Organisational Strategy

Table of Contents
Introduction................................................................................................................................2

The context of AsusTeK Inc. and its current strategies.............................................................3

AsusTeK Inc...........................................................................................................................3

Current strategies and process of strategy development of AsusTeK Computer Inc.............4

Rationale behind choosing the context of AsusTeK and strategic models............................5

Application of relevant strategic models to AsusTeK company................................................6

SWOT analysis.......................................................................................................................6

Porter's generic strategies.......................................................................................................8

Bowman's strategy clock......................................................................................................10

Stakeholder analysis.............................................................................................................12

Theories applied in practice and recommendation for future strategies for AsusTeK Inc......14

Application of theories for AsusTeK Inc.............................................................................14

Recommendation for strategic development of AsusTeK Inc.............................................14

Future strategies for AsusTeK Inc........................................................................................15

Conclusion................................................................................................................................16

References................................................................................................................................17

Appendix..................................................................................................................................19

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Introduction
Strategy is like weapons for fighting against the obstacles of a company. A company is
affected by what strategies it has taken to progress in the future. In this report, the context and
strategy development process of AsusTek company is discussed. Then various models for
developing the strategies for AsusTeK company are analysed. The core competencies and
possible threats of the company also discussed in this report. Finally, the theories are applied
in the context of AsusTek company and some future strategies are discussed in the last
portion of this report.

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The context of AsusTeK Inc. and its current strategies
AsusTeK Inc.
AsusTeK Inc. is a renowned multinational computer and computer components producer
company. The company is headquartered in Taiwan. It was established in 1989 (Lee, and
Fang-Ping, ASUSTek Computer Inc, 2016). AsusTeK Inc. Is the world's sixth largest
computer producer company as of October 2020.

It is a public limited company. It started its journey with manufacturing computer products.
But the company gradually increased its business units. Now it has a portfolio of three types
of products. The company produces computers like desktop computer and laptop computers,
computer components like motherboards, RAM, Graphics cards etc. and smartphones. At
present, the company dominates the global computer market (Tykhonenko, 2018). It has
generated around $351.33 billion as turnover and about $53.5 billion as gross profit in 2019.
Moreover, the company has earned around $13.0 billon as net income in 2019. AsusTeK has
market capital of $187.9 billion and EPS of 1.80% in recent time. Furthermore, it has a strong
employee base. The number of employees is 5,831 according to the annual report of 2019.

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Current strategies and process of strategy development of AsusTeK Inc.
The vision of AsusTeK company is to provide integrated 3C (Computer, Communication and
Consumer electronics) solution to its customers which will simplify the life of its customers.
(Lee, and Fang-Ping, ASUSTek Computer Inc., 2016). The mission of the company is to help
people to understand their full potential by providing IT innovation. AsusTeK company has
four strategies for its business. The strategies are discussed below.

 Grow a balanced business: The company is trying to make more balanced business
which will generate greater return and help to produce customers' need oriented
products.
 Deliver more products of value: AsusTek aims to improve their products including
PC line, laptop line, smartphone line and motherboard line so that it can deliver more
value to its customers through its products (Tykhonenko, 2018). For this reason, the
company separated its R&D sector.
 Simplify the operating model: The company always tries to find good business
activities which will return great amount for its shareholders. That’s why it always
reduces complexity in its business activities and transforms resources to more
valuable activities.

Strategy development process: AsusTek company develops various strategies at various

time periods. It tries to develop good strategies for sustaining and gaining competitive
advantages. So, the company follows some processes for making its strategies. The processes
are:

Determination of strategic position: The management of AsusTek company where the

company wants to go and how the company will get there (Adobor, 2019). For this reason,
the management analyses the internal and external environment and resources of the
company using various models like SWOT analysis.

Prioritising objectives: The management prioritise the objectives of the company when
developing strategies so that the strategies don’t create any conflict with the objectives of the
company.

Developing Plan: The management of AsusTek company then develops a plan for its
strategies about how the company can implement the strategies and how the company can

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manage those strategies (Malhotra, Majchrzak, and Niemiec, 2017). At this phase, the
company examines the strategies.

Implement strategies and manage the plan: Finally, the management execute and
implement the strategies. Then it checks the progress of the company by managing the plan.
In this case, the company uses KPI dashboard for regulating all the progresses of the
company after implementing the strategies.

Review and evaluate the strategies: The management of AsusTeK then analyses the results
of the company after implementing the strategies (Köseoglu, et al., 2020). Monitoring also
helps the management to remain aware of the changes of the market and thus to change the
mission and vision of AsusTeK company.

