HTC Corporation Analysis - Competitive Analysis and SWOT

Published Date: 23 Mar 2015 Last Modified: 12 Jun 2017

Keywords: htc corporation analysis, htc competition, htc swot analysis

Introduction and Company Overview

HTC Corporation is a smartphone manufacturer which was founded by Cher Wang, HT Cho, and Peter Chou in Taiwan in 1997. The company use HTC as its name behind many of the most famous operator-branded devices on the smarphone market. Since 2006, HTC promoted its HTC brand and brought its products to market through established unique partnerships with key mobile brands which include the leading four in the US, the top five operators in Europe, and many fast-growing Asian operators (HTC, 2011). HTC's headquarter is located in Taiwan and key operation centers in Taiwan, USA, United Kingdom, and China. In addition, these centers not only ensure the ability to enhance relationship with customers and service clients, but also maintain a presence in 21 key markets, which include the United States, the United Kingdom, Germany, France, China, Japan, Italy, the Netherlands, Belgium, Poland, Denmark, Russia, Singapore, Thailand, the Philippines, Indonesia, India, Malaysia, Australia, the United Arab Emirates (UAE) and Brazil. Moreover, it holds distinct and strong competitive advantage in the smartphone industry in design, innovation, and development due to provide good experiences for its customers (HTC Corporation, 2009). Recently, HTC has been honored with the highest industry honor as "Device Manufacturer of the Year" by the GSM Association (GSMA) in February 2011 (GSMA, 2011).

Strategic Posture

Strategic History of HTC

Since HTC was founded, it has gone through three comprehensive realignments which include Professional PDA Designer, Smart Phones, and Global HTC Brand. By 1997, HTC was authorized to develop products using Windows® CE and developed the world's first handheld personal data assistant (PDA). Furthermore, this also represents HTC's positive first step to establish an important strategic partner with the Microsoft Corporation and built the solid foundation for future growing and flourishing. Besides, HTC make the Compaq iPAQ for the Compaq Computer Corporation to reach huge market success in 2000. It means the initial growth and success of HTC in the PDA segment (HTC Corporation, 2009).

In 1999, the president of HTC Peter Chou perceived the mobile telecommunication products would play increasingly important role in daily life. And saw the GSM standard would form Europe to dominate the worldwide market. He made a decision to take the company rapidly into the telecommunications stage which became the second major realignment of HTC. He subsequently visited Europe's largest telecommunications companies to discuss an innovative new approach for the wireless communication market. In 2002, through making the partnership with O2 (UK) and Orange (France), HTC launched two new mobile wireless devices, the O2 XDA and Orange SPV which based on Microsoft's operating system and broke new ground for the mobile industry. These new mobile devices not only helped telecommunication service providers boost average revenue per user (ARPU) rates, but also earned worldwide attention. In this regard, HTC did effort to understand customers' telecommunications service needs and developed "customized" mobile phones. Therefore, HTC built out critical support sales and service networks and strategic moved into the global telecommunications market (HTC Corporation, 2009).

The third major realignment of HTC is the formal launched the HTC brand in May 2007. Soon after, HTC launched the HTC Touch and the world's first 3D touch screen interface mobile which placed HTC outstand over touch screen smartphone worldwide. In June 2009, HTC Sense which is a new mobile phone experience designed to met user's needs, habits, and expectations at heart. HTC integrate this concept on the Google's Android operating platform to develop the first model, HTC Hero which created new potentials and won the award "Best Mobile Handset or Device" for the company. In the same year, HTC launched the slogan "Quietly Brilliant" and a new full series of YOU campaign, in order to raise awareness for the HTC brand and enhance overall brand value. The promotion activities campaign worked successfully and not only allowed HTC to win the award "Device Manufacturer of the Year" in 2011, but also came from unknown zero to mainstream hero in the industry around the world (HTC Corporation, 2009).

Mission Statement and Strategic vision of HTC

HTC's mission statement is to become the leading innovative supplier of mobile information and communication devices by providing value-added design, world-class manufacturing and logistics and service capabilities (HTC Web Mission, 2011). HTC's strategic vision is to further reduce the distance between people, facilitate the management of information, and reinforce users' communications and lives (HTC Corporation, 2009).

