HTC Corporation (formerly known as High Tech Computer Corp.) is a Taiwan-based smartphone manufacturing company engaged in design, development, manufacturing and sales of mobile computers, personal digital assistant phones, touch phones and smart phones and offers its products in Europe, Asia pacific, North and Latin America, Africa and Middle East (Bloomberg, 2010). The company has gained a reputation in terms of innovation related to the features of their products as well as their design
The Evolution of HTC
HTC was founded in 1997 by three business people and technology enthusiasts Cher Wang, HT Cho and Peter Chou. The founders took the roles of Chairwoman, Director of Board and Chairman of HTC Foundation, and President and CEO respectively. At the initial period of business HTC was mainly involved in partnerships with companies like Compaq, Dell and HP designing and building PDAs (personal digital assistants) for them. The most innovative and acclaimed products of these brands HTC was closely involved in include Compaq iPAQ, Treo 650, O2 XDA, and Orange SPV (Hi, we’re HTC, 2010)
The company was introduced to the public as an independent brand starting from June 2006, and manufactured its first own brand product HTC Touch, which is claimed to be by the company a first finger-friendly touch-screen smartphone in June 2007.
Today HTC boasts with its popular products as Touch Diamond, Hero, HD2, HD Legend, and Desire, and has been ranked by Business Week as the second best performing technology company in Asia in 2007, and third place in Business Week Global listing in 2006.
Internal and External Factors that Affected the Evolution of HTC
There are set of internal and external factors that have affected to the evolution of HTC.
One of the main internal factors that have affected the evolution of HTC does relate to the primary objective of the company as a business entity which is profit maximisation. Specifically, after successfully working in partnerships with famous companies like Compaq, Dell and HP designing and manufacturing smartphones and PDA’s for them, it became evident for strategic level managers at HTC, that far greater rate of profitability can be achieved for the company if the company starts to manufacture products as a separate brand. Therefore, starting from 2006 HTC was introduced to the public as a separate brand.
Moreover, Perlmutter (1969), mentions following seven internal factors that are likely to affect business enterprise during its evolution period: complexity of the organisation, authority/decision making, evaluation and control, rewards and punishments/incentives, communication/ information flow, identification, perpetuation (recruitment, staffing, development). Birkinshaw and Hood (1998), insist that managerial implications are the single most important internal factor that affects the evolution of a business. All of the internal factors mentioned by authors above contributed to the way HTC Corporation did evolve from a local smartphone designing and manufacturing company to be one of the main players in the industry in global arena.
There is also range of external factors that had impact on evolution process of HTC in one way or the other. The biggest element of external environment that effected business in many ways is the forces of globalisation (Paul, 2006). And, HTC owes primarily to this force for its evolution the way the company did from the vary start of the business until present.
From the very start of their functioning in Taiwan the main customers of HTC were international companies that were based abroad including Compaq, Dell and HP. Such a practice was only enabled by the globalisation processes that were already beginning to transform business practices in 1990’s.
Moreover, the globalisation was one of the biggest factors that enabled the decision of the company to start operating as an individual brand in global scale starting from 2006, due to the fact that only because of globalisation HTC could reach its customers in a global marketplace.
Silberglitt (2006) emphasises the huge impact technological development had on the development of the businesses by pointing to the fact that technological development reduced the cost of ding business significantly, through better manufacturing, communication and information management processes.
The external impact of technology development on the evolution of HTC is even greater compared to many other industries due to the fact that the products HTC offers to the marketplace are the results of the technological research and development. To put it simply, the company would not have achieved its current status unless there were no technological developments. This impact is considered to be external because although some of the innovative features of HTC products were developed by the company research and development team, nevertheless, they were based on the achievements of global technological developments.
Being an important part of technological development, internet can be viewed as a separate external factor that had an immense affect on the evolution of HTC. According to Shelly and Rosenblatt (2009) today companies operate at all without using the internet in one way or the other. Internet as an external factor had significant affect on the development of HTC in two levels.
