Market Position of the HTC Corporation - Case Study Example

Business Study Case Table of Contents Table of Contents 2 Thesis ment 3 Summary of the Case 3 Porter’s Five Forces Analysis 4 Playout of ActionsAfter the Case 6 Financial Figures 8 8 Works Cited 10 Thesis Statement The paper will emphasize on the analysis as well as summarization of a case study in relation to HTC Corporation. A Porter’s Five Forces analysis will be devised with the intention of understanding the competiveness as well as market position of the company. Moreover, the paper will also include financial information of the company in comparison to its major competitors. Summary of the Case HTC Corporation is the second largest manufacturers of handsets in Asia based in Taiwan. The company had a record sale in the year 2011 for providing quality smartphones with Android i.e. Google Incorporation’s operating system. Moreover, the company had been recognized to be among the top five manufacturers of smartphone worldwide. The company had faced many challenges from other smartphone manufacturing companies which include Nokia, Samsung as well as Apple among others (Yoffie, Alcacer and Kim, “HTC Corp. in 2012”). From the provided case, it has been recognized that Mr. Peter Chou is determined to be a protagonist who is the CEO of HTC. Mr. Chou planned with the top management team to offer better smartphone products in the market with the intention of improving the financial performance as well as competitiveness of the company. In this regard, the CEO is required to devise plans as well as strategies for differentiating its products with the intention of providing better competition to its business rivals in the market. The decisions to be made in this regard were the major concern for the CEO. HTC commenced the business of manufacturing products through contracts since the year 2000 as well as was segregated into two major segments which include original design manufacturer (ODM) for branded companies providing handset as well as developing phones which are based on wireless network operators. In this regard, HTC performed in an efficient as well as successful manner. Mr. Chou had eliminated the bureaucratic structure of the company with the objective of assisting employees of the company to operate their operations in a more collaborative manner. Later on, Mr. Chou had planned to manufacture handsets with the brand name of the company in order to grow its business on international perspective. The only concern was with respect to financial as well as marketing aspects. In this context, the company had planned to develop innovative and quality products for providing better competitive products in the various market segments. The company had collaborated with Google Android as well as with Microsoft to compete in the market effectively with its innovative products. However, the company faced intense competitions from its competitors for providing products with updated Android operating system. It was due to this reason that the operating margin of the company fell down to almost 15 percent which denoted a ten percentage point drop since the year 2007 (Yoffie, Alcacer and Kim, “HTC Corp. in 2012”). Porter’s Five Forces Analysis A Porter’s five forces analysis is devised for HTC with the intention of determining the competitiveness as well as intensity along with the position of the company in the market segments. The five forces are as follows: Supplier Power The bargaining power of suppliers is determined to be low as HTC develops its own hardware. Moreover, the company possesses a limited number of suppliers as well as could acquire other third party suppliers. Therefore, the supplier power is considered to be low for HTC (Kleinmann, Chen, Jaderstorm, Pinkerton and ONiel 9-10). Buyer Power The bargaining power of consumers is considered to be high as the consumers are provided with a variety of products from different mobile manufacturing companies. Moreover, the different products of manufacturers are almost identical due to which consumers can switch from one product to another (Kleinmann, Chen, Jaderstorm, Pinkerton and ONiel 9-10). Competitive Rivalry There are many smartphone companies providing products in the market segments. In this respect, there is an intense competition in the market segments which also intensifies rivalry among companies (Kleinmann, Chen, Jaderstorm, Pinkerton and ONiel 9-10). Threat of New Entrants There is a low threat of new entrants for HTC as huge amount of capital is required for performing the research and development (R&D) activities by companies in order to innovate their products. Moreover, products are differentiated with the intention to create a better brand awareness among the consumers in the markets. Furthermore, new entrants will face intense competition to survive in those market segments where branded products are provided (Kleinmann, Chen, Jaderstorm, Pinkerton and ONiel 9-10). Threat of Substitutes In different global market segments, there are various products which are identical as well as provide the same functioning operations which can be derived from smartphones. The various products are related to MP3 player, digital cameras as well as gaming consoles among others. In this regard, it has been observed that the demand for smartphones had risen by a greater extent as these smartphones provide all the functions in one device (Kleinmann, Chen, Jaderstorm, Pinkerton and ONiel 9-10). Therefore, the threat of substitute is low with regard for HTC’s offered products especially smartphones. Porter’s five forces analysis of HTC signifies that the market condition for smartphone products is favorable. Moreover, the company is required to provide innovative products with enhanced features in order to acquire greater market share as well as improve profitability. Playout of Actions After the Case HTC has developed innovative as well as quality products in accordance with the requirements of the various consumers and market segments. The smartphones of HTC are based on Google Android as well as Microsoft operating system. Moreover, these smartphones are provided with enriched features as well as quality. It has been observed that the sales of HTC products had increased in Europe, Asia and America in the year 2011. The company is determined to be a leader with respect to design as well as innovativeness. Furthermore, the profitability of the company has been raised due to innovative as well as elegant designs of its products. The total revenue for HTC by the end of fourth quarter of 2012 have been accounted to NT$ 60 billion and NT$ 1 billion had been accounted for the operating profit (HTC Corporation, “HTC Reports 2012 Fourth-quarter Results”). Financial Figures Financial Performance of HTC Sources: (HTC Corporation, “2011 HTC Annual Report”) Financial Performnace of Samsung Source: (SAMSUNG, “Facts & Figures”) Stock Information Source: (HTC Corporation, “HTC Investors”) Works Cited HTC Corporation. HTC Reports 2012 Fourth-quarter Results, 2013. Web. 12 Feb. 2013. HTC Corporation. 2011 HTC Annual Report, 2012. Web. 12 Feb. 2013. HTC Corporation. HTC Investors, 2012. Web. 12 Feb. 2013. Kleinmann, Tobias, Xin Chen, Ben Jaderstrom, Jolie Pinkerton, Stephanie ONeil. HTC Marketing Plan. Munich: GRIN Verlag, 2012. Print. SAMSUNG. Facts & Figures, 2012. Web. 12 Feb. 2013. Yoffie, David B., Juan Alcacer and Renee Kim. “HTC Corp. in 2012.” Harvard Business School (2012): 1-25. Print. Read More