HTC's Business Level Strategy

The business level strategy of HTC is focus differentiation strategy. HTC implement it through two main strategies which are brand strategies and competitive factors. Regarding to Brand Strategies, HTC focus on smartphone market, and wants to be the leaders in Microsoft operating system and Google's Android platform. Besides, HTC tries to built up brand value through keeping launch innovative products and friendly user interface, and rapidly response to the market change due to deliver product diversification to meet market's need (HTC Web Strategy, 2011).

The second strategy t is competitive factors which include the factors beneficial to HTC's developmental vision, and negative factors for HTC's developmental vision and countermeasures. HTC indicate that the factors beneficial to HTC'S developmental vision includes work closely with the industry leaders to facilitate change of trends, cooperative teamwork, good execution, implements of global operation and cost control, strategic partnerships with the world's industrial leaders in telecommunications help understanding of customer's needs, and continual market expansion, particularly in the 3G platform market which is beneficial to the demand of data transmission. Therefore, HTC will keep maintain these factors to create competitive advantages for the company. On the other hand, HTC would find out some countermeasures to deal with the negative factors for HTC's developmental vision which includes more competitors jump into the smartphone market and global economic weakness (HTC Web Strategy, 2011).

Environmental Analysis

Strategic History of the Smartphone Industry

Smartphones have already played an important role in people's lives. They not only make a revolution in the mobile phone industry, but also change the method people use the computer. (Weber, 2009)Through the technology continually improve and several changes of environment, such as built up the internet infrastructure, establish mobile telecommunication standard, innovation of friendly interface, and so on; the mobile phone evolve to smartphone. Smartphone similar the personal computer and it provide information management, phone call, and surf the internet as a one stop solution (BusinessDictionary.com, 2011).Therefore, the evolution of telecommunication standard and the use of operating system in mobile devices affect the strategy made by those big players in the industry. There are several significant events present as follow: (GSM Association, 2011)

The evolution of telecommunication standard:

In 1989 the GSM standard is the internationally accepted digital cellular telephony standard.

In 1994 GSM Phase 2 data/fax bearer services launched

In 2000, First commercial GPRS services launched.

In 1995, Global GSM subscribers exceed 10 million Fax, data and SMS services started, video over GSM demonstrated.

In 1999, the first Release of the third generation specifications was essentially a consolidation of the underlying GSM specifications and the development of the new UTRAN radio access network.

In 2002, the first Multimedia Messaging Services go live. First mobile camera phones launched.

In 2005, the first HSDPA network goes live.

In 2007, the further HSDPA network launches and introduction of HSUPA.

Source from http://www.gsmworld.com/about-us/history.htm

The use of operating system in mobile devices: (HTC Corporation, 2009)

In 2002, HTC launched the first Microsoft powered Smartphone

In 2007, Apple launched the I-Phone with its owned operating system iOS.

In 2008, Google released the first open source mobile operating system, Android to smartphone manufacturers.

In 2009, HTC launch the HTC Dream which was the first cell phone to feature Google's Android software operating system.

Implementation of Porter's Five Force Model in Smartphone Industry

According to Hill and Jones (2008), Michael E. Porter's Five Force Model could use as a tool to help HTC Corporation (HTC) identify the relative attractiveness of the Smartphone industry. In order to acquire competitive advantage over such five competitive forces, HTC has to provide additional values to its products. Thus, analyzing and constructing HTC's value chain in term of Porter's Five Forces Model is very important to evaluate activities that add value to its products and identify additional value to its products.

Risk of Entry

-Economies of Scale

-Brand Loyalty

Rivalry among Established Companies

-Apple, Nokia, and RIM

- Industry Competitive Structure

- Industry Demand

The Bargaining Power of Suppliers

-Many hardware vendors

-Software can be developed by itself or provided by 3rd party

The Bargaining Power of Buyers

-Many Brands for choice

-Limited differentiation

-Information

-Switching costs

Substitute Products

-Laptops

-Netbooks

-PDAs

Risk of Entry by Potential Competitors

Risk of entry by potential competitors comes from offering more functional and personal products with low cost and better networking service in Smartphone industry. However, Risk of entry by potential competitors in this industry is low because numerous barriers prevent entrance into the industry which is created by existing players through their strategy and extremely investment. These barriers are shows as follow.

Economies of Scale

The fixed cost and the investment of the necessary research and development in Smartphone industry are very high. For instance, HTC invested $280 million in its research and development in 2009. In addition HTC regularly invests its research and development around 5% to 7% of total revenue annually (HTC Corporation, 2009). Thus, economies of scale foe new entry has to be achieved a large volume for spreading the costs to make profit (Hill & Jones, 2008).

