Second Presentation —HTC Analysis Professor ：黃光渠 Group members...

Second Presentation—HTC Analysis

Professor ：黃光渠Group members ：許祥哲、陳佩澤、顏瑜、曾彥瑜

Outline

1) Porter five forces analysis( 許祥哲 )

2) Internal factor evaluation( 顏瑜 )

3) External factor evaluation( 陳佩澤 )

4) Competitive Profile Matrix( 曾彥瑜 )

Porter Five ForcesAnalysis

Bargaining power of

buyers

Threat of new

entrants

Threat of substitute

Intensity of competitive rivalry

Bargaining power of suppliers

Porter Five Forces Analysis

Bargaining power of

buyers

Threat of new

entrants

Threat of substitute

Intensity of competitive rivalry

Bargaining power of suppliers

Porter Five Forces Analysis

HTC started from ODM, so they have made a good relationship with many components suppliers.

With the advance of technology, there are many companies have ability to make mobile components, so HTC have many choices.

Generally speaking, there is a long-term contract between HTC and suppliers in mobile industry.

So we think the bargaining power of suppliers is low.

Bargaining power of suppliers

Porter Five Forces Analysis

There are many mobile companies in the market, so buyers have many choices.

With free flow of information in the market, buyers can follow market prices easily.

So we think buyers have bargaining power to HTC.

Bargaining power of buyers

Porter Five Forces Analysis

Mobile industry is a big market.

There are more and more company entering to the market.

Many company which in other industry started to produce smart phone. Such as Google, Lenovo, Microsoft.

As we mention above, we think the threat of new entrants is high.

Threat of new entrants

Porter Five Forces Analysis

The substitute of smartphone is tablet.

Although tablet can make a phone call by Skype, Facebook, but smartphone’s characteristic is easy to bring.

In many country, the popularity rates of smartphone are still rising

The CEO of BlackBerry even said “In five years I don't think there'll be a reason to have a tablet anymore”.

So We think smartphone have low threat of substitute products.

Threat of substitute

Porter Five Forces Analysis

There have had so many mobile companies in the world.In Europe and America ：

In South Korea and Japan ：

Intensity of competitive rivalry

Porter Five Forces AnalysisIn China ：

Porter Five Forces Analysis

There have had so many mobile companies in the world.

So we think mobile industry is a highly competitive market.

Intensity of competitive rivalry

Internal Factor Analysis

Strength

HTC cooperated with Google and released new tablet Nexus 9.

1. Right partner

2. Loyal customers

Weighted:6% Rate:3 Weighting score:0.18

Weighted:7% Rate:4 Weighting score:0.28

3. High quality products

4. International presences

HTC released high quality smart phones, such as HTC M8 with metal case.

HTC sets up maintenance, service and market development stores in Europe, America, Japan, Hong Kong, Shanghai and other places.

Weighted:8% Rate:3 Weighting score:0.24

Weighted:10% Rate:4 Weighting score:0.4

5. Convenient user operating interface

6. Good warranty service

HTC’s user operating interface—HTC Sense is popular with its customers.

HTC provides at-home services and lives on-line customer services.

Weighted:7% Rate:3 Weighting score:0.21

Weighted:11% Rate:4 Weighting score:0.44

Weakness

Compared with Samsung applied 4683 patents, Sony applied 2100, and Apple applied 1501 patents, HTC only applied 215 patents in 2013.

1. Less product patents

2. Poor marketing plansComparing the costs in marketing, in 2013, Samsung cost 363 million US dollars in America, and Apple cost 351 million dollars. However, HTC just cost 75.8 million dollars in marketing in 2013.

Weighted:5% Rate:2 Weighting score:0.10

Weighted:10% Rate:1 Weighting score:0.1

3. Weak brand imageAccording to “BrandZ Top 100 Most Valuable Global Brands 2014”, Apple is rank 2, Samsung is rank 29, but HTC is out of rank 100.Weighted:7% Rate:1 Weighting score:0.07

4. Lack of product characteristics

5. Low market share

Although the strategy “Market Saturation” can earn from different customer groups, it also separates HTC’s resources to different products.

The global market share ranking in 2013 ： Rank 1 ： Samsung(31.6%) Rank 2 ： Apple(15.5%) Rank 3~5 ： Huawei, LG, Lenovo(4.5~5%) Rank11 ： HTC(2%)

Weighted:9% Rate:1 Weighting score:0.09

Weighted:11% Rate:1 Weighting score:0.11

6. Too rely on operators in China(Low ability to bargain with operators)

It let HTC can’t communicate with customers directly. Otherwise, although operators can sell many products to HTC, they also reduce the gross profit of HTC.

Weighted:9% Rate:1 Weighting score:0.09

IFE Matrix for HTCKey Internal Factors (Strengths) Weight Rate Weight Score

1. right partner 7% 4 0.28

2. loyal customers 6% 3 0.18

3. high quality product 10% 4 0.40

4. international presences 8% 3 0.24

5. convenient user operating interface 11% 4 0.44

6. good warranty service 7% 3 0.21

Key Internal Factors (Weakness) Weight Rate Weight Score

1. less product patents 5% 2 0.1

2. poor marketing plan 10% 1 0.1

3. weak brand image 7% 1 0.07

4. lack of product characteristic 11% 1 0.11

5. low market share 9% 1 0.09

6. too rely on operators in China 9% 1 0.09

Total weighted score： 2.31

External Factor Analysis

Opportunities

There may be more people consider in HTC productions.

