- Executive Summary
This company analysis report is a highlight of the major strategic aspects that are being pursued by the company that have gained the company as a successful market player in the industry more so in the smart phone market. The report will also be an inclusion of the examination of HTC corporation's prospects within the market of tablet devices as well as other portable computing devices. The SWOT analysis of HTC is a main resource within the industry for the executives of the company as well as anyone in the corporate structures seeking to gain an improved perception of the business of the company. The analysis will be a utilization of a broad range of primary and secondary sourcing which under analysis will provide a presentation of consistent and formats that are easily accessible. It has been observed that the company adheres to standardized methodologies of research so as to maintain its increased levels of quality data with these attributes being guarantee of the uniqueness of the report. As such the scope of the report is examination and identification of the major information and concerns of HTC Corporation for its needs of business intelligence. A presentation of studies of the company's strengths, limitations as well as objective reporting with provision of analyzed financial rations with a section of the report entailing benchmarking. The report will also comprise of information on the company's business operations, its historical background, crucial products and services as well as the major employees.
- Introduction
HTC also known as High Touch Communication has its mission based in the strengthening of its business relations in design innovations upon original software strategy solutions. The company's vision was to tackle communication and administrative needs in its professional organizations at varied sizes with intuition of internet based platforms and sophistication of its brand initiatives. In respect to the company values there is the pursuit of excellence in all sectors of its operations, commitment to its clients, brand name, related projects and the overall industry. Furthermore, the company honors its dealings with clients and suppliers (Stefan, 565).
HTC was founded by Cher Wang and Peter Chous in 1997 with its initial operations being the manufacturer of notebook computers and later shifting to the design of the first internationally known touch and wireless hand held devices in the next year. The company has established its self as a first producer in the mobile communications market by being the first major touch screen smart phone producer prior to the creation of the initial Microsoft powered phone and the first Microsoft 3G based phone. The company has undergone several historical changes such as the changing of its official name to HTC Corporation from High Tech Computer Corporation. In coming years as of 2010 the company launched its successful HTC Evo 4G phone with later announcements of its plans of smart phone sales in China under a personal brand name in collaboration with China Mobile with an annual sale in the same year of over 23 million handsets which is an increase of 111% as of 2009. The Mobile World Conference of 2011 in conjunction with the GSM Association was privileged to name HTC Corporation as the "Device manufacturer of the year."
This provided a boost to the company as it overtook Nokia as the third largest maker of smart phones in the world with Apple and Samsung lagging behind. An announcement was made in 2011 of the company's plans to purchase VIA technologies with its focus on the S3 Graphics stake which subsequently made the company gain major ownership of S3 (Valentin, 36). HTC Corporation later acquired Dash wire as well as confirmation of plans to strategically partner with Beats Electronics which was followed by a 51 percent share acquisition of Beats.
Research by established industry researchers has shown that the company became the biggest vendor of smart phones in the U.S with a market share of 24 percent which super cedes that of Samsung that stands at 21 percent with Apple at 20 percent and Blackberry subsequently following at a market share percentage of 9. In the initial months of 2012 the company lost most of its market share in the U.S as a result of an increase in competition from industry rivals such as Samsung and Apple with analysts further showing a market share of 9.3 percent as of early 2013 (Chitiris, 276). However, there is still belief within the market that the company’s new product the HTC One will be a great opportunity for the company to gain back market support. Initial quarter results later showed a drop in its year-over-year profits by 98.1 percent which was the first time the company made s small profit with the factors of this drop being a delay in the launch of the HTC One phone. In late 2013 HTC Corporation made the announcement of the sale of its entire 24.8 percent stake in Beats Electronics with expectations of earning a pretax profit of $85 million.
Current business and corporate level at HTC Corporation
Currently HTC is engrossed in presenting its HTC One max smart phone on the market with its new design functions and performance in a larger handset format. The HTC One comes with new features such a new convenience levels as well as acclaimed features such as HTC Blink Feed and HTC Boom Sound that are all enhancements to continual delivery of general performance for its user experience in a larger screen format. Currently the company is under the leadership of Peter Chou as the president and CEO with the late Wang Yung's daughter Cher Wang as the chairwoman (Valentin, 36).
The board director and foundation chairman is HT Cho with the chief financial officer as Hui Ming Cheng. HTC Corporation is divided into major divisions which comprises of the Information Appliance department under the engineering division as well as the wireless mobile department under the engineering division as well with its facilities of high qualification (Chitiris, 276).