Brand Loyalty

It is difficult for new entrants to expand market share from established companies which have significant brand loyalty (Hill & Jones, 2008). According to the new research report form YouGov's Technology and Telecoms Consulting Team, it shows that 81% of Apple owners would stick with the Apple brand and 50% of BlackBerry Smartphone owners and 44% of HTC owners were likely to make repeat purchases (Atkinson, 2010). In this regard, establishing the reputation of firms to enhance its brand loyalty and take away market share from existing own-brand companies is very difficult for new entrant in this industry.

Rivalry among Established Companies

The competitive force of rivalry among established companies in the Smartphone industry is very high. For instance, Apple's legal strategy tried to blunt HTC's rise through the lawsuit (Einhorn, 2010). In this regard, Apple's aggressive offensive actions and HTC's defensive countermoves illustrate the strength of rivalry of the Smartphone industry. Here are some factors to explain the rivalry among established companies and present as follow.

Industry Competitive Structure

Currently, the primary players of the Smartphone industry consisting of Nokia, Research In Motion (Blackberry), Apple, HTC, Samsung, and Motorola. According to IDC, a market research firm, has announced the market share of Smartphone vendors separately are Nokia (32.7%), Apple (17.4%), RIM (15.3%), Samsung (8.9%), HTC (7.2%), and others (18.6%) during the third quarter of 2010 (IDC, 2010). Therefore, similarity market share of these company results in high competitive structure in Smartphone industry.

Industry Demand

The level of industry also determines the intensity of rivalry among established companies. Growing demand of the industry makes the competition of existing companies tend to moderate (Hill & Jones, 2008). According to the IDC report, it indicates the Smartphone market has grown up to nearly ninety percent from 2009 (IDC, 2010). Due to industry demand keep growing, we can say the intensity of rivalry in the Smartphone industry is tending to moderate

The Bargaining Power of Buyers

Smartphone's buyers include carriers, retailers, and end individuals. The buyer power is moderately high because its customers have many other choices like Apple, RIM, HTC, Samsung, Motorola, Nokia, and so on. Consumers will stop using HTC's handsets if their quality, service and feature are less attractive than others. Besides, we list several factors relative power of buyers as below.

Differentiation

There are limited differentiations of Smartphone products. Many Smartphone manufacturers use different operating system to produce similar interface of their products (Costello, 2010). Moreover, more choice of products and limited differentiation result in high bargaining power of buyers

Information

Due to the transparent information of Smartphone, buyers can easily research capabilities of Smartphone products and gain the information, such as price, speciation, and feedback from others for purchasing comparison.

Switching costs

Switching costs should depend on the different partnership between the carriers and manufacturers and what type of mobile plan they provide. Take Apple and AT&T as example. If a customer wants to switch to the latest IPhone 4, he only needs to pay $199 USD for the device with 2 years AT&T's contract (AT&T, 2011). It is easy to save time and price to low the switching costs. Thus, switching costs are low.

The Bargaining Power of Suppliers

The primary suppliers of Smartphone industry can be classified into two major groups which are hardware providers and software providers. The hardware suppliers include display, camera, housing, memory, battery, GPS/Wi-Fi/Bluetooth, and so on. Thus, there are so many venders for hardware components. However, the Smartphone processors are manufactured by a few companies, such as Qualcomm. Besides, all of processors' CPU design is licensed from the ARM- the CPU design company in UK (Gillooly, 2009). Hence, we do believe the bargaining power of the hardware suppliers is moderate.

On the other hand, most of Smartphone's operating systems are open source platform, like Nokia's Symbian, Google's Android, Apple's IOS, Blackberry's RIM, Windows Mobile, and Linux (Shah, 2010). These open source platform not only make Smartphone manufacturers develop their own software or application in its products to reduce cost, but also allow third party software company to design specialist application for these operating system to increase its function and value. For example, HTC designs and produce phone using Google and Microsoft software as its operating system to reduce its reliance on outside developers (Culpan, 2010).

Substitute Products

Substitute products of Smartphone are those technology productions, such as laptops, netbooks, PDAs, and tablet PCs. However, the power of the alternatives is low because those technology productions just have individual function in terms of substitute productions. Furthermore, Smartphone do wide variety functions, such as work everywhere via Wi-Fi network or GSM network, and Global Position system. Most importantly, people can access the company data anywhere and anytime via Smartphone without miss a beat wherever they are. Nowadays, all features and conveniences which Smartphone have could against the functions of the laptops, PDAs, and even GPS (Hill F. , 2008).

