Acer Founder Stan Shih Provides Brand-Building Talent to Taiwan Entrepreneurs

Stan Shih, founder of Acer Inc., is lending his brand-building expertise to a wide range of entrepreneurs in Taiwan after turning day-to-day management of the world’s third-largest PC company over to his top executives.

“Branding has been my only job,” said Shih in his office at iDSoftCapital Inc., a company that provides advice and even venture capital to Taiwan businesses that have innovative products and are committed to building their own brands.

Successful brand owners such as Acer can make big profits. The company about five years ago spun off its manufacturing arm and now focuses on marketing and product design. During that time, Acer has grown from the world’s sixth-ranked PC company to the third.

Shih, who in 1971 started Taiwan’s first company selling calculators under a brand name, has been tireless in promoting his branding vision to Taiwan companies, many of which have been relatively obscure contract manufacturers for the world biggest brands but are now taking the same direction as Acer.

To promote the island’s industry, Shih is cooperating with the Taiwan government, which has made branding a key task to boost the competitiveness of the domestic economy. Part of iDSoftCapital’s funds come from Taiwan’s National Development Fund and the Taiwan External Trade Development Council (TAITRA).

There are two ultimate goals of the Branding Taiwan program. The first is integrating resources to assist the establishment of brands and create a favorable environment for development; the second is to aid Taiwan enterprises in brand development and increase the value of Taiwan’s international brands.

Shih has shared his brand-building experience with mobile phone maker HTC Corp. and network equipment company D-Link Corp. the latter of which like Acer split into two companies, one doing contract manufacturing, and the other, brand-name marketing.

“I gave my endorsement to their vision,” Shih says.

One of the biggest challenges facing Taiwan’s brand builders is the need to localize international management capabilities, according to Shih. Part of Acer’s current success comes from its effort to build local management teams in its key markets, Shih says.

“That takes years to build. Marketing overseas is a big challenge.”

Unlike many other Asian companies, Acer has become international from top to bottom, with President Gianfranco Lanci, an Italian, leading the way.

Shih advises many of the companies he works with to find ways to retain foreign talent.
iDSoftCapital provides two types of assistance to companies aiming to build brands: advice and investment. The venture capital fund sees the greatest potential in companies with annual revenue ranging from the equivalent of US$20 million to $500 million a year.

The fund has made good returns even amid the global economic slump, Shih says.
Shih counts a number of medium-sized companies such as Thermaltake Technology Co. among the successes. Thermaltake makes do-it-yourself computer cases that provide good thermal dissipation, which boosts overall performance of a computer and meets the needs of computer gamers, many of whom enjoy assembling customized computers.

“If you have a reasonable price-performance margin, you should consider reserving some budget to build brand equity,” says Shih. “Depending on price competition alone is not the right way.”

Taiwan’s bicycle industry, including companies such as Giant Manufacturing Co. and Merida Industry Co., shows potential and still has room to grow, according to Shih.
Taiwan’s first innovations in the bicycle business include the use of carbon fiber in bike frames and production of the world’s first foldable bikes. In 1985, while Shih was still building Acer, he invested in a foldable-bike company.

“Companies need to make sure their core competency is not just their manufacturing cost,” he says. “They also need innovation.”

After making calculators, Shih started the Multitech brand, a PC company that was the forerunner of Acer. Taiwan accounts for less than 1% of the global PC market, yet Acer is now among the world’s biggest PC companies.

Shih has never been a person to stand in anyone’s shadow. Now, he’s helping more companies in Taiwan to win brand recognition and offer their customers top quality at reasonable prices.
“Our practice reflects that ‘me too’ is not my style,” he says.

Taiwan External Trade Development Council (TAITRA), www.taiwantrade.org.tw