There has been acceleration in dramatic strides of the company’s growth since its adoption of the Microsoft platform as its hardware alternative in partnership with the Windows Mobile Operating System on the foundation of the Windows CE mobile platform. HTC has also initiated partnerships with Google as its development partner of in the running the Android mobile operating system for instance on the Nexus One platform. This has been reflected in the overall revenue returns of $2.2 billion as of 2005 which is a representation of an increase of 102% from the previous year which earned the company a top listing among the 100 fastest growing technology companies. HTC has heavily invested in areas of research and Development that accounts for nearly a quarter of all employees. HTC has been in considerations for the creation of its own operating system which would create competition with its industry rivals such as Apple's iOS, Android for Google and Windows Phone for Microsoft (Erhard, 102).
HTC International Strategy
HTC is currently facing a struggle is managing its sales and as such is in the process of reinventing its international strategy in the form of establishment of a new development in products based on innovation as well as setting its international sales to focus on its U.S operations. This was coincided with the launch of the company's new Emerging Devices Unit as it struggles to continually engage in an aggressive re-arrangement of its international strategy with a shift of attention away from the United States which has long been its most solid market. The company has instead re focused its attention on the European market and Asia instead as it tries to compete with industry rivals such as Samsung that has continually grabbed sizeable chunks of the Android based market. Obstacles in chain supply have hindered the potential of the company in launching some of its international flagship products such as Facebook Home with a biased reception (Stefan, 565).
- External Analysis Section
HTC’s general environment with segments and element
HTC Corporation's general environment structure besides is production and service operations also deals with the organizational structures and internal operations. For instance the company's conduct code comprises of established collection of guidelines as a provision to highly ethical standards for all its employees as they conduct their business operations and related activities. All employees’ in the organization with the inclusion of branches and associated subsidiaries are required to adhere to these ethical standards without regard of their graded positioning level and location. The code of conduct comprises of their main categories known as the general moral imperative, vendors and suppliers as well as the aspect of customer relations and interest conflicts (Mithat, 1570). The category of General Moral Imperative needs the commitment of HTC corporation in the provision of safe working environment that is also healthy as well as equal opportunity with the establishment of a behavioral code in the treatment of knowledge concerning the assets or properties of the company and associated information. The vendor or supplier’s aspect and the relations with customers also need the commitment of HTC in sustaining fairness. There is also need for legality and long term relations with vendors and suppliers with benefits to all concerned parties (Chitiris, 276). On the other hand conflict of interest is a description of the behavioral regulations concerning employees in scenarios of interest conflict. From all of this we can gain an understanding of the code being superior to any existing local regulations with the exception of specific mandatory legal guidelines as issued by the existing local governments. It is in such instances where the localized Talent Management department need to submit specified local legal guidelines to the management division of corporate talent so as to place a waiver of certain regulations within the code in the specified location. Otherwise, by violation the HTC Corporation code of conduct in policies that are applicable can led to disciplinary action with the inclusion of termination of employment. It is upon the employees of the company to understand and adhere to the code of conduct within their business operational scope as well as in situations where HTC regulations can be applied. Furthermore it is also required of management to ensure that every employee is fully aware of the content endorsements in relation to the code of conduct as well as review of the documentation that every employee undertakes at least once in a year. In the same instance it is upon all parties concerned to sign with appropriation to the spacing in the documentation.
Porter's five forces analysis of HTC Corporation
Porter's five forces analysis is an evaluation of the five factors that are determinant on the competition within the industry. Porter’s five forces analysis in regards to the smart phone industry entails the five aspects which include the intensity of rivalry that exists which states that smart phones faced depreciate and as such this has a positive outcome on the entity that is an addition to its value (Daphine, 5). Smart phones can be described as highly perishable goods that have high market depreciation with producers having the need to sale as fast as possible with the intention of having a long term negative effect on this entity that is a subtraction from the value of the entity. The other factor is the bargaining power of suppliers that entails the notion that a large number of input substitutes has are reduced leverage of bargaining over the producer. This is as a result of competition among substitutes which has a greater positive effect which will have a short term impact on thee entity as a subtraction from its value with regard of the qualitative factor that leads to a rise in costs. The aspect of threat of substitutes is identified in factors such as the threat posed by third party applications such as Whats sup and Viber as well as internet based calling services such as Skype (Valentin, 36). Customer bargaining power as of porter’s five forces for analysis is observed in the reduced dependency upon distributors in addition to the product being of importance to the customer as well as the considerable customer numbers. The threat of new competition is shown in the strong brand names and their relevance, advancement of required technologies, the economies of scale needs as per the industry as well as barriers to entering the industry that are notably high.