Driving forces for Smartphone industry

Growing use of the internet and emerging new internet technology applications

The mobile Internet is growing so fast. There is about 500 million people use the mobile internet worldwide in 2009. The Smartphone will be the most popular method to access the internet than PCs in the next few years. There are more and more people want to have Smartphone instead of desktop or laptop. "In Egypt and India this is 70 percent and 59 percent of mobile internet users are mobile-only. Even in the US it is 25 percent." (MobiThinking 2010). Now there are about 150 million presently users log in Facebook from mobile devices. "People use Facebook on their mobile devices are twice more active on Facebook than non-mobile users."(Mobithinking 2010) These make the reason of the Smartphone growth very fast recently.

Product innovation

Product innovation is always the important part of industry life. Customers always want to have the new and efficient products and industry always need to develop and innovate the products that meet the customers' needs. In the mobile phone industry, People used to use the mobile phone as oral communication. After that people start to use the mobile phone to memory some of the data such as pictures, songs, phone book and address book. Mobile phone was becoming a small personal memory book. Now mobile phone is also called as Smartphone that combine with operating system and become very small PC in your pocket. Smartphone can be use as GPS, access the internet, download, games, and translate language. Therefore, the Smartphone industry should be always consider innovation as primary objective. (HTC Corporation, 2009)

Changes in who buys the product and how they use it

The target market of the Smartphone is young generation. There are two parts of the young generation that are college students and fresh graduates. College students want to have Smartphone. According to the researcher at Ball State University, there are 49 percent students own a Smartphone at college in 2010, compared with 38 percent in 2009. The 97 percent of students use text messages for their primary communication method and 30 percent of students will use email to communicate to each other. There are about 90 percent of Smartphone users that use their phone to surf the internet. About 97 percent of the users will take and upload photos and 87 percent of the owners will look at videos and upload videos by their Smartphone. (Kelly Truong). Fresh graduates need a Smartphone, too. Fresh graduates continue their habits from the college, but they use their Smartphone on the different way. They use their Smartphone for their work in order to have more efficient than others. The Smartphone can help them check their email anywhere, stay in touch with their office and update the news from office quickly.

Increasing globalization of Smartphone industry

The demand of the Smartphone is growing rapidly worldwide, because of mobile internet becomes more popular. "Gartner expects the worldwide touch-screen mobile device market to top 362.7 million units in 2010, an increase of 96.8 percent over 2009 sales of 184.3 million units." (Michelle Maisto). More and more people start to buy a Smartphone, because of the trend market. Smartphone is going to instead of the traditional phone.

Changing societal concerns, attitudes, and lifestyles

Smartphone changes the way people used to be. First, the communication between the people is changing. People use social media to communicate to each other. "Facebook user base has risen to 430 million year-over-year, roughly the same increase as QQ in China. Twitter, while sporting only 58 million users experienced a 1238% year-over-year growth rate. Facebook now dominates in chat, messaging, video sharing, games, VoIP and more. "(MobileBeyond). People want to check the social media instead of text message and give a phone call. For example, Facebook shows a lot of information that people want to express for their days and also upload their photo to their friends. Smartphone can give people to see the latest news from the social media anywhere and anytime. Second, the lifestyle is going to change. People used to go to the bank to make transaction and deposit the check. After we have Smartphone and internet, we can just take a photo with check and upload to your bank. Finally, the attitude is going to change. People used to buy the products and compare the price in the different stores. It was not convenient and efficiency way to shop. Now you can easily to check the price of the product by using Smartphone that can help you make the right decision to shop. Smartphone is changing our lifestyles, attitudes and societal concerns.

Industry life cycle

There are five stages of the industry life cycle. In the embryonic stage, the industry starts to begin and develop the product to the public. In the growth stage, the company produces more products and increases the market share. In the shakeout stage, some of competitors start to see the opportunities in this market. In the maturity stage, the product price is stable and more competition comes to market. In the decline stage, the sale of the product decreases until the product innovation or discontinue in the market. The Smartphone industry is in the growth stage. The demand of the Smartphone industry is growing rapidly and there are only few competitors in this market. (Hill & Jones, 2008).