1. More and more people use smart phones.

Weighted:17% Rate:4 Weighting score:0.68

2. Rising market share of Android.There will have more people choose smart phone with Android system like HTC, instead of Apple or Windows phone.

Weighted:18% Rate:4 Weighting score:0.72

3. Reaching a settlement with Nokia.

4. New technology.

Nokia and HTC have settled all pending patent litigation between them. For this reason, HTC cleaned the barrier on patents.

With new technology, HTC could develop better production.

Weighted:12% Rate:2 Weighting score:0.24

Weighted:16% Rate:3 Weighting score:0.48

Threats

1. More and more China mobile manufacturers.HTC have to face more strong rivals.

Weighted:16% Rate:1 Weighting score:0.16

3. Samsung can produce component by itselfSamsung can produce CPU and panel by itself, but HTC have to buy to other manufacture. If HTC want to use best quality component, they should cost much money; if HTC want to cost down, they only can use secondary component. That’s why Samsung can beat HTC.

Weighted:11% Rate:2 Weighting score:0.22

2. Less subsidies from government.In South Korea, government subsidized their companies much to support them compete with foreign company.

Weighted:10% Rate:2 Weighting score:0.20

Key External Factors(opportunities) Weight Rate Weight Score

1. More and more people use smart phones. 17% 4 0.68

2. Rising market share of Android. 18% 4 0.72

3. Reaching a settlement with Nokia. 16% 3 0.48

4. New technology. 12% 2 0.24

Key External Factors(threats) Weight Rate Weight Score

1. More and more China mobile manufacturers. 16% 1 0.16

2. Less subsidies from government. 10% 2 0.20

3. Samsung can produce components by itself 11% 2 0.22

Total weighted score： 2.70

EFE Matrix for HTC

Competitive Profile Matrix

HTC Black Berry

weight score Weight score

score Weight score

Entry to china market

12% 4 0.48 3 0.24

Customer’s brand loyalty

11% 3 0.33 4 0.44

Market share 11% 2 0.22 1 0.11

Price competiveness

11% 3 0.33 3 0.33

Technology patents

10% 1 0.10 3 0.30

Financial situation 10% 2 0.20 1 0.10

Marketing plan 10% 2 0.20 2 0.20

Reputation and image

9% 2 0.18 3 0.27

Information security

8% 2 0.16 4 0.32

Product diversification

8% 3 0.24 1 0.08

HTC Black Berry

weight score Weight score

score Weight score

Entry to china market

12% 4 0.48 3 0.24

Customer’s brand loyalty

11% 3 0.33 4 0.44

Market share 11% 2 0.22 1 0.11

Price competiveness

11% 3 0.33 3 0.33

Technology patents

10% 1 0.10 3 0.30

Financial situation 10% 2 0.20 1 0.10

Marketing plan 10% 2 0.20 2 0.20

Reputation and image

9% 2 0.18 3 0.27

Information security

8% 2 0.16 4 0.32

Product diversification

8% 3 0.24 1 0.08

HTC Black Berry

weight score Weight score

score Weight score

Entry to china market

12% 4 0.48 3 0.24

Customer’s brand loyalty

11% 3 0.33 4 0.44

Market share 11% 2 0.22 1 0.11

Price competiveness

11% 3 0.33 3 0.33

Technology patents

10% 1 0.10 3 0.30

Financial situation 10% 2 0.20 1 0.10

Marketing plan 10% 2 0.20 2 0.20

Reputation and image

9% 2 0.18 3 0.27

Information security

8% 2 0.16 4 0.32

Product diversification

8% 3 0.24 1 0.08

HTC Black Berry

2155136

Up to 2013….

HTC Black Berry

weight score Weight score

score Weight score

Entry to china market

12% 4 0.48 3 0.24

Customer’s brand loyalty

11% 3 0.33 4 0.44

Market share 11% 2 0.22 1 0.11

Price competiveness

11% 3 0.33 3 0.33

Technology patents

10% 1 0.10 3 0.30

Financial situation 10% 2 0.20 1 0.10

Marketing plan 10% 2 0.20 2 0.20

Reputation and image

9% 2 0.18 3 0.27

Information security

8% 2 0.16 4 0.32

Product diversification

8% 3 0.24 1 0.08

HTC use Android as operating system, which has less constraints on their software, security system isn’t solid. BlackBerry put emphasis on consumer’s

security and privacy.

2013 cost in marketing(million US dollars)

Samsung : 363 Apple :351 HTC : 75.8

HTC’s product diversify from high price to low prices.

BlackBerry only launched one or two products in one system generation.

HTC Black Berry

weight score Weight score

score Weight score

Entry to china market

12% 4 0.48 3 0.24

Customer’s brand loyalty

11% 3 0.33 4 0.44

Market share 11% 2 0.22 1 0.11

Price competiveness

11% 3 0.33 3 0.33

Technology patents

10% 1 0.10 3 0.30

Financial situation 10% 2 0.20 1 0.10

Marketing plan 10% 2 0.20 2 0.20

Reputation and image

9% 2 0.18 3 0.27

Information security

8% 2 0.16 4 0.32

Product diversification

8% 3 0.24 1 0.08

2.44

2.39

Thank you

Q&A