Htc Case Analysis

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Case Analysis
--HTC Corp.in 2009

Class: Competitive Marketing Strategy

Student Name: Fisher Yu

1. Evaluate HTC’s performance to date. What are its competitive advantages and vulnerabilities? Be sure to elaborate on HTC and its competitors’ positioning on performance and cost.

Financial performance of HTC compared with its main competitors For this part, we will be using ROA (return on assets), ROE (return on equity), and profit margin to evaluate HTC’s abilities to generate profits and to control its cost with comparison to other manufacturers. With reference to the financial ratios of HTC in Exhibit 1a, over five years (2004 to 2008), its average net profit margin was 18.8%, return on assets 34.2%, and return on equity 59%. Its earnings per share (EPS) were 13.49, 32.81, 56.97, 50.48 and 36.64 respectively. The company is highly competitive and profitable as a whole. According to Exhibit 1a, and 6, and chart 1, same with its rankings in the smartphone sales, the ranking of the scale of its total revenue also in the fifth place, behind Samsung, Nokia, Apple, and RIM. But its revenue is rapidly growing, doubling nearly every three years. That growth rate is far better than most of the players in the industry and the average. Its return on sales ratio is among the three highest in the industry, which is an average of more than 15% percent. This indicates that HTC has a very good gross profit margin.

Marketing performance of HTC compared with its main competitors For this part, we will take a look at handsets shipping per year, performance in different markets, and current positioning of several competitors in the industry. As shown in graph 1, the overall market share of HTC in the smartphone industry is in the fifth place, after Samsung, Apple, Nokia and RIM. HTC did not perform very well in Q4, 2011 compared with the previous three quarters. Among all five vendors, the market share of HTC is going down the fastest (graph 1). The market share of Apple is coming back into an upward trend after a two-month down and regaining its first place. Samsung’s market share is steadily growing. Nokia and RIM are both facing very hard times as their market shares are both going down very quickly. But according to the latest data provided by Reuters, based on the total shipment by Q2, 2012, HTC has become the fourth largest smartphone vendor behind Samsung, Apple and Nokia. HTC is the NO.1 windows mobile OS vendor and the No.2 Android OS vendor. But Windows mobile OS accounts for just a very small portion of the total mobile market, and plus, there is a huge gap between Samsung’s sales and HTC’s, even if HTC is in the second place among all Android vendors. Seemingly, the rankings are good, but indeed there is huge gap between HTC and the other three top vendors, even Nokia, not to mention Apple and Samsung. We can have a general idea about how HTC is doing in different markets when looking at Chart 3. There are 8 countries listed in the chart, and in six of them, HTC’s market penetration is falling out of the top three except in the USA and the UK. According to Exhibit 10a and 10b, we can conclude that in the case time period, the brand awareness or consumers’ acceptance for HTC is very low in the US, only 2% of consumers will consider HTC as their first brand choice. But in Europe, the situation may be better, an average of more than 15% of consumers in six countries will definitely consider HTC when they purchase a smartphone. HTC has a long way to go to increase its brand awareness in the US.

HTC’s competitive advantages and vulnerabilities
Advantages
* HTC has built a close relationship with Microsoft via year-long cooperation and is the NO.1 Microsoft mobile device manufacturer. * HTC has built a strong relationship with suppliers such as TI, Handspring, Qualcomm, etc. through years of collaboration. * Its strong R&D abilities developed through its ODM years and its relationships built with...
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