SWOT Aanalysis

Environmental Analysis :

1. Opportunity:

The cooperation between HTC and the global important telecommunication manufacturers
formed a linkage effect. The successful cases of promotion for smart mobile phone by French
Telecommunication and Germany Telecommunication had brought about the other
telecommunication manufacturers to follow for inquiry, in attempt to duplicate the similar
cooperation model to reduce procurement cost and to exploit the data service market for
customers on mobile devices, therefore to consolidate the foundation of the wireless
communication field for the future. What customers concern is the functionality of smart mobile
phone rather than the preference or loyalty for particular operation platform. In coming
Broadband Age, customers will change their habit of usage, to make use of mobile phone for
internet communication.

2. Threat ：

Customers still concern with brand image when selecting for mobile phone. Fully with the
marketing style of the big telecommunication manufacturers and the channel brands are still
hardly to compete with the big mobile phone manufacturers which are aggressively engaged in
deployment for smart mobile phone. Meanwhile, the unfair competition and low price strategy
among Taiwan OEM manufacturers will quickly duplicate the cooperation model with the
telecommunication manufacturers. On the other hand, in order to reduce production cost, the
big mobile phone manufacturers provide technical supports and consign Taiwan OEM
manufacturers to produce high-end smart mobile phone for them to carry on market
penetration. Furthermore the functional type mobile phones which also belong to high-end
mobile phone products are transformed to enhance data function, this will also threaten the
smart mobile phone in market position

Resource Analysis:

1.Strength:

Possess with ample experience in research and development (R&D) and foundation on hand-
hold devices, together with the full supports from cooperation partners, to develop related
application technology.Existing customers include big PC manufacturers, big mobile phone
manufacturers, channel distributors and service providers, all are familiar with channels of
communication devices, therefore can employ existing customer relationship in various aspects
to promote the smart mobile phone.

2.Weakness：
The business growth is rapid enough while the infrastructure can not keep pace with market
development, such that logistics can not immediately support the front-line order fulfillment
and response to market fluctuation.The product belongs to introduction stage or growth stage
and most materials do not be standardized or are monopolized by a few manufacturers. The
procurement negotiation ability and the responsive ability for market materials are poor.With
company rapidly grows up, personnel amount expands too fast, while the education and
training are inadequate, therefore personnel need to cultivate and enhance their professional
competence.

STP

Segment Stylish and smart touch phones

Target Group Urban people from middle and upper income class

Device which is helps in communication and also

Positioning serves as an entertainment device

SWOT

1.Known for best overlay of Android OS with HTC

interface
2.High product quality
Strength 3.Highly popular in the urban market

1.Mostly Touch phones

2.Hardware issues
3.Lack of advertising and marketing
Weakness 4.High price

Opportunity 1.Growing and untapped market for Android

1.Threat from cheaper substitutes

Threats 2.Other prominent brands

Competition

1.Samsung Galaxy
2.Sony Ericsson Xperia
3. LG Optimus
Competitors 4.Apple iPhone
The top 10companiesin the mobile market in 2010.

In 2010, HTC became one of the top 10 mobile phone companies (feature and s m a r t p h o n e
i n c l u s i v e ) s e l l i n g 5 . 9 m i l l i o n u n i t s w i t h a m a r k e t s h a r e o f 1 . 8 % ( Gartner
Newsroom, 2010). For the smartphone business alone, HTC has experienced a surge in its
market share by 73.3% in the last year and currently holds a market share of about 4.8%( IDC-
Press Release, 2010).
Mission
To become the leading innovative supplier of mobile information and communication devices by
providing value-added design, world-class manufacturing and logistic and service capabilities.

5 Force

Bargaining Power of customer

HTC customers comprise of retailers, service providers and end-users. Service providers and
retailers have a strong influence on HTC. Their willingness to addHTC products to their portfolios
and their capacity to entice users through phone discounts and multiple service offerings
magnifies the bargaining power of these service providers and retailers(Chip, 2010). The single
end-user influence on HTC is negligible. However, as a collective, these end-users set new trends
–thereby influencing the company – by exercising their buying preferences the company set
new trends thereby influencing by exercising their buying preferences.

Bargaining Power of Suppliers

Phones are normally assembled using components from various suppliers. Then tell actual
property for these components is owned by the OEM`s (in this case,HTC). This structure allows
HTC to quickly switch between different suppliers to meet demand. For example, when HTC
faced supplier problems with its AMOLED displays, it switched quickly to Super LED displays
(Computerbild, 2010). Thus the supplier bargaining power is quite minimal.

HTC and Google are in a symbiotic relationship. HTC is keen to develop itsmarket through
Android phones while Google is able to promote Android andother services like Google Maps
(Winfuture, 2010). Both parties have an interest in developing the Android eco system.

Threat of new entrant

The smartphone market being highly competitive has a significant threat of new entrants. Some
of the potential barriers that could work in HTC’s favour are listed below:

a. Economiecs of scale and capital requirements Due to high manufacturing costs, to reach a
break-even point, significantly high quantities of phones have to be sold in the market..

b. Differentiation Technology patents are a barrier for new entrants (Heise, 2010).Only
Developing developing new technology might can help overcome this barrier.

c. Access to distribution new entrants need to establish relationships with service providers.
Selling products via the Internet is possible but raising public awareness limits selling
opportunities (The Wall Street Journal, 2010).

Threat of substitute products

PDA, tablets, smartphones etc. are based on similar architecture and are converging into the
same segment. So there is a risk that the demand of smartphones can be absorbed by a
substitute such as a web-enabled tablet.

Competitive rivalry within industry

Existing competitors are the biggest challenge in the market. This is the biggest force in play.
Brand development and innovation are key to sustainability (Heise, 2010). This entire analysis
can be summarised using the Spider diagram (see Figure5)Please refer to Figure 5 for the
analysis summary.