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STAGE 1
THE INPUT STAGE
EXTERNAL FACTOR EVALUTION (EFE) MATRIX COMPETITIVE PROFILE MATRIX (CPM) INTERNAL FACTOR EVALUTION (IFE) MATRIX STRENGHT-WEAKNESSOPPORTUINITIES-THREATS(SWOT) MATRIX STRATEGIC POSITION AND ACTION EVALUTION (SPACE) MATRIX BOSTON CONSULTING GROUP (BCG) MATRIX INTERNAL-EXTERNAL(IE)MATRIX GRANG STRATEGY MATRIX
STAGE 2
THE MATCHING STAGE
STAGE 3
THE DECISION STAGE
HTC
HTC
3 2 3 4 2 1
3 3 1 3
0.11 1.00
0.33 2.8
HTC
HTC
WEIG HT
0.1 0.1 0.15 0.15 0.15 0.05 0.07 0.08 0.15
RATI NG
3 2 3 3 4 2 4 3 4
TOTAL
1.00
3.22
2.77
2.63
HTC
HTC
4 3 3
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 to Nokia. 0.10 2 0.2
1 2 2 1
HTC
6.huge market share capture by Nokia, Apple and BlackBerry etc. 0.09 1
0.09
TOTAL
1.00
2.79
HTC
The SWOT Matrix is an important matching tool that helps managers develops four types of strategies: SO Strategies use a firms internal strengths to tae advantage of external opportunities, WO Strategies aim at improving internal weakness by taking advantage of external opportunities, ST Strategies use a firms strengths to avoid or reduce the impact of external threats, WT Strategies are defensive strategies tactics directed at reducing internal weakness and avoiding external threats.
3.
BCG &IE Matrix are designed specifically to enhance a multi divisional firms efforts to formulate strategies. The BCG Matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate.
HTC
The Internal-External (IE) Matrix positions an organizations various divisions in a nine-cell display.
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). 3. Overcome short term debt by strategic alliances (W3, O2).
4. Take advantage of sponsorship to make space in hearts of customers (W1, W6, and O6).
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).
WT - STRATEGIES
1. Put attractive features to the product (W6, T5).
3. Compete with rivals with new techniques (T2, W6, and W1).
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HTC
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).
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. -5 -6 -3 -16
COMPETITIVE ADVANTAGE
-3 1. HTC has long experience with network suppliers.
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HTC
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.
-5 -2 -4 -16
CONCLUSION:
ES= -16/4= -4 IS = 14/3 = 4.67
FS = 11/3 = 3.667
Directional Vector coordinates: x-axis: -3.2 + 4.67 = 1.47 Y-axis: -4 + 3.67 = -0.33 FS CONSERVATIVE 6 5 4 3 2 1 CA -7 -6 -5 -4 -3 -2 -1 1 -1 -2 2 3 4 5 6 7 IS AGGRESSIVE
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HTC
-3 -4 -5 DEFENSIVE ES COMPETITIVE
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.
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HTC
Stars
Question Marks
AMERICA EUROPE
ASIA
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HTC
Cash Cows Dogs
I N D U S T R Y G R O W T H R A T E
Medium 0.5
Low 0.0
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 Medium 0 attractive and have more functions and features compared to NOKIA. Although it has not been reached to the level of apple yet, but can easily target executive class by reaching to the companies and having contract with them to give
DIVISION ASIA EUROPE REVENUE REVENUE PROFIT Billion ($) % Billion ($) 47.7 17.1 9.842 90.1 32.2 50.6 100 14.15 15.338 39.33 PROFIT % 25 36 39 100 MARKET SHARE 21.44 39.89 45.60 GROWTH RATE +6 +9 +10
their executive people HTC phones. According to the recent analysis it has been observed that many people of top level management have started to prefer Android phones due to their enhanced operating system. So, its a good time for HTC to 15
HTC
engage itself in good contracts with well renounced multinational companies and to have a good advertising.
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HTC
E F E W E I G H T E D S C O R E
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 17
HTC
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.
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HTC
Quadrant II
Quadrant I
HTC
Concentric Diversification Conglomerate Diversification Horizontal Diversification Retrenchment Divestiture Liquidation Alternative Strategies
HTC
Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Concentric Diversification Conglomerate Diversification Horizontal Diversification Joint Venture Retrenchment Divestiture Liquidation * * * * * * * * * * * * *
* * *
* * *
HTC
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. WEIGHT AS TAS
AS
TAS
0.12
4.00
0.48
2.00
0.24
0.11 0.05
4. Industrial growth rate is high for 0.10 HTC. 5. Increasing demand for Touch screen 0.07 phones with 3G technology. 6. Manufacturing units in Brazil. 0.02 7. As BlackBerry is an executive phone, HTC 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). 5.Numbers of products are less as compared to the competitors SUBTOTAL 0.08
0.11 1.00
1.00
0.11
2.00
0.22 2.33
WEIGHT
HTC
STRENGTH: 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. WEAKNESSES: 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. 0.04 0.14 0.13 1.00 2.00 3.00 0.04 0.28 0.39
0.06
2.00
0.12
1.00
0.06
1.00
0.1
4.00
0.4
0.10
2.00
0.2
4.00
0.4
5. Small range of cell phones model as 0.08 compared to Nokia. 6.huge market share capture by Nokia, 0.09 Apple and BlackBerry etc. SUBTOTAL 1.00 SUM TOTAL ATTRACTIVENESS SCORE
ANALYSIS OF QSPM:
The two alternative strategies__ (1) DIVERSIFICATION IN PRODUCTS (2) EXPAND MARKET IN ASIA & CHINA___ are being considered for HTC , by sum total attractiveness scores of 4.29 and 4.46 that the analysis indicates that 23
HTC
HTC should go for market development in ASIA and CHINA. As both CHINA and Asias largest territory holder INDIA fall under the category of coming up super power country, so its will prove to be a good strategy for HTC to expand but side by side they need to have a good marketing to have a brand recognition. Furthermore, they should try to reach to target executive level as their android phones can easily make their market in their segment due to their operating system.
RECOMMENDATIONS:
STRATEGY 1:
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HTC
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
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