Firstly, HTC was able to differentiate and improve its smartphones and PDAs on the basis of internet, by including internet browsing possibility as one of the key features of the company products. There are other many companies in the marketplace that manufacture mobile phones, however, most of them do not have many advanced features that can be found on HTC smartphones. Therefore, it can be said that without the external factor of internet HTC would not have evolved to its current level of brand image and profitability.
Secondly, HTC has greatly benefited from internet in the same way that most other business benefited as well. Specifically, internet was an external factor that helped HTC to evolve to its current level through providing platform to reach to the global marketplace, to advertise its products worldwide and to acquire new partners, as well as to communicate with its stakeholders in the global level.
The Structure of the Market within which HTC Operates
There are different forms of market structure main of which come under the category of monopolistic competition, oligopoly, duopoly, oligopsony, monopoly, natural monopoly, monopsony, and perfect competition (Hirschey, 2009). All of the above listed forms of market structures differ from each-other mainly on the number of companies offering goods and services and the number of customers willing to obtain those goods and services.
The structure of the market within which HTC operates can be classified as oligopoly. Puu (2010) informs that the main characteristic of the oligopoly market structure is that there are small numbers of companies that control the majority of the market in any given industry.
In smartphone and PDA industry there are some major players like Apple (Iphone), Blackberry, Motorola, Acer, HTC, Dell, Nokia, Sony Ericsson, Samsung and HP that control the majority of the global market in the industry. Therefore it can be stated that it is an oligopoly market structure.
One of the main distinctive features of this type of market structure is that “oligopoly is a consequence of mutual interdependence” (Tucker, 2008, p.261) meaning that few main players on the industry are highly dependent on each other in a way that if one of them introduces a new feature within their products thus gaining competitive advantage, the suite will be followed by remaining major competitors as well. A good illustration of this statement in real life would be the fact that when HTC started using Android in their smartphones improving the quality of them, other major competitors started to turn to Andriod as well.
Santerre and Neun (2009) stress that there are high barriers to entry to oligopoly market and it gives a number of substantial advantages to existing market players. Indeed, huge amount of financial resources, skills, knowledge and experience are required in order to start a company that will produce smartphones and PDAs. Moreover, even if new companies emerge in that industry it will take years for them to be able to compete with existing companies. However, in case of HTC the company was able to overcome the high entry barriers with efficiency and matched the status of existing market players in a matter of just several years due to their effective strategy that was based on innovation and market expansion.
According to Parkin (2009) products in oligopoly markets can be highly differentiated. The justification of this statement can be found when comparing the products of HTC to the products of its main competitors. Because existing several main players in oligopoly markets try to increase their share of the market by all means possible, product differentiation provides an opportunity for them to differentiate their brand from other existing brands in the market, and thus, reach their chosen target customer segment. Specifically, HTC has chosen the strategy according to which its products are differentiated from the competition through adopting innovative approach in terms of design and functions HTC smartphones and PDAs offer. So far this differentiation strategy has proved to be effective for the company that can be proved by increasing popularity of the brand and accordingly, its increasing profitability.
Non-price competition can be indicated as another distinctive characteristic in oligopoly markets (Maurice and Thomas, 1999). HTC, Apple, Motorola, Nokia, Sony Ericsson and other major brands in smartphone and PDA industry rarely choose the price of their products as the front for competition recognising the fact that otherwise the profitability of the whole industry can be negatively affected. Instead, as mentioned above product differentiation have chosen as the main front for them for global competition. Even if leading brands dramatically reduce the prices of some of their products it will be the products that have approached towards the end of their life-cycle anyway.
As a result of non-price competition of smartphone and PDA market and high barrier of entry to the industry HTC and other companies on their oligopoly market usually have abnormal profit, meaning that the profit margin for their products is exceptionally high, and therefore most of these companies are multi-billion global brands. Adams and Periton (2009) consider that abnormal profit of oligopoly market structure is usually protected by existing players in the market by further complicating the barrier for entry to that specific market.
HTC Marketing Strategy
Businesses identify their marketing strategy in order to assist them to achieve their aims and objectives through increasing their sales. “An organisation’s marketing strategy describes how the firm will fulfil the needs and wants of its customers” (Ferrell and Hartline, 2008)
HTC marketing strategy formulated by its management has helped the company to enter numerous new markets, and also to efficiently changes in regulatory procedures within existing markets.
