HTC SMARTPHONE

COMPANY

Outline

Brief History of HTCWhere we are nowVision and Mission External Analysis

CPMEFESummary

Internal Analysis

IFE

Strategic AnalysisSWOT MatrixSPACE MatrixGrand Strategy MatrixIE matrixBCGSummary

Possible strategiesQSPM

RecommendationsStrategic 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.

Recently HTC has introduced the EVO 3D And HTC 7

Apple in 2005

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 value-added 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 porter’s five forces. Competitor’s market share Android 25%Symbian 37%Apple 17%RIM 15%windows Mobile 3%

Porter’s five forces Analysis on HTCBargaining 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 SuppliersPhones 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 ProductsMobile 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 IndustryExisting 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 firm’s major competitors and its particular strengths and weakness in relation to a sample firm’s 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 WEIGHT RATING WEIGHTED

SCOREOPPORTUNITIES:1. HTC collaborated with Google and launched their cell phones with Google Android OS install in it.

0.12 3 0.36

2. Strategic partnership with Beat Electronics by acquiring 51% shares.

0.11 3 0.33

3. Patent agreements. 0.05 2 0.104. Industrial growth rate is high for HTC. 0.10 3 0.305. Increasing demand for Touch screen phones with 3G technology.

0.07 4 0.28

6. Manufacturing units in Brazil. 0.02 2 0.047. As BlackBerry is an executive phone, HTC should also try to reach the executive level.

0.08 1 0.08

THREATS:1. Rapid technological change. 0.13 3 0.392. Intense competition. 0.08 3 0.243. Stringent regulation. 0.02 1 0.024. Difficult to make HTC phones customer first preference when Apple, Nokia and BlackBerry phones are in the market (customer loyalty).

0.11 3 0.03

5.Numbers of products are less as compared to the competitors

0.11 3 0.33

TOTAL 1.00 2.8

ANALYSIS OF EFE MATRIXThe 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

HTC

NOKIA

CRITICAL SUCCESS FACTORS

WEIGHT

RATING WEIGHTED

SCORE

RATING

WEIGHTEDSCORE

RATING

WEIGHTEDSCORE

Market share 0.1 3 0.3 2 0.2 3 0.3

Price 0.1 2 0.2 2 0.2 3 0.3

Financial position 0.15 3 0.45 3 0.45 2 0.3

Product quality 0.15 3 0.45 3 0.45 2 0.3

Consumer loyalty 0.15 4 0.6 2 0.30 3 0.45

Advertising 0.05 2 0.1 1 0.05 3 0.15

Management 0.07 4 0.28 4 0.28 2 0.14

Global expansion 0.08 3 0.24 3 0.24 3 0.24

Innovation 0.15 4 0.6 4 0.6 3 0.45

TOTAL 1.00 3.22 2.77 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. That’s because HTC smart phones are expensive and are not affordable for many of the smart phones users

IFE MATRIX FOR HTC

KEY EXTERNAL FACTORS WEIGHT

RATING WEIGHTED SCORE

STRENGHTS:1. It is the leading maker of PDA’s smart phones in the world.

0.04 4 0.16

2. There is the strong setup of R&D in HTC. 0.14 4 0.563. HTC caters the customer national and internationally and the numbers of customers.

0.13 4 0.52

4. HTC smart phones equipped with windows vista, Android OS, HD video recording, multiple touch system.

0.06 3 0.18

5. Industry recognition and awards. 0.11 4 0.446. Financial performance. 0.03 3 0.097. Expending market share in sectors. 0.10 3 0.3

WEAKNESS:1. HTC is not very much recognized brand in the market as compare to the Apple, Nokia and Blackberry.

0.10 2 0.2

2. High manufacturing cost of HTC. 0.07 1 0.073. Declining liquidity ratio. 0.04 2 0.084. Patent infringement litigation. 5. Small range of cell phones model as compared to Nokia.

0.01 0.08

2 1

0.02 0.08

6.huge market share capture by Nokia, Apple and BlackBerry etc.

0.09 1 0.09

TOTAL 1.00 2.79

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 

TOWS MATRIX OF HTC SO STRATEGIES

WO - STRATEGIES

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

1. Purchase all legal rights (W4, O3).

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

2. Lower their cost by taking advantage of lower labor cost and production unit (W2, O7).

3. Increasing market share by providing innovative products to customers as compared to rivals (S7, O7).

3. Overcome short term debt by strategic alliances (W3, O2).

4.Bring out new products in collaboration with experience partnership(S8,O2)

4. Take advantage of sponsorship to make space in hearts of customers (W1, W6, and O6).

5.Acheived many rewards and recognition by Beating electronic rivals(S5,O2)

ST- STRATEGIES

WT - STRATEGIES

1. Introduced new products to gain customer trust (S4, T4, and T5).

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

2. Compete with rival by focus on performance, Technological advancement and brand recognitions and awards (S5, S6, S7, T2, T1).

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

3. Compete with rivals by providing services to customers nationally and internationally (S3, T2).

3. Compete with rivals with new techniques (T2, W6, and W1).

4. Enlarge sales volume and market share with more promotional activities as compared to rivals (S7, T5).

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 RATINGS

1. Purchase all legal rights. 3

2. Overcome short term debt by strategic alliances. 33. It is the leading maker of PDA’s smart phones in the world and there is strong setup of R&D in HTC.

