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Topics: Strategic management, Windows Mobile, Android Pages: 5 (1224 words) Published: April 2, 2014

Memo: HTC’s Future Strategic Growth Plan

Doria, Brian Section 010
Prof. Siegel

Memo: HTC’s Future Strategic Growth Plan
To: Mr. Chou, CEO, HTC Corp.
From: Brian Doria, PwC Consultant

Executive Summary:

Mr. Chou the success of your company now face complex challenges in an era of rapid technological advances. It is time to implement new business strategies in order to continue HTC’s upward trajectory. Your competitors have raised the bar in the smart phone industry, and have challenged HTC’s future outlook in electronics. In this analysis, I formulated recommendations for HTC based off a SWOT analysis, horizontal integration analysis, and a vertical integration analysis.

Background of HTC:

Prior to 2012, HTC had six consecutive quarters of record sales, but the lacked differentiation in their product line. Founded in 1997, HTC formed valuable partnerships with Microsoft, Texas Instruments, and Qualcomm and developed PDAs and mobile devices. In the early 2000’s, HTC’s original strategy of manufacturing phones for carriers and other business was very successful with profit margins over 20% compared to the industry’s average of 5%.

Mr. Chou when you were appointed CEO in 2006, your aggressive initiative “to brand and sell handsets under the company’s own name” led to impressive financial figures from 2006- 2011(Exhibit 1). Despite HTC having little brand recognition, these numbers were very impressive.

Exhibit 1: HTC 2006- 2007 Revenue & Net Income ($millions)

Your ‘Magic Labs’ research initiative and Android collaboration with Google were brilliant steps that led to the development of the HTC 1. Adding HTC sense differentiated you from competitors and oriented HTC’s focus on delivering products that enhances personal experiences with customers. Now you face the challenge of offering unique innovative products to existing and emerging markets.

After my analysis, I constructed strategies based off what HTC lacks and what needs to be implemented immediately in order to surpass competitors and break into the top 3 smart phone makers.

SWOT Analysis:

Ranked 2nd in Brand Loyalty and Satisfaction Survey
Ranked 1st over Apple’s Iphone, in Value for Money category Strong partnerships with Google & Microsoft
HTC Sense
Ambitious and optimistic CEO
Excellent R&D program: ‘Magic Labs’

Poor brand recognition
No approach towards the tablet market
Lack of own operating system and app store
Stubborn Board of directors
High manufacturing cost of 50 handset models
Customization drive costs up
Diminishing market share

Increasing brand awareness by advertising via social media, etc. Improving/ innovating HTC Sense
Forming alliances with Amazon and/or Google
Acquisitions of struggling manufactures/carriers
Strategic partnerships similar to Beat Electronics
Offering affordable smart phones in emerging markets like Brazil, India, and Russia Development of tablet, OS, and App store
Emerging market demands for smart phones
Applying technology to household appliances
Car integration of own OS in Taiwan and future expansion to Europe and Asia

Rapid technological change
Intense competition
Patent wars amongst competitors
Apple and Samsung retaining ranks of 1st and 2nd for many years to come

The SWOT analysis proves that HTC can develop a competitive edge because of the opportunities that rapid technological advances will present. Mr. Chou you serve as an excellent leader and can lead HTC to strive for record sales once again. For a company with poor brand recognition, your company excels in customer loyalty and satisfaction. This is very advantageous if you develop the proper products for the appropriate market.

That being said, ‘Magic Labs’ is top priority to budget for in order to develop and/or innovate...
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