Rationale behind choosing the context of AsusTeK and strategic models

AsusTeK is a multinational computer device and component producer company and has a lot
of reputation. But the company has faced problems with its EPS and Dividends in recent
years. Though the company earns good revenues, it generates negative rates in net income,
EPS and Dividend. So, it is very necessary for the company to change its strategies for
improving its current conditions and gaining the leadership in the computer, computer
component and smartphone industry again. That’s why the context of AsusTek company is
chosen. On the other hand, some strategic models and frameworks including SWOT analysis
(Neis, Pereira, and Maccari, 2017) Porter's generic strategies, Bowman's strategy clock and
Stakeholder analysis are selected for the company to analyse its current market, the strategies
and steps of rivals, internal and external environment and resources of the company.

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Application of relevant strategic models to AsusTeK company
There are various strategic models and frameworks for helping a company to gain
competitive advantages over its competitors. AsusTeK follows some models for making
strategic decisions. The models which help the company formulating strategies are discussed
below.

SWOT analysis
The term SWOT consists of strength, weakness, opportunity and threat. This model is very
helpful for AsusTeK company for analysing its internal resources and environments which
will assist the company to implement and maintain the strategies (Elavarasan, et al., 2020).
The way the company uses the model is discussed below.

Strength: This is the first phase of SWOT analysis. In this phase, AsusTeK determines the
strengths which are the core competencies of the company. The strengths of AsusTeK are the
portfolio of various products like PC, laptops, computer components and smartphones, the
expansion of 150 countries around the world, separate R&D sector for helping the company
understand customers' demand and produce innovative products (Phadermrod, Crowder, and
Wills, 2019). Moreover, the company has global reputation and familiarity for its various
products. These are the core competencies of AsusTeK company.

Weakness: This is the phase of determining the weak points of AsusTeK company. The
company has some weakness including allegations of using harmful ingredients in computer
component products, allegations of producing and selling corrupted computers and unusual
firing of employees for the declination of company growth rate.

Opportunity: The need for computers and computer components is growing rapidly as
everything is depending on the IT industry. At the same time, smartphones are also becoming
essential for everyday life. Furthermore, AsusTek is a well-known company. So, it has the
capacity to grab the market with the intention to help the customers explore their full
potential. (Makadok, Burton, and Barney, 2018). The company also separated its R&D sector
for innovating new customers’ need-based products.

Threats: There are also some threats for AsusTek company. As it is a multinational
company, it faces problems with its products in different countries for the government
regulations of those countries. The government regulates and imposes restrictions in the IT
related products very cautiously because those products are directly connected with the health

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and security of its citizens. On the other hand, the computer and computer components
industries are very complex. Sometimes, they cost AsusTeK very much while inventing and
manufacturing products. Moreover, the industries are very competitive as there are many
competitors.

Benefits of SWOT analysis: There are various benefits of SWOT analysis. AsusTeK can
determine the core competencies which help it becoming unique in the market, weak points
which hinders its progress. On the other hand, AsusTeK can identify its rivals and their
strategies, government regulations etc. which may alter the whole progress (Elavarasan, et al.,
2020). Finally, SWOT analysis helps the company to find the internal and external
opportunities and to find the right strategies for gaining competitive advantages.

Limitations of SWOT analysis: There are some limitations of SWOT analysis which
obstructs AsusTeK to analyse actual conditions of the market and environment. SWOT
analysis produces many ideas for AsusTeK company like introducing new products,
increasing product line etc. but the model doesn’t offer best ideas (Leskaj, 2017). On the
other hand, it doesn’t provide any alternative decisions for AsusTeK company.

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Porter's generic strategies
Porter's generic strategies are combination of three different strategies. It helps AsusTeK
company to make most important decisions like cost and differentiation decisions. The
AsusTeK follows the strategies are depicted below.

Cost leadership strategy: The company always tries to reduce its various costs including
raw material costs, production costs and distribution costs. It is very much prudent about its
suppliers and selects those suppliers who deliver raw materials timely and at lower cost. The
company has shortened its production process by cutting unnecessary processing (Islami,
Mustafa, and Latkovikj, 2020). Besides, it has selected good distribution network which will
deliver its products timely and at lower cost to customers. These all assists the company to
reduce its overall costs and reduce prices while gaining sufficient profit.

Differentiation strategy: AsusTeK has differentiated its products and marketing strategies.
It has various products which are offered to different types of customers like PC for
professionals, laptops for students and gamers and smartphones for keeping people updated.
AsusTeK also has various unique marketing strategies such as it operates computer fairs at
various time periods. Moreover, it always provides good quality products which delivers
good value to the customers.

