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Htc Analysis

Strategic Marketing Study Case : HTC Summary 1- Introduction1 2 - Analysis..2 2.1-Description of HTC..2 2.2-Industry analysis..2 2.3 -PEST Analysis.4 2.3.1-Political.4 2.3.2 -Economical.4 2.3.3 Social5 2.3.4Technological...6 3 - HTC MarketingStrategy....6 3.1-SWOtAnalysis6 3.1.1Strengths..6 3.1.2Weakness.....7 4 - Recomandations..9 1. Introduction HTC is a company that was launched in 1997 in Taiwan. This company emerged in the smartphone market with big success and broke a lot of industry sales records. This company is a good example of a rapid rise to success because of its high technological expertise and innovative ideas.

At the start, HTC was not well known in the smartphone and tablets industry. However, HTC innovative design and state of the art technologies generated big interest. According to some primary research, customers who owned HTC phone did not know a lot about HTC as a company. That is to say, HTC brand awareness was not matching its technological and innovative approach. In fact, its brand awareness was very low compare to its competitors in the smartphone industry. Therefore, it is clear that a company of the magnitude of HTC need to do more in terms of brand awareness in order to sustain and increase its market share in such a highly competitive market. To achieve this, HTC needs to review its marketing strategy. According to the latest statistics in the smartphone market, Samsung is the world leader, followed by Apple with its famous Iphone 4S and HTC. With a 20% increase in its market share in the smartphone market in the last four years as well as a peak of 46% in the end of 2011, HTC has many opportunities to further enhance its market position in the current market environment and the company performance in the UK. This work provides an in-depth analysis of the smartphone market, its environment and examines various factors that could impact on HTC market position. It also evaluates the smartphone market which includes big players such as Apple, Blackberry (RIM) and Nokia that makes it a highly competitive environment to operate and succeed in. Finally, this report will propose some recommendations and fundamental marketing principles to be considered by HTC i.e. Targeting, Segmentation, and Positioning. The report also illustrate how these recommendations and marketing principles should be applied by HTC in order to enhance its overall marketing strategy as well as improve its brand awareness. The proposed strategy in this report can help HTC pursue its primary objective which is to become market leader in the smartphone market. 2. Analysis 2.1 Description of HTC The main business of HTC Corporation is the production, development and manufacturing of electronic device for mobile phones. The development of the company has been driven by Mr Cher WANG and the co-founders and Board Director Mr CHO. The company was one of the first to develop new products using Microsoft Operating System (OS) in the mobile phone, and Windows CE. After that, the company decided to develop its own operating system which was the first personal handheld personal date assistant with Windows CE. Although, this was initially very successful, the high cost forced HTC to review their strategy and turn into using Google Android operating system to lower its production costs. The company anticipated how the mobile phone

market are growing and decided to collaborate with the largest companies in Europe such as Orange, T-Mobile and O2. The company revolutionised the mobile phone industry by combining video, personal assistant features and entertainment in one device in high resolution with many connectivity device. HTC integrated the mobile phone market with global and very competitive offers. Another important step of the company is its global launch in 2007 which made the company more stable and operating worldwide. This fact helped HTC to build notoriety by the realisation of the new interface HTC Sense in the end of 2009, and differentiated itself with a very creative advertising concept. This has also contributed to HTC becoming one of the market leaders in the mobile phone industry. It earned the Manufacturer of the year Award in 2010 by T 3 Magazine and the brand of the year Award in 2011 in the Mobile World Congress. The Company is still progressing by designing and developing new user interface, new generation of software applications and developing a new operating system. Last year, HTC developed 16 new mobile phones and 15 of them are using Android operator System. 3.2 Industry analysis: The majority of the HTC smartphones are using the Android system and some old models are still using Windows OS. According to Gartner, Android Operating systems are the second most used by users with 25% after Symbian which was used by Nokia with 37%. The Android market is projected to rise to 29% by 2014. Figure 1. Shares of 2010 Smartphone Users by Operating Systems Market description: Because smartphones are multimedia tools, the process of manufacturing requires different industries suppliers of software and hardware solutions. According to (Emarketer, 2011), the sales of the smartphones will increase by up to 63% in the next five years and will reach almost 102 million in sales volume by 2015. Roberta Cozza, principal research analyst at Gartner provides the following important fact: "Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers' and manufacturers' promotions," According to Gertner, Android Phone represented 50% of the smartphone sales in Q1 2012 and this is double of what Apple sold. A, which is 56 per cent of the smartphone market. (Jai pas compris

