HTC-Market Analysis Assignment Group 4 Final
HTC-Market Analysis Assignment Group 4 Final
Strategy
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08 / 12 / 2010
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Group 4
Market Analysis
and Growth
Strategy
Market Analysis
and Growth
StrategyMarket
Analysis and
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Growth
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Group 4
08 / 12 / 2010
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Number of Pages:
Word Count:
2010
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December8 Submission Deadline:
2010/2011
Date/Year of Module:
IB9040
Module Code:
Market Analysis
Module Title:
Date Sent:
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Assignment Cover Sheet
-199390-464820
Table of Contents
TOC \o "1-2"
1.
2. Executive summary
HTC Corporation is a one of the leading manufacturers of sSmartphones. The
growth over the past year. HTC’s partnership with Google to develop the Android
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Today, the company is known for its innovation and research. However, the HTC
brand still has a weak image compared to its competitors like Apple,and
Blackberry, Nokia, Samsung and Sony. HTC is now focusing on developing its
brand image to potentially grow its market share. This report reviews the current
marketing strategy for HTC Android phones. It analyses the marketing mix for
HTC and reviews the areas of weaknesses and opportunities to build upon.
Finally, the report provides some recommendations for the future strategy for
HTC. :
iPphone. This will mean developing a new market niche, gaining first
demographicenterprise solutions.
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This future strategy would be essential for long-term sustainability for the
company.Target segments
pplications development
ASecurity enhancement
Brand awareness
1. Introduction
main focus is to push the boundaries of innovation in mobile phones (HTC, 2010).
HTC has a wide footprint in America, Europe and Asia-Pacific with its
headquarters in Taoyuan, Taiwan (HTC, 2010). At the end of 2009, HTC had
of USD 4.4,379.6 million billion during the financial year ending December 2009
(FY2009), a decrease of 5.2% over 2008 (Datamonitor, 2009). See Appendix 1 for
In Q2 2010, HTC became one of the top 10 mobile phone companies (feature and
sSmartphone inclusive) selling 5.9 million units with a market share of 1.8%
(Gartner Newsroom, 2010a). Figure 1 shows the top 10 companies in the mobile
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Figure 1: HTC took the eighth position for mobile devices sold in Q2 2010 (Gartner
Newsroom, 2010a).
For the sSmartphone 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%
(OEM) called High Tech Computers. Soon after, HTC repositioned itself as a PDA
nameown elf as a prominent consumer brand for phones rather than as a phone
manufacturer for other mobile brands. Since 2002, after first launching the
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products globally (HTC, 2010). Today, the HTC brand is famous recognised for its
innovation in sSmartphones.
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Today, under its own HTC brand, the company has launched many sSmartphones
using Android or Windows Mobile operating systems. The main focus for this
report will be the HTC Android phone business. The main reason for this
(b, 2010NewsroomGartnerSee Figure 2). This has been projected to rise to over
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Market environment for sSmartphones
In order to understand the factors affecting this industry, a PESTLE analysis has
• Political fFactors
Economic fFactors
a country. As seen from Figure 3, the growth rate for mobile phones business
demand for sSmartphones will fall significantly as people would either keep using
Figure 3: Global mobile phones market value: $ billion, 2004-2008 (Datamonitor, 2009)
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Social fFactors
analysis, sSmartphone users tend to be male, aged 30-45, college educated and
wealthy.
Figure SEQ Figure \* ARABIC 44: Market analysis of mobile and sSmartphone users
(Fortune Tech, 2009)
Technological fFactors
In this industry, innovation is the key for differentiation. Many companies will
the open source operating system (OS), has created a surge in applications
• Legal fFactors
Regulatory bodies within countries might restrict certain product usage creating
obstacles for market growth. But at the same time, a country with strong patent
protection law is healthy for market competition. Countries like China face
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difficulties in enforcing such laws making it difficulty for top brands to grow their
market.
• Environmental fFactors
“green” conscious and opt for brands that are perceived as being more
environmentally friendly.
the company characteristics, the product marketing mix and the external forces
affecting HTC.
• Strengths
development. With about one quarter of its staff employed in research and
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development activities, HTC has several state of the art innovation centres.
(Datamonitor, 2009).
Android OS has proved to attract many developers away from the iPhone due to
• Weaknesses
Despite the global advertising campaign it launched in 2009, HTC still suffers
from a weak brand image in comparison to its competitors (e.g. Nokia, Apple,
Being an open source, the Android applications domain is currently very loosely
(Datamonitor, 2009).
Opportunities
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The professional/corporate users’ segment remains elusive for many
• Threats
Like every player in the marketplace, HTC is not shielded from innovative strides
the capacity to upset the market balance in favour of any of the competitors. A
• Product
Some key features for HTC Android phones are listed below.
b. 2010)
2010Spoonauer, 2010)
HTC has been very successful in gauging the kind of features customers would
exampleusing, using HTC smart software, users can trace the location of their
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HTC phones using a computer. Also, users can stop the phone ringing by simply
• Place
The current focus for HTC phone sales is primarily in America followed by Europe
• Promotion
HTC‘s products are promoted through retailers and service providers. The strong
relationship between HTC and service providers impinges on the way its products
are displayed and advertised. Therefore HTC sSmartphones enjoy high visibility
Mass promotion is conducted via the Internet (e.g. HTC website, Social
• Price
HTC Android phones are priced around USD 179 for the most popular models.