Focus strategy: AsusTeK company also uses focus strategy for its business. In this case, the
company focuses on different customer segments such as high configuration laptops for
gamers and professionals, medium configuration laptops for students and normal users.
Moreover, it has differentiated its products for various needs of customers (Islami, Mustafa,
and Latkovikj, 2020). AsusTeK targets these niche segments and produce low-cost products
while maintaining good quality.

Benefits of Porter’s generic strategies: AsusTeK company enjoys various benefits by using
Porter’s generic strategies. The company can identify specific customers for producing
products by focusing their needs. Again the company can identify where it uses huge amount
of money and how it can reduce the costs. By reducing costs, AsusTeK can easily reduce the
prices of various products. Meanwhile, the company generates good amount of profit. Thus it
gains competitive advantages.

Limitations of Porter’s generic strategies: Porter’s generic strategies have limitations

which deviates AsusTeK company from its planning. The strategies suggest reducing the

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costs of the company. But the strategies have no certain direction about how the company can
reduce its costs. So, the AsusTeK faces problem whether it should reduce the costs of
advertising or change the suppliers. The company cannot dilute the relationship with its
suppliers (Demir, Wennberg, and McKelvie, 2017). On the other hand, AsusTeK company
faces another problem about how it can differentiate its products because it faces difficulties
to analyse various segments of customers.

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Bowman's strategy clock
This strategy is also useful for AsusTeK Company because the company can position its
products in the market based on price and perceived value. The strategies of Bowman’s
strategy clock are discussed below.

Figure 1: Bowman’s strategic clock

Source: Polyanin, and Dokukina, 2016

Low price and low value-added: AsusTeK sells its products like mid-range laptops and
smartphones at low price because there are lots of competitors already prevailing in the
market and the products are also perceived low value-added to the customers (Trigeorgis, and
Reuer, 2017).

Low price: AsusTeK produces and sells some of its products including various components
like motherboards, RAM, monitors etc. at low prices because there are many substitutes of
these products.

Hybrid: The company offers products like graphics cards, servers and projectors which are
combination of lower prices and differentiation strategy. These products are perceived to be
high value-added products to the consumers.

Differentiation: AsusTeK company offers computer components like monitors for different
segments of customers including professional users and normal users (Polyanin, and

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Dokukina, 2016). Furthermore, the company offers smartphones for various segments of
customers. This is how the company differentiate its various products.

Focused differentiation: The company offers some products which have both higher prices
and higher perceived value. The company offers products like notebooks which are perceived
to be high value to consumers.

Risky high margin: AsusTeK offers some products which have higher prices but lower
perceived value. That’s why they are very risky products for the company. Some of those
products are multimedia projectors, workstations etc. which have lower value but higher
prices.

Monopoly pricing: The company enjoys monopoly pricing in some of its products. The
products are notebooks and flagship smartphones. These products are very popular in the
market and there are very few substitutes of these products (Trigeorgis, and Reuer, 2017).
That’s why the company offers higher prices.

Loss of market share: AsusTeK company was fined for producing harmful products and for
not having security for malwares. These products caused the company to loss its market
share.

Benefits of Bowman’s strategy clock: There are various benefits of using Bowman’s
strategy clock for determining the positioning of the products in the market. AsusTeK can
identify its high value-added products and low value-added products by using this strategy.
This helps the company to offer rational prices for its products (Bondarenko, et al., 2017).
Besides, the company can determine which products to differentiate and which to charge
higher prices for enjoying monopoly market. Thus, AsusTeK can make its strategic plan for
gaining competitive advantages in the market.

Limitations of Bowman’s strategy clock: Bowman’s strategy clock doesn’t specify which
products are high perceived value and which are low value. That’s why AsusTeK faces
problems while determining its strategic planning and pricing. On the other hand, the strategy
doesn’t clearly define how the company can differentiate its various products (Esfahani,
Mosadeghrad, and Akbarisari, 2018). Moreover, monopoly pricing strategy is not very well-
defined. So, the company can’t fully depend on this strategy only.

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Stakeholder analysis
This is a systematic analysis for determining whose interest would be affected by the
strategies which AsusTeK company has planned to implement. The way AsusTeK follows
this strategy is discussed below.

Identification of stakeholders: The stakeholders of AsusTeK company are management,

HRM, low-level employees, customers, shareholders, suppliers, government, consultants,
financial organisations etc. (Afridi, 2018). These stakeholders are involved with the activities
of the company and have influence on the decisions of the company.