Masterman and Wood (2006) suggest identifying the business’s current market position through identifying if the business is a market leader, market challenger, market follower, or market nicher. Evaluating the current market position of HTC through these merits would lead to revelation of the business to be a market leader. HTC has achieved its leadership position through adopting innovative approach in production and design and introducing to the market the first tri-band UMTS 3G device on the Microsoft Windows Mobile platform (2006), the first Microsoft Windows 5.0 Smartphone (2006), the first Tri-band UMTS PDA, and the first intuitive touch screen to allow finger tip navigation (June 2007) (Products and Innovation, 2010). Being in a leadership position has helped the company enormously to enter new markets during company expansion.
Porter’s generic strategy is another efficient method needed to be undertaken when evaluating HTC marketing strategy in detail. According to the strategy product differentiation and cost leadership are considered to be broad market scope, whereas segmentation strategy is a narrow market scope (Porter, 1998).
If analysed by Porter’s generic strategy HTC marketing strategy is more closely related to product differentiation strategy, which is at the same time considered to be the company’s uniqueness competency. Moreover, as stated above the differentiation strategy of HTC products are achieved through making the company’s smartphones and PDAs more innovative in many aspects.
Growth strategies are also useful tools to analyse HTC marketing strategy. Growth strategies suggest four means of achieving growth of the company which are market penetration, product development, market development, and diversification (Kotler and Armstrong, 2010). Market penetration involves selling existing products to existing markets, where growth can be achieved through increasing the volume of sales to existing customers, or finding new customers within existing markets.
Market penetration strategy is not the main growth strategy used by HTC because it is very unlikely to increase the volume of the sales due to the nature of the product, and also it is difficult to attract new customers within existing markets, due to the fact that most of the existing markets HTC operates in are approaching their penetration.
Product development is occasionally used by HTC when the company introduces new products to existing markets. Recent HTC growth was achieved for the company by introducing HTC Gratia, HTC HD7, HTC7 Mozart, and HTC Desire Z using product development strategy. However, product development strategy is used by HTC not only on the basis of introducing new innovative products, but also by introducing new products that are aimed at different customer segment. Condor (2010) supports this viewpoints by stating that HTC marketing strategy is going through massive changes with company introducing more low-cost devices.
Market development is the main strategy that has been used by HTC, and the implementation of this strategy is the main explanation of how the company was able to reach its current level with such a short period of time. As a result of efficient use of market development strategy HTC is currently trading in forty countries around the globe.
Diversification involves selling new products to the new markets and this growth strategy is not used by HTC because the common practice within the company is to test its new products within existing markets first.
Marketing mix is considered to be the integral component of marketing communication. Buhler et al (2009) inform that marketing mix was initially referred to as four Ps of marketing combining product, price, promotion and place, however it has been extended to include people, process, and physical evidence as well, becoming seven Ps of marketing. All above ‘Ps’ can be examined individually as part of comprehensive HTC marketing strategy analysis.
HTC products are their widely known range of smartphones and PDAs that are innovative in their design and functions. Prices of HTC products are not different dramatically compared to the products of their competitors, and the price of each individual product depends on the products specifications and the number and types of functions the product can perform.
A wide range of promotion techniques are used by HTC to advertise their products, main of which are poster promotions and promotions in popular media such as magazines, newspapers and TV channels. As regards to the place element of the HTC marketing mix, the products of the company are available from many locations within all forty countries the company has operations in, as well as through the company web-site.
In essence HTC marketing strategy that has allowed the company to enter new markets was based on innovation and ensuring the high level of friendly user interface in its products.
Moreover, another important factor that contributed to the success of the company in new markets relates to the fact that HTC has been using Android platform for its products increasing their efficiency significantly. Also, fast response from the company in changes within industry also assisted the company to gain success in global arena.
HTC Business Direction and Challenges
In order to analyse current direction of HTC in the most efficient manner it is necessary to also analyse the evolution of the business starting from the day when the company was started until now, when HTC has a specific place, and a specific percentage of Market share in smartphone and PDA global market.
