Brands & Branding and Private Labels Case Study

Acer vs Lenovo: Asian Brands’ Global Ambitions

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Abstract:
On the global personal computer map, Acer emerged from obscurity to become the third largest PC company only behind Dell and HP. But the company wasn’t a smash hit over night. Staying true to its South Asian culture, the company worked up the ladder, rather silently, building brick-by-brick. On its way up, the company worked out many hurdles – ranging from branding problems to facing near boycott from the then stalwarts in the business – and gradually overtook much bigger and older companies. The long standing chairman Stan Shih put up a workman-like effort solving one problem after the other and steering the company in one of the most competitive industries. All the way through, he stuck to the basics of the business, focusing on quality, quantity and low costs. Acer’s Asian counterpart, Lenovo, made its mark in the global PC market with a bang by taking over IBM’s PC business. From then on, the rivalry between the two Asian giants caught the attention of industry as well as academia. The industry is tracking them for remaking the global PC industry dynamics by challenging the western companies, that have practically invented and built the industry over decades. The academia is observing the theoretical and strategical underpinnings and are scripting the journey of these two global giants from the developing world. This case helps the students debate on the importance of brand building in the global PC industry in the back drop of competitive dynamics that are shaping the industry. This will also help in analysing the strategies adopted by Acer and Lenovo to compete in the industry and in concluding which of the two is well-placed.

Pedagogical Objectives:

The case is structured to help the students:
• Understand the competitive dynamics shaping the global PC industry
• Appreciate the significance of brand building in a highly commoditized industry
• Analyse which of the two Asian brands is better off amidst fierce competition in the global PC market.

Keywords : Lenovo-IBM Alliance, Cross-border consolidation, Price wars, Acer, Chinese PC Industry, Critical Success Factors in PC industry, Branding, Brand Integration, Branding challenges, consumer goods, Presonal Computers

Contents:

• Acer: From Obscure to Obvious
• Lenovo: The Chinese National Champion
• The Rivalry