HTC SMARTPHONE COMPANY

Outline
Brief History of HTC Where we are now Vision and Mission External Analysis CPM EFE Summary Internal Analysis IFE
Strategic Analysis SWOT Matrix SPACE Matrix Grand Strategy Matrix IE matrix BCG Summary Possible strategies QSPM Recommendations Strategic implementation and desired results

History

Founded in 1997, HTC built its reputation as the behind-the-scenes

designer and manufacturer of many of the most popular OEM-branded mobile devices on the market.

Since 2006, they have regularly introduced many critically acclaimed mobile devices under our own brand, and our portfolio includes Smartphones and tablets powered by the Android or Windows Phone operating systems.

Apple in 2005
Recently HTC has introduced the EVO 3D And HTC 7

Mini Mac
Now your photos can have as much depth as the moment itself HTC EVO 3D captures your photos and videos in 3D, plus you can view them without the glasses. The stunning 4.3-inch display gives you crisp websites, vivid images and incredibly fluid videos.

iPod Shuffle
HTC 7 Surround has been designed to ensure it sounds as stunning as it looks. Services . Slide out the speaker and surround yourself in sound. Share your favorite music and videos with your friends in virtual surround sound.

Mission of HTC
According to HTC (2010), its mission is: To become the leading innovative supplier of mobile information and communication devices by providing valueadded design, world-class manufacturing and logistics and service capabilities. Components present in mission statement Self-concept Philosophy

Industrial Analysis
We did industrial analysis of the company using porters five forces. Competitors market share Android 25% Symbian 37% Apple 17% RIM 15% windows Mobile 3%

Porters five forces Analysis on HTC

Bargaining Power of Customer HTC customer have a strong influence on HTC smart phones. through phone discounts and multiple service offerings magnifies the bargaining power of these service providers and retailer's. Bargaining Power of Suppliers Phones are normally assembled using components from various suppliers. The intellectual property for these components is owned by the OEM`s (in this case, HTC). This structure allows HTC to quickly switch between different suppliers to meet demand

Threat of new Entrants The Smartphone market being highly competitive has a significant threat of new entrants. Threat of Substitute Products Mobile phones etc. are based on similar architecture and are converging into the same segment. So there is a risk that the demand of Smartphone can be absorbed by a substitute such as a web-enabled tablet. Competitive Rivalry within Industry Existing competitors are the biggest challenge in the market. This is the biggest force in play. Brand development and innovation key to sustainability.

The Strategy-Formulation (Matrix Analysis)

INDUSTRY ANALYSIS: THE EXTERNAL FACTOR EVALUTION (EFE) MATRIX: An EFE Matrix allows strategies to summarize and evaluate economic, social, cultural, demographic, environmental, political, government, legal, technological, and competitive information THE COMPETITIVE PROFIL MATRIX (CPM): The CPM identifies a firms major competitors and its particular strengths and weakness in relation to a sample firms strategic position. THE INTERNAL FACTOR EVALUTION (IFE) MATRIX: IFE Matrix provides strategy formulation tool summarizes and evaluates the major strengths and weakness in the functional areas of a business, and it also provides a basis for identifying and evaluating relationships among those areas.

EFE MATRIX FOR HTC

KEY EXTERNAL FACTORS OPPORTUNITIES:
1. HTC collaborated with Google and launched their cell phones with Google Android OS install in it. 2. Strategic partnership with Beat Electronics by acquiring 51% shares. 3. Patent agreements. 4. Industrial growth rate is high for HTC. 5. Increasing demand for Touch screen phones with 3G technology. 6. Manufacturing units in Brazil. 7. As BlackBerry is an executive phone, HTC should also try to reach the executive level. 0.12 0.11 0.05 0.10 0.07 0.02 0.08 3 3 2 3 4 2 1 0.36 0.33 0.10 0.30 0.28 0.04 0.08 WEIGHT RATING WEIGHTED SCORE

THREATS:
1. Rapid technological change. 2. Intense competition. 3. Stringent regulation. 4. Difficult to make HTC phones customer first preference when Apple, Nokia and BlackBerry phones are in the market (customer loyalty). 5.Numbers of products are less as compared to the competitors TOTAL 0.13 0.08 0.02 0.11 3 3 1 3 0.39 0.24 0.02 0.03

0.11

0.33

1.00

2.8

ANALYSIS OF EFE MATRIX

The total weighted score of 2.8 Above the average of 2.5, so the telecommunication business (HTC) is doing pretty well, taking advantage of the external opportunities and avoiding the threats facing the corporation but still there is a great room for improvement as HTC is competing with the great players of mobile market they need to continue producing new mobile models to cope up with the competition.

