HTC Corp. in 2012
Problem: Unsuccessful differentiation. Although HTC created different kinds of brands for their smartphones it failed to differentiate itself from competitors. It could not market the brand as a unique one in order to conquer customer loyalty as other companies did, such as Apple and Samsung. Hence, the failure of creating brand recognition set them apart from the differentiation strategy they were pursuing.
External Analysis
General Environment
Two factors best describe the general environment: technological and sociocultural.
Technological (Technologies are in continuous development, being competitive requires investing in R&D and staying up-to-date with the new trends in the industry; it became a need to perform different tasks apart from just making phone calls; innovation, leadership and ability to forecast are key factors in order to be successful in this industry.)
Sociocultural (change in the lifestyle, the need to stay connected any time and any place, the virtual characteristic of the social life (Facebook, Instagram); technology became a component part of people’s lives. All these social trends have shortened the product life cycle and imposed companies to innovate at a faster pace.)
Industry Analysis
Porter’s five forces were used to analyze the industry:
Barriers to entry – high (Oligopolistic industry - few players in the market, probability of success is low, manufacturing process is hardly to imitate)
Threat of new entrants – low (High competition, very expensive to run such a business, very risky to enter to.)
Bargaining power of suppliers – high to moderate (Some of the industry players are heavily relying on suppliers while others who are vertically integrated depend less on their suppliers. Industry players rely more on software suppliers than on hardware suppliers; hardware can be replaced and switching cost is low, while the switching cost for software is high because it requires royalty payments.)
Bargaining power of buyers
External Analysis
General Environment
Two factors best describe the general environment: technological and sociocultural.
Technological (Technologies are in continuous development, being competitive requires investing in R&D and staying up-to-date with the new trends in the industry; it became a need to perform different tasks apart from just making phone calls; innovation, leadership and ability to forecast are key factors in order to be successful in this industry.)
Sociocultural (change in the lifestyle, the need to stay connected any time and any place, the virtual characteristic of the social life (Facebook, Instagram); technology became a component part of people’s lives. All these social trends have shortened the product life cycle and imposed companies to innovate at a faster pace.)
Industry Analysis
Porter’s five forces were used to analyze the industry:
Barriers to entry – high (Oligopolistic industry - few players in the market, probability of success is low, manufacturing process is hardly to imitate)
Threat of new entrants – low (High competition, very expensive to run such a business, very risky to enter to.)
Bargaining power of suppliers – high to moderate (Some of the industry players are heavily relying on suppliers while others who are vertically integrated depend less on their suppliers. Industry players rely more on software suppliers than on hardware suppliers; hardware can be replaced and switching cost is low, while the switching cost for software is high because it requires royalty payments.)
Bargaining power of buyers