Htc Case Study

HTC Corporation

Problem Statement:

The HTC executives must identify whether its current brand strategy is suitable to accomplish their company's future goals and execute its current strategy of increasing its brand awareness. HTC must decide how to distinguish its brand name from established competitors who operate in a fast growing and innovative cell phone industry.

Analysis:

HTC was started over twelve years ago and originally focused on notebooks. HT Cho, the company's current Chief Engineer Officer (CEO) and a former engineer, has a relentless passion for innovation. HTC Corporation created its own brand of smart phones in 2007, which required the company to start their own brand strategy as well. There were many risks associated with this new initiative. Skeptics opposed it because the company had already successfully established itself as the leading manufacturer of cell phones. This division of HTC Corp. had to develop a brand strategy which would define the company's strategic intent. The company had to determine how to separate itself from its primary competitors who are AT&T, Nokia, and RIM.

The company's strategic intent is to "build a reputation of making BMW of phones, slightly more expensive but still affordable" by targeting the "high end of the 'prosumer' market," as stated on page eleven of the case study. In other words, they intend to establish a new sweet spot within the smart phone market. This market covers the overlap of consumers and professionals. The company focused on these customers because Apple typically targets sophisticated customers, Nokia targets all segments, and RIM typically targets larger enterprises. HTC wants to attract individuals who value the features of a smart phone, professional enough to need its features, and willing to pay a slight premium for it. HTC sees an opportunity to create a new demand, from a segment of customers who have not been targeted by its competitors. These customers' needs are likely to evolve like the cell phone industry, so HTC can continue utilizing its customization to continue meeting this customer base's demands.

HTC's primary needs, or the reason customers choose their product over their competitors, are customization and quality. Customization led to their success because all of their competitors were focused on developing a standardized smart phone, which maximized profitability and minimized costs. Customization gives HTC valuable insight to what direction the smart phone market is heading because they routinely discover customers' evolving demands before its competitors. Their competitors' strategies involved less innovation and customization because they were focused on gaining as much of the market as possible rather than moving the market. HTC sees customization as an asset and realizes how customizing smart phone technology will meet the personalized demands of their customers, regardless of the cost. Additionally, HTC chooses to maintain its integrity by using high quality components in their customized smart phones. The company is trying to attract higher end customers of the market who expect a high quality and reliable phone. Creating a high quality product is sustainable because most competitors can easily duplicate a cheap product

HTC knows its secondary needs of platform, smart phones, trendy, latest technology, and partnerships will gain some customers while losing others. HTC uses Windows Mobile and Android, while its competitors use other operating systems. Android does not require licensing applications, while its competitors' operating systems do. Customers have a choice of choosing from a simple, feature, or smart phone. Some customers prefer the simple phones which only make phone calls while others prefer smart phones which offer wireless connection and convenient applications. Smart phones are becoming a more and more trendy choice for customers who prefer a status symbol of owning the most current technology. Other customers are satisfied with keeping their phone which serves its basic functionality. The latest technology provides customers with faster and greater access to information through its updated features. This provides customers the ability to perform functions from their cell phone rather than their home computers. There will always be customers who will never see the value of this technology. A company's brand recognition can heavily influence a customer's buying decision. Google's reputation attracts some customers to HTC while detracting others.

HTC's required needs of Google, innovative culture, research and development, user friendly, supply chain, and technology are needed to make HTC competitive in the smart phone market. The cell phone market was already considered to be crowded and dominated by five operating platforms. Google's Android "claimed to be the first truly open-sourced platform" and HTC made the first cell phone to run on it, as stated on page twelve of the case study. HTC's innovative culture eliminated the traditional beauracratic structure of creative design and allowed its engineers to collaborate openly and freely in order to maximize the potential for innovation. HT Cho believes their brand strategy will not survive if the company doesn't develop high-quality innovative products whose eye catching designs and functions catch owner's attention. This also attributed to HTC's initiative design skills and ability to move fast in a rapidly moving phone market. Cho placed a heavy emphasis on research and development because he believes producing cutting-edge smart phones is the key to creating a powerful brand. For example, the Magic Lab's diverse staff created the company's next generation of technology which is a touch screen interface that does not require using a physical keyboard. Smart phone users value how easy their complex features are to use but their phones would be less appealing if it were not for this. Smart phones require several components to be made. HTC must develop a relationship with suppliers in order to have access to these components. Advances in technology led to the creation of smart phones. HTC would not in business and could not make smart phones, without access to this technology.

HTC chooses to ignore pricing, advertising, US market, target markets, and application stores because it did not fit into accomplishing the company's strategy. HTC's smart phone was reasonably priced above $200 due to its technology and components. The company ignored producing lower priced phones because