HTC is therefore in a similar pricing bracket with competitors like Motorola (USD
199) and Samsung (USD 179). However HTC Android phones are much cheaper
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20102010Spoonauer,). The pricing for phones is further made competitive
providers and retailers have a strong influence on HTC. Their willingness to add
HTC 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
Phones are normally assembled using components from various suppliers. The
intellectual 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
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displays, it switched quickly to Super LED displays (Computerbild, 2010). Thus
HTC and Google are in a symbiotic relationship. HTC is keen to develop its
market through Android phones while Google is able to promote Android and
other services like Google Maps (Winfuture, 2010). Both parties have an interest
new entrants. Some of the potential barriers that could work in HTC’s favour are
listed below.
b. Differentiation
Technology patents are a barrier for new entrants (Heise, 2010). Only
Developing developing new technology might can help overcome this barrier.
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c. Access to distribution
products via the Internet is possible but raising public awareness limits selling
PDA, tablets, mobile phones etc. are based on similar architecture and are
converging into the same segment. So there is a risk that the demand of
Existing competitors are the biggest challenge in the market. This is the biggest
(Heise, 2010).
This entire analysis can be summarised using the Spider diagram (see Figure
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Figure SEQ Figure \* ARABIC 55: Porter's five forces diagram for HTC Android smartphones
martphones
SMarketing strategy for future growthThis chapter explores the best opportunities for
future growth.
maintained as the core focus for HTC’s future strategy. By launching the first 4G
Android phone in key markets like the US, HTC has become a pioneers and has a
will help the company compete with key players in the market. By patenting
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itsinnovative phone interfaces, HTC will also be able to create a successful
differential advantage, which will help the company further build on its image as
The Google partnership has helped HTC improve its market visibility. Using this
to its advantage, HTC has launched several sSmartphones under its own brand.
with service providers, HTC will be able to further develop its brand awareness.
HTC has already designated 2010 as its ‘Brand Year’ (Taipei Times, 2010). In the
next few years, HTC should concretise its brand further by developing a service-
Android version below 2.2 have been found to have security flaws (PhoneArena,
2010). HTC should focus on developing a security layer to sit alongside the
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1.3. Applications development
One of the key selling points for sSmartphone’s is its ability to enhance the user
‘Apps for Everything’ through its Apps Store on the iTunes platform. HTC has
realised the importance of this key service. Peter Chou, CEO of HTC recently
mentioned that it was no longer enough for HTC phones to be ‘skin-deep’ but it
was necessary to become ‘bone-deep’ (FT –HTC App Store, 2010). HTC should
therefore focus on developing its own unique array of applications, which will
enhance the user experience and build brand loyalty.for its customers. This will
also help HTC to develop a brand loyalty for its product offerings in the long run.
Target segments
Pro
pg 47)
Adapted from Dibb (for HTCCompetitive Strategies: Figure 6Based on the analysis,
several strategies have been identified. The key ones are highlighted in yellow in Figure
66.
countriesDiversification - tablets
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aggressively grow its market in areas like India and Latin America by developing
relationships with local service providers, promoting its products through various
media channels and offering excellent customer service. This will ensure
Figure 6: Competitive Strategies for HTC (Dibb, S. Simkin, L. Pride, W.M. and Ferrell,
O.C., 2006, p.47)
Currently only 22% of Generation -Y users have a smartphone (refer to Figure 4).
Furthermore, t
market sector, however it would mean entering into direct competition with
can give. Therefore, open source enterprise applications must be seen as part of
a wider movement
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The concept of the Blue Ocean Strategy (Chan Kim, W. and Mauborgne, R., (2005), Kim
and Mauborgne (2005), would suggest that value maximisation comes from being the first to
market in a new space with no existing competition. Therefore, developing a new market in the young
demographic, by positioning HTC as providing 'an affordable iPphone' should be the priority
discussed in Section 4.1.3, HTC can develop strong secure enterprise solutions
developmentusers from this demographic. engage . HTC should also make use of
for reaching Generation Y 'digital natives' will demand a strategy that capitalises on social media
networks (Weber, L. 2007).See Weber, L (2007) Marketing to the social web: how
digital customer communities build your business, John Wiley & Sons, New York
Responses
These will vary according to the territory. In the UK and EU, the recommendation will be to
leading online youth community for nightclub and music listings. The equivalents in other key
target markets (e.g. Brazil and India) will need to be researched and utilisedromote via
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social media channels that are dominant for that territory, e.g. Orkut in Brazilin
order to p.
Finally, entering the enterprise market would mean advancing into a highly significant market
sector,sector; however it would mean entering into direct competition with market-leaders
Blackberry. Open source software has generally failed to compete in the enterprise sector due to lack
of professional technical support services for applications. Therefore, open source enterprise
applications must be seen as part of a wider movement within the Android development community,
smartphone business.
would help the company compete in the market and grow its market sharerand
order to sustain this growth it is essential to d HTC growth over the past year.
Appendix
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total revenues.
(Datamonitor, 2010)
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(Phandroid, 2009)
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Appendix 3.Price comparison table on sSmartphones
(ibrii, 2010)
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Appendix 4.HYPERLINK
"http://www.eurodroid.com/2010/03/vodafone-htc-
magic-has-been-discontinued-in-the-uk/"HTC magic
(Eurodroid, 2009)
Appendix 5.HYPERLINK
"http://www.eurodroid.com/2010/03/vodafone-htc-
magic-has-been-discontinued-in-the-uk/"HTC
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(Ubergizmo, 2010)
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Appendix 6.HYPERLINK
"http://www.eurodroid.com/2010/03/vodafone-htc-
magic-has-been-discontinued-in-the-uk/"HTC online
promotionsHTC online promotions
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(Everyday.com.my, 2010)
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