Analyzing The Business Operations And Strategies Of HTC Corp In An Essay.

Analyze the business operations, strategies, methods of the HTC Corp.

Generally, this research paper is based on the case study in the context of HTC Corp. In addition to this, this research study is developed and conducted in order to analyze the business operations, strategies, methods of the company. Along with this, this research paper also provides a brief discussion about the case study by analyzing the situation of the company in the market. On the other hand, this paper also provides discussion on the problems and issues faced by HTC in the global business environment. Additionally, this paper also address significant question that what are the major impact of different issues faced on the overall functioning of the company. Moreover, this paper also provides specific recommendations and suggestions in order to overcome such serious issues or challenges that are affecting the overall growth and success of the company in the global business environment. At the same time, it should also be noted down that, this research paper is more valuable, effective and comprehensive for the readers, researchers, and students in analyzing the business situation of a company. With the help of this paper, they would be able to solve real life case studies at the workplace in an effective and proper manner.

Moreover, this research paper has more or wide scope because it deals with a lot of specific and significant research questions, aims and objectives. Additionally, this research essay is conducted through evaluating secondary sources such as articles, books and online sources. Simply, it can be said that, in order to fulfill the research aims and objectives associated with this research paper, secondary source of information are used to collect the significant information about the research paper in an effective and more significant manner. In the same way, independent research is considered for the fulfillment of associated objectives and aims of this research paper in an effective and appropriate manner.

This paper evaluates the case study of HTC Corporation in 2009 by Yoffie & Kim (2010). The main aim of this paper is to evaluate the current position of HTC Corporation and identified their weak areas. This paper also recommends proposed solution to problem faced by HTC Corporation. In addition to this, it should also be noted down that, this research case study is more important and valuable in understanding and analyzing the overall business situation of the HTC in the global market. Moreover, this paper also provides a brief discussion about the issues faced by the HTC in the market and strategies to overcome such issues in an effective and more significant manner.

Statement of the Problem

The main problem statement of this paper is:

“High price, high expenses on R&D and low brand value impacted on the financial performance and position of HTC Corporation in the global market”.

Each and every research paper or study is conducted or prepared for the fulfillment of specific objectives and aims so that associated and desired outcomes can be get effectively.  In the same manner, this research paper is also characterized with the different objectives and aims that will be fulfilled during the study of this research paper effectively. For instance, the main purpose of this research paper is evaluating the business of HTC Corp in the Global Business environment. On the other hand, the main aim of this paper is to analyze the problem faced by HTC in the international market. The key objectives in context this paper is discussed as below:

• To access the business situation of HTC Corp
• To analyze the main problem or issues faced by HTC
• To provide a brief discussion about the case study
• To examine the financial statements of the company in analyzing the financial health of HTC
• To provide specific recommendation to solve the business issue

These objectives would be achieved during the study of this research paper in order to get the desired outcomes in the context of this paper

The following are the main structure of this report:

• Introduction
• Case Brief/background of study define the issues/problem
• Analysis of problems
• Analysis and Findings
• Propose solution of the problems

Hence, the following structure would be used to accomplish the valid outcomes in the context of this research study.

On the basis of case study, the main problem faced by the HTC Corporation is declined the profit and sales of the company in recent time period. In the same way, it can be said that, these are the main issues or problems that have a negative impact on the overall organizational growth and success of HTC in the market. On the basis of the brief study of the case the following are the main problems identified related to HTC Corporation:

• High expenses on R&D
• High price of the products in compare to competitors
• Weal brand value or lesser known brand name in the market
• Target niche segment of market (Casey, Bann, & Doyle, 2010).
• No experience of inventory management
• Weakness in marketing segment
• Low product lifecycle (around 3 quarters)
• No economic of scale (Distefano, & Me, 2008).
• No prior experience in Marketing, supply chain and inventory management
• Less focus on developing and creating the brand value in the global market
• Not utilization of available resources
• No focus on own APP Store
• Risks associated with the warranty of the product
• Use of average PLC (Distefano, Me, & Pace, 2010).
• Less focus on Asian Market
• High cost of products
• Lack of innovative and specific marketing strategies
• Less customer oriented products

These are the main problems identified that are faced by HTC corporation in the recent time that impacts its performance and position in the competitive market. In addition to this, these issues are also affecting the company from the strategic point of view that means these are also affecting the overall business operations of the company negatively so it is recommended that, the company would should focus on using a wide range of strategies and methods in order to reduce such problems in an effective and more systematic manner (Hoog & Strzempka, 2011). Hence, all these are the main issues or problem faced by the HTC that are discussed and analyzed in the context of this research paper effectively to fulfill the desired outcomes in an effective and proper manner.