HTC was founded by Cher Wang, HT Cho, and Peter Chou in 1997, and initially specialised in designing and manufacturing smartphones and PDA, along with other similar gadgets for other companies. It was only starting from 2006, that HTC started to design and manufacture smartphones and PDAs under its own brand name (Hi, we’re HTC, 2010).
Since then HTC has introduced a range of innovative smatphones and PDA to the market and today the company is working in forty countries world-wide. On the basis of the above fact it can be said that the business direction HTC managers have chosen for the company is based upon intensive market development by offering innovative products to the new markets. This viewpoint can be justified by the fact that being a small company until 2006 the company started trading in forty countries during the time period of only four years.
HTC market expansion business direction is a popular and efficient business strategy that has numerous advantages for the company in terms of increasing revenue and ensuring long-term growth of the company.
Increased Level of Global Competition
However, market expansion strategy has a set of challenges as well, that can result in losses for the company if not addressed in an appropriate manner. The main challenges of market expansion business direction that HTC chose include increased level of competition from both, local producers in foreign marketplace, as well as other multinational companies also trading there, and cultural differences in local markets.
Intense competition is considered to be the biggest challenge HTC as any other company faces as a result of market expansion. This challenge is dealt with by the company in the most efficient manner by differentiating HTC smartphones and PDAs to make them more innovative as compared to the products offered by the competition.
Local cultural differences can be a source of massive challenge as well HTC should take into account when engaged in international expansion. Because people in each country HTC would be expanding to, that is their potential customers, have different perceptions of life, different life values and different ways of doing things, without any doubts these differences would reflect on how they perceive HTC brand in general, and each specific products in particular as well. These issue needs to be addressed by HTC management in the most efficient manner, since international expansion has been recognised as the cornerstone of strategic plans of the company.
So far, challenge associated with local cultural differences have not affected negatively HTC in its international expansions, because the company has been recognising these differences and taking them into account in different aspects of doing business in a specific country. Specifically, the potential issues associated with cultural differences relate to integrated marketing communications efforts of any foreign company engaged in business in a country.
For example, marketing communication efforts in many European countries and USA would sometimes involve women featuring in their advertisements with references to their sex appeal. While such type of advertisements are perfectly acceptable in Europe and USA, the same advertisements would be considered to be offensive in some Asian, and Arab countries, due to cultural, religious or otherwise differences. If any global company aiming for further expansion would chose to ignore such an important issue in their marketing communications and other aspects of their businesses, they would be risking attracting negative association towards their brand that would damage the value of the brand on the long-term basis.
Underestimated Brand Value
Another considerable challenge HTC would be facing in their international expansion relates to their underestimated brand value in global level as opposed to the brand value of some other major competitors such as Apple, Nokia, Sony Eriksson and others. In spite of their phenomenal success in the marketplace the brand value of HTC is considered to be underestimated at the global level comparing to the brand recognition of its main above mentioned competitors due to the facts that HTC has been in the business for only about several years, while these competitors were around for several decades.
HTC managers are in the process of overcoming this specific challenge at the moment by engaging in aggressive marketing strategies in global level through means of popular media especially, newspaper, magazine, television advertisements, as well as placing their posters in main locations within their existing markets.
Dependency on Wireless Internet
HTC would be facing more challenges in their international expansion strategy because of wireless internet. To be more specific, while wireless internet is widely available and commonplace in many developed countries and in all of the forty countries HTC is already developed countries. HTC further expansion would depend on the existence of wireless internet within the perspective country, due to the fact that most of the functions in HTC smartphones and PDAs only work when there is a wireless internet.
It would be risky strategy for the company to wait until wireless internet becomes popular within developing countries as well so that HTC would enter these new markets, because major competitors wouldn’t stay still. Instead, this challenge can be efficiently met by the company through introducing new kind of smartphones and PDAs that do not require the existence of wireless internet in order to operate, and focusing on promoting these new products in their further expansion to developing countries.