Internal Analysis

Value Chain

The value chain is that an organization creates value by performing a series of activities and it represents how each competitive advantage created via an organization adds value to the service or product for each customer. In the HTC Company, R&D, Production, Marketing & Sales, Customers Service and Human Resource are adding the value to their company. (Hill & Jones, 2008).

Research and Development

HTC extremely concerned about research and development department. In 2009, HTC has nearly one-third of R&D personnel which in total HTC personnel. They also invest in R & D development about 5% to 7% of the total revenues. HTC also pay attention on their innovation and design. HTC introduced the world's first Android Smartphone in the Android operating system. After that, HTC also develop the new 4G high speed Smartphone that customer can download or upload their games, picture, video and mobile multimedia fast than before. (HTC Annual Report)

In 2010, HTC introduce the world's first windows phone which is HTC HD2. HTC HD2 has a capacitive touch screen interface and 1 GHz processor. It allows consumers to enjoy the fast and smooth touch experience and quickly respond to every touch of the action which is a major breakthrough for Windows Mobile phones. It is the world's first embedded HTC Sense for Windows Mobile; make the phone more intuitive operation. HTC Sense has three core principles for the design -Make it Mine, Stay Close, Discover the Unexpected. The ideal of the HTC Sense is easy to operate in order to attract more customers to buy their Smartphone. (HTC Annual Report)

HTC develops the product designs to meet china market with China Mobile. In China, TD-SCDMA is China's telecommunications industry with independent intellectual property rights of international communications standards. Each of the phones needs to have TD- SCDMA in order to use in china. In 2008, HTC launched their first TD-SCDMA Smartphone in china in order to extend their market into China. (HTC Annual Report)

Production

HTC is growing so fast. According to the annual report, "with worldwide demand for mobile phones expected to continue rising through 2010, we can expect the tight supply situation to continue as well." HTC needs to make sure their suppliers to increase productivity in order to meet the demand of the market. HTC also needs more manufacturing plants and facilities to meet the increasing demand of HTC products. (HTC Annual Report)

As HTC is growing so fast in order to meet the demand of the market, they still focus on their quality control. HTC introduces their new HTC Hero to the market In June 2009. After that HTC Hero has win a lot of awards which are "Stuff Magazine's "Gadget of the Year" award, Mobile Choice's "Phone of the Year" and T3 Magazine's "Phone of the Year". During the world's largest annual Telecommunications industry event, the 2010 Mobile World Congress, HTC Hero was further recognized with the 2010 Best Mobile Handset or Device Award." (HTC Annual Report)

Marketing and Sales

HTC business is focus on European and North America markets in 2009. There are 48.8% of revenues from North American, 30.4% from European and 20.8% from Asia and other regions. Especially, the annual growth rate is 28.6% in North America which is the most potential markets. HTC development strategy is the current worldwide brand positioning HTC have a good development and increase HTC brand image in order to create long-term competitive advantage HTC. (HTC Annual Report)

HTC has different products to meet the different level of the markets. First, HTC's HD2 is the luxury and high-end product. Second, they have mid-price products which are HTC Tattoo and HTC Touch2 in order to have competitively in their market segment. (HTC Annual Report)

HTC focus on the Smartphone industry, wireless communication technologies and become more sophisticated in this market. HTC Cooperate with Telecommunication Company to place their phone in the store in order to increase sale of their phones such as Verizon, Sprint and T-mobile. HTC mobile phone now, through Europe, America, Asia, sales of leading carriers and distributors, and has gradually penetrated into the Smartphone market in developing countries such as the Middle East, Central and South America and Russia. (HTC Annual Report)

Customer Service

HTC opened the world's first HTC Care Customer Service Center in Taiwan Taipei in 2007. Fred Liu, Chief Operating Officer of HTC said "HTC believes that providing superior after-sales support is important to our continuing success, which is why we place such a high degree of importance on HTC Care. In the future, a number of HTC Care centers will be launched in Taiwan and overseas, allowing our customers to enjoy their mobile lifestyles without missing a call," Customer service center is very valuable for customers. Customer service center can save time and more efficient to solve the problems from customers. Customers can just walk into the center and get personalized consultations by HTC products, Warranty repairs and buy HTC's products. HTC also provides a loaner phone during repair time. Customers do not need to worry about the alternative phone during that period. (HTC Annual Report)