On the basis of the above defined issues or problems, this section describes the problem statement and analyzes the case study with the use of different theories, concepts or models. On the basis of the analysis of financial statement provided of HTC of last five years, it can be identified that the company cost of product is high that impacted on its net profit. It means the high cost of product is affecting the financial health of the company in the market so it is essential for the company to reduce the cost in order to improve market share profitability. In addition to this, the company would need to provide and offer high quality products by redcing the cost of product in an effective and proper manner. On the other hand, the below table indicates HTC cost of sales portion of revenue is much higher (66-81%) in the last five years that indicates the company manufacturing cost or product cost is higher (Mahajan, Dahiya, & Sanghvi, 2013).

Along with this, it is also found that, the high cost of product or manufacturing also indicates the net income portion on revenue is lower that impacts on the financial performance of the company. The below table indicates the HTC revenue is increased in 2008 but the net income is declined that situation is financial not good of the company point of view. All these alteration or change is one due to high cost of the product of the company. In the same manner, the company should try to maintain its high cost of products by using different strategies and methodologies effectively. Apart from this, it is also analyzed and found that, the high cost of production and decline in the profit indicates the company internal weakness means it needs to control its expenses to enhance profit otherwise it face issued in the future (Said, Yousif, & Humaid, 2011).

On the basis of the above table, it can be stated that HTC has been spend around 5-6% of its revenue on R&D (research & development) expenses. Apart from this, it is also analyzed that, the company has spent more in their R&D expenses that reduce the net income or profit of the business. It indicates the high R&D expenses is the weakness of the HTC and it need to solve this problem. In the same manner, it can be recommended that, the company should reduce R&D expenses at least 3% of the revenue to enhance its net profit or income and to provide the sufficient return of its investors or shareholders. With the help of this practice or strategy, HTC would be able to reduce the cost of the product and there would be increment in the organizational profitability (Solomon, Rudolph, Tittel, Broom, & Barrett, 2011).

Structure of the Report

In addition, on the basis of case study information, the below graph indicates the HTC sales by regions in 2008 that represent the company 36% sales come from America, 39.4% from Europe and 24.6 from Asia region. In the same way, it indicates HTC’s has mainly focused on the American and European market but less focused on the Asian region market that is the weakness of the company. On the other hand, it is also observed and analyzed that, in recent times, China and India is the world most two populated nations and both have more than 70% population of young age group people (around 15-45 age group). Along with this, it is also important to know that, less focus on Asian region or Indian or Chinese market is impacted on the sales and market share of the HTC that contributed to reduce its market share in the global market. Hence, on the basis of this, it can be said that, the company should also focus on Asian market. It means it should also produce its product in the Chinese as well as Asian market in order to overcome the issues associated with the high and additional costs (Roll, 2005).

Moreover, the below table indicates the HTC market share has continuously increased but it is much lower than major competitors. HTC current market share of 6.5% that is much lower than Nokia (39.3%), RIM (20.8%) and Apple (17.1%). It indicates HTC sales are lower than other major competitors due to low market share that represents the weakness in its product price, quality or features and marketing tactics. The company should need to focus on its internal weakness to grab the market and improve its position in the competitive market. The below graph is shown that the HTC has faced high competition in the global market and needed to more efforts to maintain or improve its position in the competitive market (Gong, 2013).

The company should need some changes in operations, strategies and practices to improve its position in the global competitive market otherwise it loss their market share and position in the industry. In the same way, it can be said that, the company should also adopt and use a lot of innovative and significant strategies and methods in order to achieve competitive advantages in the market in an effective and more systematic manner. Along with this, it is also essential and important to the company that it should also focus on using advertising and marketing strategies in order to attract more and more customers for its product. This would assist the company in improving the current market share and brand reputation at the global level (Sull, 2005).

