Essay on Htc Case Analysis

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Case Analysis
--HTC 2009

Class: Competitive Marketing Strategy

Student Name: Fisher Yu

1. Evaluate HTC’s performance to date. What are its competitive advantages and vulnerabilities? Be sure to elaborate on HTC and its competitors’ positioning on performance and cost.

Financial performance of HTC compared with its main competitors
For this part, we will be using ROA (return on assets), ROE (return on equity), and profit margin to evaluate HTC’s abilities to generate profits and to control its cost with comparison to other manufacturers.
With reference to the financial ratios of HTC in Exhibit 1a, over five years (2004 to 2008), its average net profit margin was 18.8%, return on assets 34.2%, and return on equity
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HTC will face fewer barriers when its new products entering Chinese market since they are a Taiwan based company. * HTC has a diverse customer base (no one client held more than 10% of HTC’s business), which means that HTC is more risk resistant. * HTC’s average product life cycle is approximately 3 quarters, which is about half of the industry average. This will give HTC more flexibility to react on market responses.
* Revenue generated from selling Microsoft mobile devices may be affected by the downward trend of the popularity of the Microsoft mobile operating system. * Giving up on the ODM business means that they lose a less-risky business that can gain them continuous cash flow. Now the growth of the company completely depends on the sales of their own branded mobile devices. * The fast shift of the mobile device industry and the fierce competition (especially from Samsung) may force a company out of business in a few years. * Ability to negotiate with operators in the US may affect its development in the US. This may limit its growth in the future given that the US is the No.1 smartphone market all over the world. * Lawsuits from Apple over patents may further affect HTC extending its business in the US market. * Its so-called innovative or revolutionary products do not gain the company as much credits as Samsung or Apple does. The market will test its ability to
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