hadi? Try to rephrase it) Samsung is the number one in the market followed by Nokia then Apple at the third position. The last Kantar World Panel analysis showed that Android offers are more appreciated than the IPhone 4S. The Report focused on twelve weeks period that ended in April 2012. It clearly shows that Android is experiencing a large growth with doubling its presence in some European countries: Spain 72%, Italy 49% and Germany 62%. Apple is still number two in the US and UK. This analysis show that the UK saw a peak in the demand of the last HTC one X which is on the Top Ten of the mobile phones sales. The analysis also claims that RIMs (BlackBerry) hold only 3% of the smartphone 4250.php 2.3 PEST Analysis Every country has a specific market atmosphere. To be efficient in a new international market, a company must analyse all the different opportunities and threats. For that, it is important to analyse the environment to know what are the risks and the opportunities. The best method to achieve this evaluation is the PEST Politics, Economic, Social, Technological analysis. 2.3.1 Political Taiwan is considered as low political risk country and this is a potential for investors and business trades. This also generates confidence for the foreign employees which is help to improve the work performance. An Important other point is the smartphone technology is quickly growing and improving. For this reason, the Mobile phone companies must cooperate with governments and ensure to develop the telecom infrastructure actively. It is sometime difficult to operate in some countries such as China or India or some Middle East Counties which refuse to allow the improvement of the Mobile and internet network. For example, the conflict that happened in Saudia Arabia and the Emirates with the smartphone company RIM (Blackberry). In 2010, Saudi Arabia decided to ban the Blackberry from the market because the Phone uses encrypted data through Blackberry Messenger and cannot be monitored. For security reasons, the Saudi Arabia and the Emirates decided to stop the sales of Blackberry. 2.3.2 Economical The mobile phone market is very sensitive and can be affected in positive or negative economic situation. market. http://www.gsmarena.com/kantar_android_market_share_doubles_in_some_eu_countries-news-

As we can see in the Figure 1, the mobile phone market knew a bad period when it dropped dramatically in 2008. For this reason it is important to adapt the product to the market. Another important point is that all these different operators in the market create competitiveness and they always seek to offer better price which is benefits consumers. Figure 1: Global Celullar Phone market value 2004-2008. Data monitor 2008 Ernst & Young has published one report which clearly illustrates Taiwans Ministry of Finance efforts to reduce taxations in the country to 17% in order to attract more foreign investments 2.3.3 Social Taiwan is a low cost hand work. The Salary is not high for skilled worker in the electronics and high tech market. It is also important to mention that Taiwanese workers are considered to be highly effective. One important point is the consumers in the world have a negative opinion about Made in Taiwan products; it is often perceived to be of bad quality and cheap. This reputations is due to the 90s when the Taiwanese Companies were copying all the electronics device with low quality and cheap prices offering to the worldwide market. An important social factor is the actual fashion identity of the Smartphone. According to a market analysis of the mobile phones users conducted by Fortune Tech, 2009 (see figure 2), the smartphone user tend to be male, aged between 30 and 45, college educated and wealthy. This information will help the companies to produce a phone which respond to the needs of the consumer. Figure 3: Market analysis of mobile and Smartphone users (Fortune Tech, 2009) 2.3.4 Technological The mobile phone Market is highly competitive and fast developing technologies, especially replacement technology such as the smart phone took the place of the classic mobile phone. In this market every Company are improving their technologies to be the best in the market. This industry are growing in an environment where they must to innovate to satisfy the new consumer needs, and in certain case create a new needs for the consumer and change their buying mechanism. 3. HTC Marketing Strategy:

To understand the HTC marketing strategy, we must evaluate the company marketing mix and the characteristics with affect the company. 3.1 SWOT Analysis 3.1.1 Strengths HTC is cooperating with Google Android Operating System which is the leader in the market according to Kantar World panel. The growth of its market share up to 50%. The company show according to its research that HTC and Samsung are leading the Android handset market sales, holding v86 % of share between the two companies, and the HTc proved with the launch of the new HTC oneX which is already into the TOP TEN of the best seller phone in the UK in the last 12 weeks. The comapny has build a succefull and recognized brand name with growing and attracting consumers from everywere. HTC collaborated with Google to launch their own smarphone with Google Android Operating System. Long experience in the networking: HTC has a long experience with the network suppliers. The company knew how to customize mobile phones according to the network suppliers. Touch Technology: The company is the first which developped the Touch Technology, even before Iphone.HTC hold the technology of Touch Technology, which is on of the most important point in the smartphone market. Innovation: HTC is innovating every time . The company is actually famous for its Research and Developement investissement ( the HTC R&D/Sales rate In 2009 is 6%, compared to 3.4% of Apple, 3.2% of Samsung, 11.7% of Nokia.) Recently, HTC made a partenership with Beat Electronics and acquired 51 per cent of the shares. Overall, the most important point we have to remember are: * HTC is the Leader maker of PDA According to a survey conducted in 2011 by COMSCORE DATA MINE, they was 19,7 million in the 5EU (France, Germany, spain, UK and Italy) consumers using smartphone runing under Google Android Operating Sysyem.The figure 4 show that the largest owner was from UK with 6.3 Million,

then France with 4.5 and Germany with 4million. In this survey, HTC had the highest marketshare with 34.6 % of the Android Smartphone. Weakness: HTC is Brand: HTC is new brand comparring to another brand such as Iphone or Samsung. It is clear that is diificult for a new brand to have a place in a competitive market. Size of company: HTC is small comapany in the mobile market (revenue of 2008: 4651million) , compared to the other players, such Nokia(50710 million) , Apple(32479 million), Samsung. ( 121294 million).It is David against Goliath fight. Its clear that HTC have a limited ressouces comparing to the competitors. High cost of production of an HTC phone is higher comparing to the competitors. This incoveniant led the comapany to have a small margin. This really affecte the developpement of the Taiwanees company. This affect the research and developent , with a high cost of manufacture which increase the cost of the product. Recomandations: HTC has a positive reputation in term of technology but must review some points at the strategy which the company use. Through our market analysis, it is clear that The Taiwaneese company has a good market size, strong potential but with some difficulties to take a place in the market. Trough the last decade, HTC growed very fast, from the 7th place to the 4th and this in less then 5 years. Even if it is positive point, the company have to review the marketing strategy. * Build a strong image brand to have a visibility in the market: HTC try to have the same identity of Apple, which is a mistake. Apple use and effective strategy which give them a strong identity, make the Iphone popular and highly demanded compering with HTC. The company should build his own identity which make them different and not like alternative of Iphone. * The Taiwanees company should review the cost of production which is realtivelly high, and reverberate on the final cost of the phone in the market and minimise the margin. Comparing to Nokia, HTC phones are more expensive in the market. This fact have a repercussions in the differents market such as India or China where Nokia is more affordable than HTC. It is clear that those market offer a high cash inflow after a good adverting campagn.

* HTC Should benefits of opportunities to take some market shares. As exemple: Blackberry found a bug in one serie and the company asked to change all phones in the market. It was a good opportunity for HTC to boost the advertising to take some customers of Blackberry. * The comapany should adverise more in order to differentate itself and improve its brand identity. * HTC should offer more phone models in order to diversify the customers and enlarge the market share