Case Brief/ Background of Study Define the Issues/Problem

On the basis of identifies and describes several problems that are faced by HTC Corporate the main problem statement is:

Overall, it is analyzed that, “High price, high expenses on R&D and low brand value impacted on the financial performance and position of HTC Corporation in the global market”.

HTC was founded in May 1997 by HT Cho and Cher Wang that is located in Taoyuan Country, Taiwan. Chou’s team succeeded in developing the world’s first pocket-size PC with Microsoft in 1998.  In this time, HTC’s main notebook business struggled with high production costs, technical glitches, and brand recognition lacking. In 1999, the company had faced losses of $18 million, so that the company exit the notebook business and focus on handheld devices instead (Srinivaas, 2014).  HTC opened in two distinct segments that are ODM business and mobile operator business. An ODM business, the company manufactured smartphones for branded handset companies while its mobile operators business, it designed phone for service providers such as T-Mobile or Vodafone. The mobile phone operator business provided better margins of the company and helped to differentiate HTC from other ODM business (Sheehan, 2011).

The prominence of smartphones rose after the commercialization of advanced 3G wireless network in the 2000s. The 3G networks were supporting the high speed internet access or wireless data that enhanced demand of the smartphones. After the global recession in 2009, mobile internet penetration would more than double to nearly 3% in 2012from 13% in 2007. Moreover, due to this the smartphones were expected to grow and the overall cell phone market shrank (shown in the below table or graph). It indicates the smartphones would taken one third position in the world’s mobile phone market (Segall, 2012).

Chou officially started the brand strategy in 2007 with HTC phones available in the Europe and Asian region for sale. The company has acquisition of Doped ($15 million) that is a well known brand in Taiwan to enter in Asia market. The company faced challenged in the US market and started selling brand phone in China. In addition to this, it is also found that, the overall position of the company is not strong due to lack of operational and business strategies and operations (Schneiders, 2010). For case, the company does not focus on improving the brand reputation in the global market that affecting the growth and success of the company in the market. So it is essential to the company it should adopt effective marketing and business strategies by considering the organizational long term objectives in an effective and more proper manner. In addition to this, it is also found and analyze that, there are several factors or forces that are also affecting the company negatively. So the company should develop and create effective plans in order to overcome such issues (Lewis, 2011).

Statement of the Problem

Moreover, it is also analyzed that, the high cost of the product is one of the major factors that also force the company to increase the price of the products. So, company should try to reduce the cost of product by using innovative and effective strategies and ways within the organizations in an effective and more systematic manner. Along with this, the high R&D cost is also affecting the growth and success of the company. In the same manner, the company should focus on reducing this cost by using a lot of strategies. In addition to this, the company does not have own apps so it is also essential for the company to develop own apps store in order to reduce a wide range of cost (Katie, 2013). All these steps would be helpful for the company for the total success and increasing the brand reputation in the local as well as global market. At the same time, it is also found that, the company uses a high price strategy so it should focus on low cost pricing methods to attract and retain its customers. Moreover, the company should also target all the markets by considering the needs of the customers in an effective and proper manner. Additionally, it is also found and analyze that the company is also facing the problem in its inventory and supply chain management in the same way, it should take effective methods to address such issues. Moreover, the company is not utilizing its own resources and less focus on developing the reputation. Due to this, it is also important to the company it should adopt marketing strategies and utilize the resources. This would help the company in reducing various kinds of costs (Hielkema, 2012).

Additionally, it is also found that, in the current time, the profitability, level of revenues, and sales are decreasing day by day so the company should also adopt the steps and process to enhance the financial position in the market. In the same way, the company would be able to improve its overall functioning and profitability in the market that help the company in attracting more and more customers for the products and services. In addition to this, it is also found that, the company does not focus on innovation so the company should also focus on the innovative products by considering the innovative and specific technologies in an effective and more systematic manner (Davies, 2011).