5

11 INDUSTRY STRENGTH

1. Compete with rivals by providing services to customers nationally and internationally.

4

2. Defect in BlackBerry sales decline product brings out HTC product.

4

3. Producing 3G technology in response to rapid technological change.

6

14 ENVRIONMENTAL STABILITY

1.Compete with rivals with new techniques

-2

2. Supported by technology launches and threaten by popular and highly in demand because of high cost.

-5

3. Less brand awareness leads to lower marketing sales. -64.Compete with rivals by focus on performance, technology etc. -3

-16 COMPETITIVE ADVANTAGE

1. HTC has long experience with network suppliers. -3

2. Introduced new products to gain customer trust. -2

3. Enlarge sales volume by market share with more promotional activities as compared to rivals. -5

4. Put attractive features to the products. -25. Keep cost low to attract customers. -4 -16

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

CONSERVATIVE FS AGGRESSIVE

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

DEFENSIVE

ES COMPETITIVE

-1

-2

-3

-4

-5

2

1

3

4

5

6

-6

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

Stars

Cash Cows

Dogs

AMERICA

EUROPE

ASIA

High 1.0 Medium 0.5

Low 0.0

RELATIVE MARKET SHARE

High +20

Medium 0

Low -20

INDUSTRY GROWTH RATE

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. HTC’s 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 THE IFE TOTAL WEIGHTED SCORES

 

1.0 to 1.99

 

IXVIIIVII

Low 

2.0 to 2.99  

VIVIV

Medium

 

3.0 to 3.99 

IIIIII

High

 

1.0 to 1.992.0 to 2.993.0 to 4.0 WeakAverageStrong

EFE

WEIGHTED

SCORE

EFE

WEIGHTED

SCORE

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.

RAPID MARKET GROWTH

Grand Strategy Matrix 

Quadrant II Quadrant I

Quadrant III Quadrant IV

STRONG COMPETITIVE POSITION

WEAK COMPETITIVE POSITION

Concentric Diversification

Conglomerate Diversification

Horizontal Diversification

Retrenchment

Divestiture

Liquidation

SLOW MARKET GROWTH

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

EXPAND MARKET IN ASIA & CHINA

KEY EXTERNAL FACTORS WEIGHT AS

TAS

AS

TAS

OPPORTUNITIES:1. HTC collaborated with Google and launched their cell phones with Google Android OS install in it.

0.12 4.00 0.48 2.00 0.24

2. Strategic partnership with Beat Electronics by acquiring 51% shares.

0.11 3.00 0.33 3.00 0.33

3. Patent agreements. 0.05 - - - -

4. Industrial growth rate is high for HTC. 0.10 2.00 0.2 3.00 0.3

5. Increasing demand for Touch screen phones with 3G technology.

0.07 3.00 0.21 4.00 0.28

6. Manufacturing units in Brazil. 0.02 - - - -7. As BlackBerry is an executive phone, HTC should also try to reach the executive level.

0.08 3.00 0.24 4.00 0.32

THREATS:1. Rapid technological change. 0.13 3.00 0.39 2.00 0.262. Intense competition. 0.08 4.00 0.32 3.00 0.243. Stringent regulation. 0.02 - - - -4. Difficult to make HTC phones customer first preference when Apple, Nokia and BlackBerry phones are in the market (customer loyalty).

0.11 2.00 0.22 4.00 0.44

5.Numbers of products are less as compared to the competitors

0.11 1.00 0.11 2.00 0.22

SUBTOTAL 1.00 2.5 2.33DIVERSIFICATION IN PRODUCTS

EXPAND MARKET IN ASIA & CHINA

KEY INTERNA FACTORS WEIGHT AS TAS AS TAS

STRENGTH:

1. It is the leading maker of PDA’s smart phones in the world.

0.04 1.00 0.04 4.00 0.16

2. There is the strong setup of R&D in HTC. 0.14 2.00 0.28 3.00 0.423. HTC caters the customer national and internationally and the numbers of customers.

0.13 3.00 0.39 1.00 0.13

4. HTC smart phones equipped with windows vista, Android OS, HD video recording, multiple touch system.

0.06 2.00 0.12 1.00 0.06

5. Industry recognition and awards. 0.11 - - - -6. Financial performance. 0.03 - - - -7. Expending market share in sectors. 0.10 1.00 0.1 4.00 0.4

WEAKNESSES:1. HTC is not very much recognized brand in the market as compare to the Apple, Nokia and Blackberry.

0.10 2.00 0.2 4.00 0.4

2. High manufacturing cost of HTC. 0.07 1.00 0.07 3.00 0.213. Declining liquidity ratio. 0.04 - - - -4. Patent infringement litigation.

5. Small range of cell phones model as compared to Nokia.

0.010.08

-4.00

-0.32

-1.00

-0.08

6.huge market share capture by Nokia, Apple and BlackBerry etc.

0.09 3.00 0.27 3.00 0.27

SUBTOTAL 1.00 1.79 2.13SUM TOTAL ATTRACTIVENESS SCORE 4.29 4.46

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 Smartphone’s

Matrix Analysis Summary Alternative Strategies IE SPACE GRAND COUNT

Forward Integration * * 2

Backward Integration * * 2

Horizontal Integration * * 2

Market Penetration * * 2

Market Development * * 2

Product Development * * 2

Concentric Diversification * 1

Conglomerate Diversification * 1

Horizontal Diversification * 1

Joint Venture * 1

Retrenchment * 1

Divestiture * 1

Liquidation * 1