Human Resources

The most valuable asset in HTC is employees. In recent years, HTC hires recruits outstanding talent to its ranks in the areas of product design, user interface, brand promotion and sales and marketing. HTC also hire the professionals' employees from Europe and American that make HTC increases their diversity, challenging, vital and encouraging. "As of the close of March 2010, HTC employed 8,948 staff worldwide. The 169 non-Taiwanese staff employed by HTC filled 30% of all HTC managerial positions. Non-Taiwanese managerial and technical staff filled 8.3% of all HTC positions worldwide. Women hold 21.4 %of HTC's 557 current managerial positions." (HTC Annual Report)

Functional Analysis

Income Statement

In recent three years, HTC expands successfully to U.S. market by cooperating with main telecom companies such as Verizon and T-mobile. According to table 1, HTC increased its revenue from 2007 to 2008. It increased its revenues by 28%. Even though economic was in recession in 2009, it just decreased by 5%. It shows that HTC built up its U.S. market and had its customer loyalty.

In addition, because U.S. government establishes some policies to improve economic situation n 2009, economic seems to be recovered from recession. In 2010, HTC operates successfully its market. Compared to 2009, those financial results increase rapidly. For revenue aspects, HTC increases its revenues by 90%. In 2010, HTC promotes its smartphone and smartphone industry become larger. Those reasons cause HTC to increase its revenues. Finally, its net income in 2010 is NT 39 billion, which is the highest in recent years.

Ratio Analysis (HTC V.S. Competitors)

We can evaluate competitive of HTC through ratio analysis. Table 2 contains main competitors in U.S. market. We can know what the advantage of HTC is. First of all, for return on equity aspect, HTC is higher than other competitors. It shows that HTC can generate higher return for its shareholders. As managers of company, they should make decision from shareholders' sides. In this case, HTC has better performances than other competitors. In addition, gross margin of HTC is lower than other competitors. In process of developing new market, managers always provide lower price and higher service to attract new customers. However, those actions can cause gross margin to decrease. If HTC owns customer loyalty, it can increase gradually to make higher profit.

For turnover aspect, HTC creates higher than other competitors. By attracting new customers, HTC can generate higher revenues based on total assets and total fixed assets. Even though HTC has lower in gross margin, it can also increase total profits by increasing turnover. The total fixed asset is 23.7, which means that HTC generates 23.7 times based on total fixed assets. In process of enlarging company size, company needs to issue debts or stocks to generate funds. In addition, current ratio means current asset is divided by current liability. If the current ratio is less than 1, it means that current liability is more than current assets. According to table 2, current ratio of HTC is 1.5. The reason is that HTC needs to issue debts to develop company size. For now, HTC can be eager to expand its business to U.S. market. For HTC, it can get funds from debts.

For its growth rate, U.S. market is an opportunity for HTC to expand its business. In recent years, it expands successfully to U.S. market. This market can support HTC to grow up rapidly. According to table 2, its growth rate of revenue is 92.92%. The result is higher than other competitors such as RIM and Moto. In its growth rate of profit, even though HTC needs to spend funds on promotion and research and development, it still increases its profits by 81.98%. However, HTC needs to decrease its receivable because its growth rate of accounting receivable is 127.16% which is higher than profit and revenues. It shows that HTC has much accounting receivable and it should solve this situation. The reason is that if bad debt increases, HTC can suffer from the situation and accumulate much bad debt.

Ratio Analysis

We analyze HTC for three aspects: ROE, ROA, Gross Profit Margin, and current ratio. First of all, we analyze HTC for ROE. Due to higher net profit in 2009, HTC has higher ROE than previous years. The ROE in 2009 is 56%. Compared to 2008, HTC has already increased by 10% from 46%. In addition, the situation also causes HTC to increase in ROA.

In addition, we analyze HTC based on gross profit margin. Gross profit margin in 2007 and 2008 are 38% and 32%, respectively. Gross profit margin means that company can get profit from producing goods. The companies in high-tech industry are higher than those in manufacturing industry. In 2007, HTC developed its Europe market and it can keep higher gross profit margin by customer loyalty. After 2008, HTC uses pricing strategy and cooperates with main telecom to run business in U.S. It hopes that it can attract new customers and keep customer loyalty. In order to meet the situation, gross profit margin is less than previous year.

Therefore, for its current ratio, current ratio equals to current assets divided by current liabilities. If current ratio is less than 1, it shows that current liability is more than current asset. In 2007 and 2008, current ratios are 2.44 and 1.8. It is common way to get operation funds from issuing short-term liabilities such as short-term debts. Expanding to U.S. market causes HTC to decrease current ratio to 1.5 from 2.44 in three years. If HTC can generate profit from those funds, it can create profit for its shareholder and pay interest to its bondholder.