Prioritising stakeholders: All stakeholders are important for the existence of AsusTeK
company. But there are some stakeholders who have direct impact on the company. In this
case, interest grid helps the company prioritise the stakeholders based on their influence.

Figure 1: Stakeholder’s interest grid

Source: Afridi, 2018

 High power and high interest: The stakeholders of AsusTeK of this group are
customers, shareholders and financial organisations (Bogers, et al., 2019). They have
most influence on the decisions and activities of the company. So, they should be
managed closely.
 High power and low interest: In this group, the company have stakeholders like
government and suppliers who have high power. The policies of the government like
Brexit issue can affect the decisions of AsusTeK company. Again, the government
can file case against the company at anytime for its misdeeds (Afridi, 2018). On the

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 other hand, suppliers can cancel the relationship with the company for its
misbehaviour.
 Low power and high interest: In this case, the employees and management are
stakeholders of AsusTeK company who have high interest on the company. The
decisions of the company can hamper their interest easily. But they have low power
for the company. So, they should be informed always.
 Low power and low interest: These are those stakeholders who provide AsusTeK
company consultancy services. They have both power and interest in the company.
However, they should be monitored often.

Understand the stakeholders: At this point, AsusTeK determines how the stakeholders are
affected by its decisions and what motivates the stakeholders to support the company (Neves
Correia, 2019). In this case, the company analyses their opinions and makes solution for
arising problems.

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Theories applied in practice and recommendation for future
strategies for AsusTeK Inc.
Application of theories for AsusTeK Inc.
The theories like SWOT analysis, Porter’s generic strategies, Bowman’s strategy clock and
stakeholder analysis are very useful for AsusTeK company. The company uses these theories
for various reasons (Makadok, Burton, and Barney, 2018). When AsusTeK wants to analyse
the internal and external environment, opportunity and resources, it uses SWOT analysis. The
company finds its core competencies and threats through using SWOT analysis. Besides,
AsusTeK company uses Porter’s generic strategies when it wants to find out how the
company can reduce the production costs and prices and differentiate the products for various
customer segments. That’s why, it uses differentiation and cost strategies for finding specific
niches and produce products for customers of that niche. However, AsusTeK uses Bowman’s
strategy clock for identifying how its products are positioned in the market and how the
company can charge prices according to the perceived value of its products. So, the company
considers various strategies for determining how the products are providing value to the
customers (Trigeorgis, and Reuer, 2017). Finally, AsusTeK company uses stakeholder
analysis for identifying how and which group of stakeholders are affected by the decisions of
the company. However, AsusTeK uses all of these theories for determining the good
strategies for the company because all of the theories have some limitations.

Recommendation for strategic development of AsusTeK Inc.

AsusTeK company develops its strategy by following some steps. The steps are determining
strategic position, prioritising objectives, developing plans, implementing plan and reviewing
and evaluating the plan. The company generates good revenue but it can’t generate good net
profit and EPS in recent years. So, it should fix some problems in its steps to develop
strategy. First, the company should analyse its internal resources effectively. It should
analyse all the environmental factors which influence the company effectively (Polyanin, and
Dokukina, 2016). Second, the company fails to achieve its objectives as it couldn’t generate
good net profit and EPS. So, it should reduce its costs and make the strategies align with its
objectives. Finally, AsusTeK Inc. should analyse the market effectively and produce goods
according to the needs of customers.

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Future strategies for AsusTeK Inc.
Restructured strategy: The needs for desktops computers, laptop computers and
smartphones are growing rapidly. So, the company should restructure its strategies for
keeping pace with the current market (Leskaj, 2017). AsusTeK should develop new policies
and ethics for its business so that everyone and everything remain under control.

Expansion of global business: The company has now three major business units. The
computer business and computer component business are generating good returns. But
smartphone business is lagging behind. So, the company should spend more time and money
in the smartphone business. However, AsusTeK Inc. should focus on expanding and
diversifying its business activities (Bogers, et al., 2019). The company should introduce new
machines and computer products that solve the customers’ problems.

Offering value-added products: The company should focus on delivery good value to its
products. It should offer the products which customers think valuable for solving their
problems. The separated R&D sector of AsusTeK Inc. should innovative customers'
requirement oriented products.

Sustainable computer products: The computer business unit including laptops and desktops
is the most profit generating unit of the company (Demir, Wennberg, and McKelvie, 2017).
So, the company should develop those products that are sustainable in this dynamic market.

