Fulfillment of the Requirements for the Degree of Master of Science in Engineering and Management at the Massachusetts Institute of Technology

This thesis addresses the corporate strategies IT firms in international market. In particular, it investigates Acer Corporation leading IT company headquartered in Taiwan. Acer's business model was distinctly different from traditional conglomerate corporate structures in Taiwan. Founded in 1981, Acer developed in to a leading semiconductor company in the world by using a combination of manufacturing and operations processes, product offerings, marketing strategies and innovative management techniques. The existing market conditions in the region and the industry dynamics of its business greatly helped Acer to gain a large market share. Acer started experiencing loss in market share and lower revenue beginning in 1991. This thesis provides an analysis of factors that have led to Acer's immense success until a couple a years ago and the challenges it currently faces. The analysis shows that Acer's success has been a result of the combination of its strategy and quite importantly, the market and industry conditions under which it operated. This thesis provides an analysis of how Acer got where it is today, then analyzes the potential for success for latest Acer's strategic initiatives and also presents a strategic framework as a recommendation for Acer. It presents a detailed analysis of the latest Acer's strategic initiatives, culminating in a judgement of whether they will succeed or not. A careful evaluation of its strategic options shows that its idea of services business, turning Acer in an IP based company and the Aspire Park project are at best long shots, at least within the framework developed in this thesis. Its move towards partnership and joint alliances with the industry leaders in North America seems to be quite promising, though. Finally, this thesis also presents a strategic framework consisting of product, marketing, joint alliances and restructuring options to take advantages of the opportunities as a result of the changing market and technologies. These options have been presented after a careful consideration of Acer's core expertise and existing industry dynamics.