CPM MATRIX FOR HTC

APPLE CRITICAL SUCCESS FACTORS Market share Price Financial position Product quality Consumer loyalty Advertising Management Global expansion Innovation TOTAL WEIGHT 0.1 0.1 0.15 0.15 0.15 0.05 0.07 0.08 0.15 1.00 RATING 3 2 3 3 4 2 4 3 4 WEIGHTED SCORE 0.3 0.2 0.45 0.45 0.6 0.1 0.28 0.24 0.6 3.22 HTC RATING 2 2 3 3 2 1 4 3 4 WEIGHTED SCORE 0.2 0.2 0.45 0.45 0.30 0.05 0.28 0.24 0.6 2.77 NOKIA RATING 3 3 2 2 3 3 2 3 3 WEIGHTED SCORE 0.3 0.3 0.3 0.3 0.45 0.15 0.14 0.24 0.45 2.63

ANALYSIS OF CPM MATRIX

Apple is on the top position as compared to HTC and Nokia. Apple is using an effective technique that has been able to create a brand image, which helps in achieving high market share as compared to other brands. Apple is much popular and highly in demand brand which is the major threat to HTC. It is a big hindrance in the demand of HTC cell phones. Apart from that, the financial crush could also be the threat for the company. Thats because HTC smart phones are expensive and are not affordable for many of the smart phones users

IFE MATRIX FOR HTC

KEY EXTERNAL FACTORS WEIGH RATING WEIGHTE T D SCORE 0.04 0.14 0.13 0.06 4 4 4 3 0.16 0.56 0.52 0.18

STRENGHTS:
1. It is the leading maker of PDAs smart phones in the world. 2. There is the strong setup of R&D in HTC. 3. HTC caters the customer national and internationally and the numbers of customers. 4. HTC smart phones equipped with windows vista, Android OS, HD video recording, multiple touch system. 5. Industry recognition and awards. 6. Financial performance. 7. Expending market share in sectors.

0.11 0.03 0.10 0.10

4 3 3 2

0.44 0.09 0.3 0.2

WEAKNESS:
1. HTC is not very much recognized brand in the market as compare to the Apple, Nokia and Blackberry. 2. High manufacturing cost of HTC. 3. Declining liquidity ratio. 4. Patent infringement litigation. 5. Small range of cell phones model as compared

0.07 0.04 0.01 0.08

1 2 2 1

0.07 0.08 0.02 0.08

ANALYSIS OF IFE MATRIX

The IFE of HTC shows weight age average of 2.79 is above average which means corporation is able to use is toped resources and focus on strength like updated machinery, new technology used that is increased cost can be control through revenue earned by HTC. However, it has small range of cell phones compared to NOKIA and has very high manufacturing cost as well but still there is a great room for improvement as HTC is competing with the great players of mobile market they need to continue producing new mobile models to cope up with the competition

TOWS MATRIX OF HTC

SO STRATEGIES

1. Produced innovative products with high technology (S2, O1).

TOWS MATRIX OF HTC

WO - STRATEGIES 1. Purchase all legal rights (W4, O3). 2. Lower their cost by taking advantage of lower labor cost and production unit (W2, O7). 4. Take advantage of sponsorship to make space in hearts of customers (W1, W6, and O6).