- Internal Analysis Section
HTC value chain area
The financial supply chain for HTC Corporation as a technology company is based on the provision of comprehensive technology within a suite of detected opportunities with focused analysis so as to ensure the most effective reduction of costs in the entire organization (Marilyn, 218). HTC Corporation's value chain is based on several factors such as identification of the performance opportunity at the level of 100 percent. This has been achieved with the use of advanced tools in conjunction with automated software systems that perform 100 percent scanning of all sectors with the chain of financial supply. Its program management entails the management of the full assessment process as well as phases of implementation and closure.
Figure 1: Key focus areas
Source: HTC Value Chain, 2010
This creates a provision for HTC's clients with frequency are detailed in progression with single point contact in well defined accountability in the attainment of positive results. Furthermore, within the value chain we observe the prevention and regulatory compliance where they is facilitation of the company’s real time processes that are a provision that are highly visible across the entire supply chain process of the financial spectrum.
Source: Tabular layout with categorization and time framing of HTC’s Value Chain
- SWOT Analysis
HTC Corporation's strategic road map is based on the leveraging of its strength in form of its products that are the hardware, innovation that is speedy so as to balance the competition within the industry as well as its focus on value addition. As such we see that the aims of the company are to leverage its strength, exploration of undiscovered opportunities, understanding the deviation of the strategic road map so as to manage its risks, identification and development of partnerships with the strategic partners, organizational development that revolves around new cultured philosophy and formulation of a strategy of marketing (Erhard, 102).
Figure 2: Emerging Market Spectrum
Source: Graphical representation of HTC’s emerging market penetration
In the SWOT analysis of HTC Corporation we can identify these factors in the external and internal analysis. Therefore, as a company the strengths on the internal analysis are its leadership as a manufacture of smart phones in the industry, the strength of its research and development structure is open culture stemmed in collaboration and its solid relations with its business partners (Daphine, 5).
Figure 3: Market Status and estimates
Source: HTC Market scope estimations
On the other hand the company's weakness on the basis of internal analysis are its failure of having a self developed operating system for its products, its high costs of manufacturing, the reduced awareness of its brands as well as absence of products and reduction in its pricing category.
- Business Strategies and Recommendations
HTC Corporation can present improved sales figures in its current business strategy if it had executed these strategies prior to its entry into the market of smart phones in a mature level. As such the company requires undertaking timely implementations so as to reduce its reductions in the overall market and sales share with the inclusion of increased mid smart phone products. This should be followed by increased reduction in the costs of its products while gaining strength in terms of presence in the landscape of emerging markets with improvement of its internal organizational communication. HTC of recent has adopted a business strategy of aggressive marketing with guerilla marketing as its main approach to some of its products although this strategy has not been effective with need for a stronger approach as the market is nearly saturated (Mithat, 1570).
HTC Corporation has also understood the need to increasingly roll out more of its mid end products with collaboration of some telecom vendors so as to gain a sizeable market share. As such the company recently unveiled its 4 inch One Mini end based model with plans to roll out more with time although industry analysts have revealed that the company is facing stiff completion in emerging markets such as China. This competition takes the form of Chinese based smart phone vendors such as ZTE Corporation and Huawei Technologies that have hindered the company's access to the vast market of China as well as in other emerging markets.
References
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Mithat, K. Esra, A. Isik, C. "Organizational cultural effects on organizational efficiency in moderation of environmental and management values". Procedia - Social and Behavioral Sciences. 24. 2011:1560-1573.Print.
Chitiris, L. Nancy. John. " The relation between internal and external service quality. "International Journal of Contemporary Hospitality Management .3.2009:275-293
Daphine, M. "SWOT Analysis of HTC Corporation." Market line. 1.2012:1-9.Print.
Valentin, E. "A resource based view analysis of SWOT." Journal of Marketing Theory & Practice.2.2001:35-42. Print.
Marilyn, H. Nixon, J. "Exploration of SWOT Analysis and the way forward."Journal of Strategy and Management .3.2010:215-251.Print.
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