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Conclusion
The strategic decisions of AsusTeK Inc. affects it whole business activities. So, the company
follows some processes for determining and implementing its various strategic decisions. At
the same time, the company analyses various resources and core competencies and related
threats for implementing its strategies. The company also considers the cost leadership and
differentiation strategies and stakeholders interest while formulating its business strategies.
The company generates good revenue from its three business units. But it can’t meet the
overall company objectives and goals. So, AsusTeK Inc. should focus on improving its
business strategies so that it can achieve its expected goals and objectives.

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References
Adobor, H., 2019. Opening up strategy formulation: Benefits, risks, and some
suggestions. Business Horizons, 62(3), pp.383-393.

Afridi, A.H., 2018. Stakeholders analysis for serendipitous recommenders system in learning
environments. Procedia computer science, 130, pp.222-230.

Bogers, M., Chesbrough, H., Heaton, S. and Teece, D.J., 2019. Strategic management of open
innovation: A dynamic capabilities perspective. California Management Review, 62(1),
pp.77-94.

Bondarenko, T.G., Isaeva, E.A., Orekhov, S.A. and Soltakhanov, A.U., 2017. Optimization
of the company strategic management system in the context of economic instability.

Demir, R., Wennberg, K. and McKelvie, A., 2017. The strategic management of high-growth
firms: A review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.

Elavarasan, R.M., Afridhis, S., Vijayaraghavan, R.R., Subramaniam, U. and Nurunnabi, M.,
2020. SWOT analysis: A framework for comprehensive evaluation of drivers and barriers for
renewable energy development in significant countries. Energy Reports, 6, pp.1838-1864.

Esfahani, P., Mosadeghrad, A.M. and Akbarisari, A., 2018. The success of strategic planning
in health care organizations of Iran. International journal of health care quality assurance.

Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal, 6(1), p.3.

Köseoglu, M.A., Altin, M., Chan, E. and Aladag, O.F., 2020. What are the key success
factors for strategy formulation and implementation? Perspectives of managers in the hotel
industry. International Journal of Hospitality Management, 89, p.102574.

Lee, Y.C. and Fang-Ping, L.I.N., ASUSTek Computer Inc, 2016. Electronic device with
graphical user interface. U.S. Patent Application 29/477,096.

Leskaj, E., 2017. The challenges faced by the strategic management of public
organizations. Revista» Administratie si Management Public «(RAMP), (29), pp.151-161.

Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory
contributions in strategic management. Strategic Management Journal, 39(6), pp.1530-1545.

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Malhotra, A., Majchrzak, A. and Niemiec, R.M., 2017. Using public crowds for open strategy
formulation: mitigating the risks of knowledge gaps. Long Range Planning, 50(3), pp.397-
410.

Neis, D.F., Pereira, M.F. and Maccari, E.A., 2017. Strategic planning process and
organizational structure: Impacts, confluence and similarities. BBR. Brazilian Business
Review, 14(5), pp.479-492.

Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis
based SWOT analysis. International Journal of Information Management, 44, pp.194-203.

Polyanin, A.V. and Dokukina, I.A., 2016. Implementation of strategic management in

agricultural organizations: problems and prospects. Russian Journal of Agricultural and
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Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
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Tykhonenko, D., 2018. Digital Promotion of ASUS Smartphones in the Ukrainian Market.

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 Appendix
Reflective statement of learning experience

The module and assignment of criticizing the strategies of AsusTeK Inc. help me gather a lot
of experiences. The module was focused on the development and analysis of organisational
strategy. I learned how to analyse the environment and core competencies of AsusTeK
company. I learned the way AsusTeK Inc. sets its mission and vision statements and goals
and objectives. The module helped me learn various models and theories which a company
uses for formulating strategies. Besides, I learned the use of those models and theories in the
context of business. The module also helped me learn how to analyse the stakeholders of a
company and how stakeholders influence the overall decisions of a company like AsusTeK
Inc. I learned how to position the products of a company like AsusTeK in the market using
Bowman’s strategy clock. At same time, I learned how to use Porter’s generic strategies for
determining niches for producing goods for the customers of that niche. I also learned how a
company can differentiate its business for attracting more customers and can reduce its costs
to offer products at lower price to grab the customers’ attention.

Moreover, I was able to learn the processes that a company like AsusTeK Inc. follows to
develop its business strategies. This is how the module and assignments helped me learn
these in my personal life. Moreover, the assignment and module also helped gain professional
experiences. After completing this assignment, I am able to generate strategic plans for a
company to gain competitive advantages. I am also able to use various tools like SWOT
analysis, Porter’s generic strategies, Bowman’s strategy clock and Stakeholder analysis for
analysing the resources and threats of a company, for formulating product positioning
strategies, for making differentiation and cost leadership strategies for a company and for
analysing the influence of stakeholders of a company.

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