2. Served national and globally with 3G technology (S3, O5, O4).

3. Increasing market share by providing innovative 3. Overcome short term debt by strategic alliances (W3, products to customers as compared to rivals (S7, O7). O2). 4.Bring out new products in collaboration with experience partnership(S8,O2) 5.Acheived many rewards and recognition by Beating electronic rivals(S5,O2)

ST- STRATEGIES 1. Introduced new products to gain customer trust (S4, T4, and T5). 2. Compete with rival by focus on performance, Technological advancement and brand recognitions and awards (S5, S6, S7, T2, T1). 3. Compete with rivals by providing services to customers nationally and internationally (S3, T2). 4. Enlarge sales volume and market share with more promotional activities as compared to rivals (S7, T5).

WT - STRATEGIES 1. Put attractive features to the product (W6, T5).

2. Keep cost low to attract customers (W5, T4).

3. Compete with rivals with new techniques (T2, W6, and W1). 4. Supported by technology launches and threaten by popular and highly in demand brand because of high cost (W2, T1, and T5). 5. Less brand awareness leads to lower marketing/sales (W1, T5).

SPACE MATRIX OF HTC

FINANCIAL STRENGTH
1. Purchase all legal rights. 2. Overcome short term debt by strategic alliances. 3. It is the leading maker of PDAs smart phones in the world and there is strong setup of R&D in HTC.

RATINGS 3 3 5 11

INDUSTRY STRENGTH 4 1. Compete with rivals by providing services to customers nationally and internationally. 4 2. Defect in BlackBerry sales decline product brings out HTC product. 6 3. Producing 3G technology in response to rapid technological change. 14 ENVRIONMENTAL STABILITY -2 1.Compete with rivals with new techniques 2. Supported by technology launches and threaten by popular and highly in demand because of high cost. 3. Less brand awareness leads to lower marketing sales. 4.Compete with rivals by focus on performance, technology etc. COMPETITIVE ADVANTAGE 1. HTC has long experience with network suppliers. 2. Introduced new products to gain customer trust. 3. Enlarge sales volume by market share with more promotional activities as compared to rivals. 4. Put attractive features to the products. 5. Keep cost low to attract customers. -3 -2 -5 -2 -4 -5 -6 -3 -16

CONCLUSION
ES= -16/4= -4 IS = 14/3 = 4.67 CA= -16/5= -3.2 FS = 11/3 = 3.667 Directional Vector coordinates: x-axis: -3.2 + 4.67 = 1.47 Y-axis: -4 + 3.67 = -0.33

CONSERVATIVE

FS
6 5 4 3 2 1

AGGRESSIVE

CA
-7 -6 -5 -4 -3 -2 -1 1 -1 -2 -3 -4 -5 2 3 4 5 6 7

IS

DEFENSIVE
ES

-6

COMPETITIVE

ANALYSIS OF SPACE MATRIX

Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Joint Venture HTC is competing fairly in an unstable market. Organization lies in COMPETITIVE quadrant. They should really go for market penetration, product development. The result of TOWS analysis is matching with space matrix .The decision regarding market penetration, product development will be beneficial to move with the overall performance is good, firms financial strength is a dominating factor in the industry.

BOSTON CONSULTING GROUP (BCG) MATRIX RELATIVE MARKET SHARE

High 1.0

Medium 0.5 AMERICA

Low 0.0

Stars
High +20

EUROPE

INDUSTRY GROWTH
ASIA

RATE

Medium 0

Cash Cows

Dogs

Low -20

ANALYSIS OF BCG:
All three regions i.e. Asia, Europe and America lie in the first quadrant that is QUESTION MARK, means HTC needs to penetrate its market to bring these regions in STAR. HTCs demand has been growing rapidly among upper-middle and working class due to its introduction of ANDROID phones which are more attractive and have more functions and features compared to NOKIA.

