Dragon Dream

Stan Shih's 'Dragon Dream': Building Taiwan's first global brand.

For most Taiwanese notebook manufacturers, anonymity is simply part of the business model — the brand that matters is the one that goes on the box after it leaves the factory. But Stan Shih, the 53-year-old founder and CEO of Acer, believes it's time for Taiwan's computer makers to step out of the shadows. While the $5.8 billion company still garners 75% of its sales revenue from building PCs for United States, European, and Japanese computer companies, Shih is pushing to make Acer a global brand itself. In fact, Shih misses no opportunity to get his point across: he named his recently self-published book "Me-Too Is Not My Style."

"Taiwan faces a major transition and we have to upgrade our industry," says Shih from his Taipei office. "With low-cost labor available in Southeast Asia and China, Taiwan has to make progress in order to survive."

Shih, who founded Acer as Multitech International Corp. in 1976, built the company into a major technological force by decentralizing operations and offering equity stakes to local owners in foreign countries. He calls this strategy "global brand, local touch" and says it has already paid off for the company. In 1995, Acer America, for example, had $1.5 billion in sales and ranked a respectable eighth among PC makers.

Shih's larger vision is to build a massive global manufacturing capability that will allow Acer to supply components that can be assembled and sold locally. Acer already has 39 assembly sites in 35 countries and ranks as the leading PC maker in Indonesia, Malaysia, Mexico, and South Africa. Acer also has a series of joint ventures with such major players as Texas Instruments to supply memory chips and other key components.

According to Shih, however, the vision goes further: he plans to spin off more than 20 of his business units into publicly traded companies by the year 2000, pushing the envelope of "global brand, local touch." His ultimate plan is to grow Acer into a $15 billion giant by driving into a newly developing market for intelligent consumer products — a combination of computers, $500 video-game machines, and low-priced home entertainment centers.

Shih's ambitious plans extend to creating the infrastructure needed to build the company's human capital as well. To capture the allegiance of a more highly educated generation of Taiwanese workers, Shih has begun construction of Acer's own town: "Aspire Park," a 400-acre development with 2,000 homes, dormitories, a creative center, and an R&D center located one hour south of Taipei.

Shih is not without his critics, including FIC's Horace Tsiang. Shih, says Tsiang, is overestimating the promise of Taiwan's technology community. "I have the same engineers as he has," Tsiang says. "What can they develop? They can't develop software. And if you develop all new products, you need to create a marketplace. You just can't do that in Taiwan. We represent only half of 1% of the world market." Taiwan, argues Tsiang, is simply too far from the center of global commerce to create a market for its own brands.

But Shih nurtures his 'dragon dream' — the idea that the Chinese will make a global contribution. "Taiwan is ready to make good progress," he says confidently. "People say all the innovation is in the United States. But we are getting better. Compared with Japan, for example, we are already ahead when it comes to technology."

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