HTC Financial Information

As it is analyzed that, several kinds of issues and problems faced by HTC in the market that influenced the productivity, accountability, marketability, goodwill, reputation, brand image, level of revenues and customer satisfaction negatively. In addition to this, it can be said that, in order to remove such issues and problems, the company HTC should focus on the innovative and specific strategies, methods, best practices and ways. For example, it is essential for the company to promote band image by using core competencies and business strategies in an effective and more significant manner (Ungson & Wong, 2008). Along with this, it can also be recommended that, the company should also focus on using different branding strategies and methodologies in order to overcome the challenges effectively. In addition to this, the company should also focus on investing the huge among on the development of marketing mix and inventory management. It is because this strategy would help the company in improving and enhancing the marketing strategies, tactics and plan of the company properly. On the other hand, it is also important to HTC that it should also adopt the strategies those are associated with the inventory management. This strategy would help the company in reducing the challenges in the context of supply chain management and inventory management. Moreover, it can also be recommended that, the company should also focus and emphasize on the usage of common components.  On the other hand, it can also be said that, the physical specifications should be less in complexity and uniqueness (Smith, 2011).

Apart from this, the company should also use planned obsolescence. It means there would be need of shorter PLC. Moreover, the company should also establish, develop and create effective and innovative manufacturing facility at its location in order to reduce total cost. For case, this would also assist the company in achieving the competitive advantages by removing different kinds of operational costs in an effective and more significant manner. Along with this, the company should also invest huge amount in the Research and development activities. It clearly indicates that, HTC should also focus on developing innovative technologies, infrastructure and innovative process in order to improve market share and enhance level of profit effectively (Shah, 2013).

Moreover, it is also suggested that, HTC should focus and emphasize on developing, building and providing customized products for the operators. Because by offering customized products, the company would be able to develop its brand image in the market that is important to increase the profit, market share and level of revenue. So, the company should develop and create the products by considering the needs, wants and desires of customers. On the other hand, it can also be said that, the company should also provide its services to the end user without any issues and should promote open source of technologies over the other available technologies. At the same time, it is also found and analyzed that,  the company should also adopt and use effective strategies and ways to maintain and develop the strong relationships between the two major competitors in the market such as Microsoft and Google (Pride & Ferrell, 2014).

Additionally the company HTC has not own Apps store so it should try to developing own App store like apple and Microsoft. Moreover, it is also found that, HTC mainly focus on the prosumer market so it should have segmented its market accordingly to its product. Furthermore, it would also be beneficial for the company that it should focus on increasing the average product life cycle to at least five quarter and reduce the warranty risks by providing more innovative products and services. At the same time, by analyzing the business situation of the company, it can also be said that, the company should focus on the innovation through the collaboration (Mckeown, 2012). It is because this practice would help the company in bringing more innovative products for the end customers. So it is important to the company it should focus on collaboration along with the innovation. In addition to this, the company should also introduce and focus on touch technology that would help the company in encouraging more and more customer for the company’s product in an effective and systematic manner. This strategy would also help the company in increasing the level of customer satisfaction, and improving the brand image not only in the local market but also in the global market (Ireland, Hoskisson, & Hitt, 2011).

On the other hand, it can also be said that, the company HTC should also introduced to produce pocket PC with full color display in order to make its product more customer oriented and innovative. At the same time, it can also be recommended that, the company should also use and select right strategy that transferring itself from a successful ODM to a successful mobile company with brand. In addition to this, it can also be said that, HTC should also introduce and use a wide range of marketing, advertising, and strategic strategies in order to run business successfully (Hitt, Ireland, & Hoskisson, 2014). These strategies would help the company in achieving the organizational strategic and core goals of the company in an effective and proper manner. Hence, on the basis of above discussion, it can be said that, the company should focus on innovation and new technology in the introduction of new product and services. Moreover, this research case study has a wide scope for further study or dissertation because it deals with a wide range of research questions, aims and objectives. In contrast, the main limitations of the case study are not lack of research problem, primary information, less use of statistical data, lack of interview questions, nor proper research methodology and research, lack of supportive data information, lack of defined research methodology, sample size not mentioned (Boone & Kurtz, 2011).

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