Htc 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