Dependency on Android Software
Moreover, there is another serious issue HTC management have to address and this challenge relates to HTC heavy reliance on Android powered smartphones. It is a well established fact that there was a shift in the company from using windows platform in their smartphones and PDAs to relying on Android. While using Android platform has been profitable for the company so far, being depended on Google, the owner of Android, as a sole provider their system heavily compromises the bargaining power of HTC in relation to this company.
Furthermore, Perez (2010) informs about Windows introducing its new Windows 7 Mobile operating system and there are many potential customers who are eagerly expecting to obtain smartphones and PDAs powered by new Windows 7 Mobile operating system. This fact poses a serious challenge for HTC in strategic level and this challenge could be addressed by the company through examining new product development perspectives using new Windows 7 Mobile operating system.
However, the best possible option for the company to approach the above issue in the strategic level would be to engage in research and development and as a result to develop HTC own brand software to be installed in company smartphones and PDAs. Following this strategy would save HTC huge amount of financial resources currently company is paying Google for using their Android software. And also this objective is totally realistic for HTC taking into account the fact that the company twenty five percent of the total workforce belong to the research and development teams, and they already have delivered outstanding innovative products to the marketplace.
HTC Business Direction
HTC strategic level managers have achieved great results by transforming an obscure Taiwan based smartphone and PDA design and manufacturing company producing products for other companies into one of the main players in the global market just within several years. For many other companies it has taken several decades to match the current status of HTC in terms of size of the company, scope of operations and revenues the company generates. This is an indication of an effective business direction HTC management chose for the company to expand.
The strategy for the business direction chosen by management to expand the company is best reflected on HTC mission statement.
The mission statement of HTC is “to become a leading innovative supplier of mobile information and communication devices by providing value-added design, world-class manufacturing and logistics and service capabilities” (Mission and Capabilities, 2010).
Generally, HTC mission statement implies that the company wants to achieve profit maximization through being innovative, having quality design and through having competitive logistics, as well as service capabilities. These are the main principles HTC management was guided by during undertaking their market expansion strategy.
Innovation has been the main principle chosen by HTC management as the basis of their business direction. Accordingly, HTC presented innovative features in most of their smartphones and PDAs when introducing them to the global marketplace. This principle proved to be efficient due to the fact that the Market of mobile phones, smartphones, and PDAs was already highly competitive in most of the countries HTC was expanding to, and the only way HTC could attract customers to its products was by installing in them extra technological and otherwise features that their competitors did not offer.
Specifically, HTC was first to introduce a range of fundamentally innovative products and features such as first tri-brand UMTS 3G devise on the Microsoft Windows Mobile platform (2006), first Tri-brand UMITS PDA (2006), and the first intuitive touch screen to allow finger tip navigation (2007).
The important place of innovation for HTC is also highlighted by the fact that 25% of total workforce represents research and development staff engaged in working on innovative products and features. (Mission and Capabilities, 2010)
HTC is not only innovative on specific products and features, the company also implement innovation on various business processes as well, for example, “the company is shifting their focus to Android-based phones”(Mann, 2009).
Evans (2003) confirms the business principle of innovation as the most appropriate principle for companies to implement, due to the fact that, being innovative would allow companies to be proactive rather than reactive in today’s constantly changing marketplace. This statement is especially true for HTC, because nowadays product life-cycle of smartphones and PDAs can be limited only to couple of years.
Providing efficient logistics is also an important element of HTC mission statement, and at the same time this element has been selected as one of the cornerstones of the company’s international expansion.
Currently, HTC has operations in 21 countries in Europe, 16 countries in Asia Pacific, United States, Canada, Brazil and some African countries. Expanding to so many countries within several years and currently conducting operations within them requires effective logistics practices in place. This requirement has been met by HTC in an efficient manner on the basis of implementing the best logistics practices in business with some modifications to meet the unique requirements of the company.
HTC business direction places a significant importance on modern manufacturing as well, which is evident from the mission statement of the company. Groover (2010) insists that the principles of modern manufacturing that include efficiency in each process, innovation and cost saving is a requirement for modern day companies to implement in order to survive in the marketplace
The Effect of Global Perspective on HTC Supply-Chain
Globalisation has had immense impact on HTC supply-chain management as well as many other aspects of the business. As a result HTC strategic level managers consider the global interests of the company in terms of supply-chain management, rather than being limited to local and national orientation.
