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HTC CORP. IN 2009 Case Solution & Answer

HTC Corp. in 2009 Case Study Solution

Introduction

HTC Corporation (HTC) was previously a high-tech computer company which manufactured smartphones and tablets. The company focuses on design, development, manufacture and sale of smart wearable devices, such as: personal digital assistants (PDAs), smartphones and other relevant components. The company also designed Microsoft mobile platform, including: interface software, operating system, human-machine interface and application software. It markets and sells products under its own brand. The company wearable product portfolio offers customized solutions for telecommunications customers and business partners in Europe, the Americas and Asia.

HTC was founded in May 1997 by Ht Cho and Cher Wang. Cho Engineer (a digital equipment company), is famous because of being immensely focused on attention towards detail and quality; whereas, his partner, Wang Cher, comes from the legendary family Wang family in Taiwan. HTC initial business plan was to manufacture laptops. Because of the expensive cost incurrence of manufacturing laptops; HTC needs to change its strategy and start manufacturing devices like handhelds.

HTC’s biggest breakthrough came in 2000. It was a PDA (Personal Digital Assistant) designed and developed by HTC for Compaq computers. Entrepreneurs loved the iPAQ, the first color PDA to run on the Microsoft Windows CE platform. The success of this device allowed HTC to make its first profit, which got listed on the Taiwanese Stock Exchange, two years later.

While PDAs have become HTC main source of revenue; new product development has begun to have a transition into the mobile telecommunications market, followed by the collaboration with other companies, such as: Qualcomm and Texas Instruments. The partnership between HTC and Microsoft, resulted in XDA: the first Windows smartphone in 2002.

HTC manufacturing fell into two categories in the early 2000s. One is the initial design and manufacture of branded mobile phone companies, and another is the manufacture of telephones for wireless network operators. In 2006, Peter Chou took over HTC from Chou. Zhou Xing Chi (Peter Chou) was the company’s CEO. Peter Chou (Peter Chou) incubated a similar structure in Silicon Valley, then convinced HTC that it should sell under its own name. He believes that without a brand, his business and international growth will be limited.(Kim, 2010).

The SWOT Analysis

Strengths

Excellent technology:

Superior technology helps HTC Corporation to produce custom products and services that meet the customers specifications and needs. It also allows you to enter the market and attract more customers. Solids design and strong manufacturing capability helps in offering high quality products with advanced technology and innovative features.

Strong brand:

The HTC brand has been recognized by end users, which is the main advantage of HTC Corporation. According to a survey conducted by Sanford Bernstein; 42% HTC customers choose this brand for the quality and intuition of the user experience, while only 32% of Samsung consumers choose this brand, indicating that HTC distinctive software has a positive awareness.

Active product innovation:

HTC Corporation has launched a number of major HTC branded products in the international market, with the goal of becoming a leading innovative supplier of mobile communication and information equipment. In fact, HTC Corporation is the first company in the international market to provide an Android mobile device platform through HTC Dream hardware. (sold under the T-Mobile G1 model name).

Partner

HTC has selected appropriate partners (software giants, such as: Microsoft and Orange 02, T-Mobile, Vodafone, Cingular, Verizon, Sprint and NTT Do Co Mo and other major mobile operators) to collaborate and join market with lower costs and risk. HTC Corporation has expanded its technology and market power through partnerships.

Large investments in product development:

HTC Corporation has launched three of its latest mobile phones – the HTC Snap, HTC Touch Diamond2 and HTC Touch Pro2 – to expand its current 11 devices in the Australian market. New technologies in these popular products are designed for user-friendly touch, better Windows Mobile integration, Internet Push technology, the introduction of dual microphones and speakers, and the latest features in HTC Corporation Inner Circle, which allow the users of OS to carry at the top of your email inbox, groups selected in the following locations make it easier to do business on the go.

Consumer loyalty:

Customers can choose to stay loyal to HTC Corporation. The company has a strong position in China, in the field of medium-sized telephony. More importantly, it will be able to maintain its profit margin as it focuses more on mid- and high-end mobile phones and ignores the more competitive and less competitive low-end market.

Operating company:

Operators can buy HTC products on their own and promote sales, allowing HTC to increase its sales, increase its market share and reduce its promotional costs. ODM and supplier companies brought higher profit margins (20%) while the industry averaged 5%, which saved costs and mitigated the possibilities of risks faced while entering the market.

Product strategy:

ODM and its suppliers produced high profit margins of up to 20%, while the industry average profit margin was around 5% in the mid-2000s.

HTC offers phones that are compatible with Android and Microsoft Windows. This is how they can attract enthusiastic android customers as well as those who join the Microsoft Windows platform. On the other hand; Microsoft paid a price to promote the Windows Phone.

Weaknesses

Lack of cheap products:

In addition to not being able to deliver enough accessories to the market; HTC also has a major weakness in ignoring the mid-priced mobile phone market. Mid-priced laptops continued to grow. Quoted by Peter Chou: “Although the product sold well, there are still two issues. The first is the initial supply shortage, and the second is that our mid-range phones were weak last year.”

Short product life cycle:

The smartphone products cycle is fast, which is becoming  obsolete rapidly.

Lack of own operating system:

High production cost………………………………..

 

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