknown brands to the upper echelons of an industry.

Obviously, Outsourcing is not an immediate fix. Important factors such as fit to the business and quality of BPO service providers should be considered.

Seriously considering how to incorporate outsourcing to your business? Get in touch with Anderson Group BPO Inc. (AGBI). Contact us at inquiries@andersongroup.ph or check our services pages and let’s talk about how to improve your business through outsourcing.

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