According to Boyer and Verma (2010) mention a range of challenges globalisation throws on supply-chain management such as additional costs for the businesses associated with costs of space, various tariffs, exchange rate and others.
Global perspective has effected HTC supply-chain management in a way that the company management have to do comprehensive researches in order not to allow above mentioned additional costs to drag the company down in terms of finance.
Time is considered to be another important issue related HTC global supply-chain management. As opposed to local supply chain management global supply-chain management usually involves shipping from overseas, and if not managed efficiently can cause disruption for the manufacturing of HTC products.
Although, not taken seriously weather conditions is another factor that can negatively effect HTC global supply-chain management, especially taking into account the recent environmental issues such as global warming.
Moreover, there are also such issues like custom clearance, as well as local governmental legislations that are likely to disrupt HTC supply-chain management. However, in spite of all the above mentioned challenges associated with HTC global supply-chain management, the positive impacts of globalisation on HTC supply-chain outweigh its negative impacts, and the main positive impact is the possibility of purchasing raw materials for the company much cheaper than it is possible in national level.
Global Perspective and HTC Value-Chain
The analysis of the current status of HTC value-chain provides an opportunity to examine the impact of globalisation on the value-chain. Porter (1985) divides value-chain analysis into primary and support activities. Inbound logistics, operations, outbound logistics, marketing and sales, and service are the elements of primary activities, whereas firm infrastructure, human resource management, technology development, and procurement are considered to be the elements of support activities.
Both, HTCs primary and secondary activities have been modified as a result of globalisation.
As a result of globalisation the inbound logistics for HTC, the raw materials come from various places in the world. It provides an opportunity for the company to obtain raw materials of high quality and in low costs. Belonging to primary activities, HTC operations are another important value-chain component for the company that has dramatically changed as a result of globalisation as well.
Specifically, as a result of globalisation currently HTC is undertaking operations in forty countries around the world and still is exploring its opportunities for further expansion. The impact of globalisation on the marketing and sales of HTC, as its important element of value-chain consist of the fact that nowadays the company marketing executives have to devise integrated marketing communications strategy in each of the forty countries the company operates in taking into account cultural differences and differences in perception in each one of them.
Human resources are one of the most important elements of HTC value-chain that has been transformed fundamentally due to the forces of globalisation. Nowadays, HTC team represent the people of many nationalities from many countries of the world gathered together to achieve a common goal, to create value for the company regardless of whatever department of the company they work in. This scenario is highly beneficial for the company as opposed to the situation where HTC management had to choose their workforce only among local applicants from Taiwan.
HTC Strategic Direction on Global Perspective
HTC strategic direction involves further market expansion that is going to be implemented as a result of offering innovative products to the market. Therefore, it is evident that globalisation has affected HTC strategic direction in such a deep level that HTC strategic level management have aimed to take advantage from the benefits globalisation offers by combining the strategic direction of the company with globalisation.
Global impacts affecting strategic direction of companies include political, economical, social, and technological factors on global level. Political uncertainty, possible acts of terrorism, government rules and legislations within a country or a region are the global political factors that may have a negative impact on HTC strategic direction of market expansion on that specific country or region.
Global economical factors can be another source of challenges HTC have to deal with when moving towards their strategic direction. These factors can be in forms of country exchange rates, monetary and fiscal policies, tax system and economic regulations in countries where HTC is already operation or planning to expand to. HTC does not have influence over global economic factors, however is forced to operate within boundaries created by these conditions.
There are also global social factors that can present challenges, as well as opportunities for the strategic direction of HTC. These factors include changing working patterns in companies (working from home, job sharing etc.), local cultural issues, ethical issues, changing family and society values etc.
Although, global social factors sometimes can present significant challenges for HTC in achieving their strategic aims and objectives, the impact of global social factors on HTC can be altered by management, and challenges presented by these factors can be altered into opportunities if they are addressed appropriately, by manufacturing products, devising their marketing strategies and offering the standard of service into account the existence of these factors.
