Read the attached HTC case: Peter Chou and Cher Wang want to make HTC into the leading smart phone company in the world. What kind of strategic actions are needed to achieve this goal? Listen
HTC start up as a professional original engineering manufacture company (OEM) for PDA and other computer parts in 1999. While it changes its core business from PDA to smart phones, it discovered an opportunity of developing its own brand. In 2007, it brands itself into HTC while introducing the “TOUCH” series. This paper discusses the theory of global strategy for individual organizations and the necessary strategic actions for HTC in order to transfer itself into a leading smart phone company in the world.
HTC’s business development philosophy
HTC’s business development philosophy is not to follow the steps of competitors. They deliberately did not review the action of the competitors in the market. It is believed that if the strategic is planned according to the competitor then focus company direction will shift to the competitors. As a result, the organization will always want to go beyond the competitors. In the end you will have to follow competitor’s rules all the time. HTC insisted to follow different paths compared to the others. For example, while other Taiwan's handset OEM companies focused on customs factory orders for large mobile phone brand; HTC was actively discussing co-operation opportunities the biggest European telecommunication operators such like Vodafone, Orange, O2, and T-Mobile.
International strategy of HTC
The international strategy has four different terms:
• Multinationals – treat each country market as independent and best service by a subsidiary dedicated to meet its local need and conditions. • Global – They emphasis worldwide strategic to benefit from operational scale. They are heavily centralized, with direction and control mainly from central headquarters. • International firms- copy from the center to transfer and share knowledge around various business unit to allow the whole organisation to benefit from all parts of the organization. • Transnational- generate and transfer knowledge and expertise both locally and centrally.
Smart phones are used in homogeneously way in all market; therefore it is a genuine global product. This makes HTC pursue a global strategy but have a regional strategy in different regions for their product. For example: HTC is a Taiwan based company, but they choice to debut its Diamond series phone in London in May 2008; because the 3G and 3.5G high-end communications standard used is far greater in Europe than North America or anywhere else in the world. The Diamond series phone targets the high-end market of the business man. The HTC ‘s Europe prior Asia then North American strategy shows that HTC determine its sales strategy based on the geographical market strategy action based on geographical market characteristics.
Global strategy characteristic and HTC’s strategy action
Bartlett and Ghoshal (1989) suggested the global strategy organisation have the following characteristics:
1. Configuration of the asset and capabilities centralized and scaled globally 2. Their oversea operations are to implement parent company’s strategies. 3. The knowledge and product development is retained at center.
HTC took the following strategy action which is related to these characteristics:
In terms of its global distribution strategy, HTC signed up a global distribution channel contract with USA's largest mobile phone distributors; Bright point. It provides HTC marketing, selling, global logistics and customized logistics services through its 25,000 global channel. The proportion of HTC's own brand sales has moved up. Communities dominate brands (2010) also reported that HTC is also becoming one of the top 5 smart phone mobile brand by 2009 as result.
HTC took a non-exclusive...