The Internal-External (IE) Matrix

THE IFE TOTAL WEIGHTED SCORES
Strong 3.0 to 4.0
I

Average 2.0 to 2.99

II

Weak 1.0 to 1.99

III

E F E W E I G H T E D

High 3.0 to 3.99

IV V VI

Medium 2.0 to 2.99

VII VIII IX

Low 1.0 to 1.99

S C O R E

DIVISION REVENU E Billion ($) ASIA 47.7 EUROPE AMERIC A TOTAL 90.1 141 278.8

REVENUE % 17.1 32.2 50.6 100

PROFIT Billion ($) 9.842 14.15 15.338 39.33

PROFIT % 25 36 39 100

IFE

EFE

1.98 2.39 2.56

2.10 2.53 2.67

ANALYSIS OF IE:
Asia region lies in weak quadrant and HTC after entering into new market INDIA need to put its huge money on advertising. They need to sow many HYV (high yielding variety) seeds to harvest well, like showing effective ads that should particularly focus executive class. They should not advertise their android phones only, but their windows phones and tabs as well. However, America and Europe lie in the medium quadrant means they are doing little well, still they need to strength their position through the strategy of product development to move to strong quadrant. As its rivals apple and Samsung have already captured a huge market and Motorola is also coming up with new range of android phones, so HTC needs to keep an eagle eye on its rival and must respond to the public demand as both America and Europe are the high profit yielding areas for HTC.

SLOW MARKET GROWTH

Grand Strategy Matrix

RAPID MARKET GROWTH

Quadrant II

Quadrant I

WEAK COMPETITIVE POSITION

Concentric Diversification
Conglomerate Diversification Horizontal Diversification Retrenchment Divestiture Liquidation

STRONG COMPETITIV E POSITION

Quadrant III

Quadrant IV

SLOW MARKET GROWTH

THE QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

This technique is the QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM), which comprises stage 3 of the strategy-formulation analytical framework. This technique objectively indicates which alternatives strategies are best. The QSPM uses input from stage 1 analyses and matching results from stage 2 analyses to decide objectively among alternative strategies
DIVERTIFICATION IN PRODUCTS KEY EXTERNAL FACTORS WEIGHT AS TAS EXPAND MARKET IN ASIA & CHINA AS TAS

OPPORTUNITIES: 1. HTC collaborated with Google and launched their 0.12 cell phones with Google Android OS install in it.
2. Strategic partnership with Beat Electronics by acquiring 51% shares. 3. Patent agreements. 4. Industrial growth rate is high for HTC. 0.11

4.00

0.48

2.00

0.24

3.00

0.33

3.00

0.33

0.05 0.10

2.00
3.00 3.00

0.2
0.21 0.24

3.00
4.00 4.00

0.3
0.28 0.32

5. Increasing demand for Touch screen phones with 0.07 3G technology. 6. Manufacturing units in Brazil. 0.02 7. As BlackBerry is an executive phone, HTC 0.08 should also try to reach the executive level. THREATS: 1. Rapid technological change. 2. Intense competition. 3. Stringent regulation. 4. Difficult to make HTC phones customer first preference when Apple, Nokia and BlackBerry phones are in the market (customer loyalty).

0.13 0.08 0.02 0.11

3.00 4.00 2.00

0.39 0.32 0.22

2.00 3.00 4.00

0.26 0.24 0.44

RECOMMENDATIONS
STRATEGY 1: LOWER ITS MARKET PRICES:
The fact that Apple's new phone isn't significantly cheaper than its previous iPhone 4 offering should allow HTC to increase market share in key emerging markets with its cheaper Smartphone models.

STRATEGY 2: ADVERTISE EFFECTIVELY:

AS the Smartphone market has grown nearly ninety percent from last year and more than six times the overall mobile phone market indicates strong demand worldwide and vendors' collective ability to meet that demand.

STRATEGY 3: EXPAND MARKETS IN ASIA & CHINA:

As the Taiyuan-based company has increased market share in the U.S., Asia and Europe in recent years with its early adoption of Google Inc.'s Android software, becoming the fifth-largest producer of Smartphone globally by shipments in the second quarter. Over the past year it has acquired a variety of companies, including Beats, a headphone maker started by music producer Dr. Dre, to build out its service offerings and compete with Apple Inc.'s iPhone and Samsung Electronics Co.'s Smartphones

Matrix Analysis Summary

Alternative Strategies IE SPACE GRAND COUNT

Forward Integration
Backward Integration Horizontal Integration Market Penetration Market Development

*
* * * *

*
* * * *

2
2 2 2 2

Product Development
Concentric Diversification Conglomerate Diversification Horizontal Diversification Joint Venture Retrenchment Divestiture Liquidation

*
* * * * * * *

2
1 1 1 1 1 1 1