Global technological factors have massive influence on HTC strategic direction. Due to the fact that HTC strategic level managers are positioning the company to be highly innovative one, the impact of global technological factors are even more to HTC compared to many other businesses in various industries. These factors include any technological breakthrough that directly or indirectly relevant for the company.
The best strategy to implement by HTC in relation to global technological factors would be to be proactive in making technological changes in the industry and to lead the industry in that manner.
HTC Competitive Advantage on Global Level
Ma (2004) argues four Cs of competitive advantage in global level to be creation and innovation, cooperation, co-option, and competition. Creation and innovation is considered to be the most important aspect of the business where competitive advantage in global level can be achieved. Accordingly, HTC strategic level managers have associated innovation as part of their brand identity.
In order for creation and innovation to be a source of competitive advantage in global arena new innovative product development by HTC would not suffice; innovative approach should be implemented in relation to other important aspects of the business as well, such as effective organisational structure, efficient style of organisational learning, superior corporate culture, and creative HR practice.
Internal and external cooperation by HTC is another source of competitive advantage in the global marketplace. Cooperation in that sense includes building strategic alliances with various companies and agencies in various industries, as well as learning from partners and sharing knowledge.
Co-option is considered to be another source of competitive advantage in global marketplace by Ma (2004), according to whom co-option includes tacit collusion, enticing the third party, lobbying the government, placating stakeholders and co-opting customers. Accordingly, HTC strategic level managers would have to critically evaluate existing practices within the company towards these issues to identify are they being utilised to their full extent as sources of competitive advantage.
Another important source of competitive advantage in global arena is reported to be the elements of competition including timing and positioning, pre-emption, direct attack, flanking attack, encirclement and concentration (Ma, 2004). Timing and positioning in the global competition are being well utilised by HTC as a source of competitive advantage in the global arena. For example, the company is positioned as a global brand manufacturing smartphones and PDAs efficient and innovative in design and functions, and as such, they introduce innovative products and features within them in a constant and regular basis.
HTC is an innovative company that has been following market expansion strategy aggressively to achieve its current position in the marketplace. The company functions within oligopoly market structure that provides a range of benefits for HTC main of which include high barriers for new competitors to enter the industry and high level of profits the company is achieving selling its smartphones and PDAs.
Efficient marketing strategy adopted by HTC has assisted the company to enter numerous new markets as well as to deal efficiently with changes in regulatory procedures within existing markets. Specifically, HTC marketing strategy was efficient in terms of communicating the main strength of the brand, which is being innovative in terms of design and functions of their smartphones and PDAs to existing and potential customers in existing and new markets.
The company has chosen further market expansion as a strategic direction for the company. Some of the challenges associated with international expansion including intense level of competition, and the need to address cultural differences have been effectively addressed by HTC, through being innovative when dealing with competition, and being sensitive when dealing with cultural differences.
However, there are other major challenges that need the attention of HTC management if the company is aiming for further benefits through international market expansion strategy. HTC should increase the level of its brand value which is currently lower compared to the brand value of some of its main competitors through more extensive global integrated marketing communication practices.
Moreover, the issue of dependency on wireless internet needs to be resolved by the company by manufacturing smartphones and PDAs that do not require wireless networks in order to function if HTC is planning to enter new markets of developing countries where wireless internet is not commonplace.
However, the main issue for HTC to resolve in a strategic level in order to increase its profitability dramatically and to ensure the long-term success of the company would be introducing its own-brand software instead of being depended on Android, Windows or any other software supplied by external parties.
HTC strategic level managers have chosen business direction for the company that places a heavy emphasis on entering new markets in various locations of the globe. This business direction has proved to be effective so far, due to the fact that international expansion has become easier due to the globalisation and it can bring colossal revenues for the company.
In line with the challenges global marketplace throws into the businesses, HTC managers have chosen a strategic direction for the company on the basis of which was innovation in every aspect of the businesses, especially innovation in design and features of HTC smartphones and PDAs.
Being innovative has helped HTC to expand its share in the global marketplace in the market which is highly competitive and where some of the main competitors of HTC initially have had much more financial resources to be spent for business development.
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