Finally, we analyze Earnings per Share (EPS) which equals to net income is divided by shares of outstanding. If this ratio becomes higher, it shows that company can generate higher profit to its shareholders. From 2007 to 2009, HTC creates almost $1.00 per shares to its shareholder.

Stock Performance

Table 3 contains two main lines which are HTC and Nasdaq. The red line represents Nasdaq. From 2006 to 2011, the index of Nasdaq increases by 20% even though Nasdaq declined to 40% in 2009 because of financial crisis. Compared to index, HTC has better performance. In 2009, financial crisis causes to economic which is in recession. When economic is in recession and unemployment rate reached the highest level, customer cannot afford to buy smartphone. This can cause HTC to have poor performance.

If company has ability to grow up, investors can eager to invest in those kinds of stock. In 2009, the stock performance is better than index. It increases its stock price by over 100%. It shows that HTC runs successfully U.S. market.

Market Share

In smartphone industry, Nokia is the best performance in market share. Its market share is 33.1%. For HTC, it increases its market share from 2009 to 2010. Its growth rate is 165.4% (IDC- Press Release., 2011).

Organization structure

Source: (HTC, 2010)

According to function structure to combine with complete to the High Tech Computer Corp. First, we analyze the function structure to High Tech Computer Corp. HTC is an international high technology company. It includes too many things so that the company has many function divisions. Specially, the HTC focuses on Research & Development. For example, R & D center department, it develop long-term product for HTC. Information technology department, it develops IT systems. It can set up and develop more system for the HTC product. Customer Service & Quality Assurance department, it can control the quality of product and responsible for the customer. (HTC, 2010)

The company thinks that the customer and quality are the first business philosophy. Different division has coordination advantages. Each division has professional Project, when the customer or company has any problem. It can fix the problem at the short time. The division can easily to communicate and share information with each other in the new decision-making. It can help employees to improve their organization performance. Also, when the company develops the new product, it can decrease the problem. On the other hand, high technology has many complicated project. The company want ensure that the employees and the division know of function. It can make sure of functional division to clearly to know the type of work. It also increases the efficiency.

For the Global Operation Center, the HTC is a global company. Different countries have different customer behavior so that they build up this center. It can control global production capabilities and also, they have worldwide after-sales service programs to make sure the customer satisfaction and control the quality of product. (HTC, 2010)

HTC operates primarily through two divisions -- an information appliance engineering division and a wireless mobile engineering division. In addition to its facilities in Taiwan, HTC operates a small office in Bellevue, Washington, where it designs its own interface software for its phones (Hoover's, 2010).

Even though, the organizational structure can bring the advantage thing, but how to control the development cost of product and develop the new system of product. It is company must thinking.

Culture

HTC slogan is quietly brilliant and those words reflect the company's culture. (Most Innovative companies-2010 HTC, 2010)

From the very beginning, HTC has maintained a clear and straightforward approach to its business. The company does not copy or imitate the work of others and fosters a corporate culture averse to being a follower. Rather, corporate energies and time are invested in creating original innovation able to infuse further value into HTC products. (HTC Unveils Global Advertising Campaign and New 'Quietly Brilliant' Brand Positioning, 2009) Since the launch of our proprietary HTC brand, we have dedicated our efforts to making the HTC brand truly world-class. Product design work now more than ever considers the habits and preferences of users in our major markets, and the entire organization is increasingly attuned to user and customer needs. The company is geared toward meeting challenges head on, resisting complacency and routine, and constantly challenging itself to do better. We look forward to leveraging the HTC brand to bring HTC's energy and innovation to every corner of the world. (Most Innovative companies-2010 HTC, 2010)

Core capabilities and distinctive competencies

HTC had its competitive in its research and development, and production. In recent years, HTC promotes its own brand. In order to increase its market share, HTC needs to invest funds in R&D and gain competitive from those parts. For now, HTC creates its own customer loyalty and more customers are attracted by its smart-phone no matter function or design. (HTC to boost R&D in own-brand drive, 2008)

In addition, HTC manufactures smart-phone and computer accessory for its clients. It has competitive in production. It can keep product quality and mass production. By cooperating with its clients, they can also gain competitive. For its clients, they can trust HTC which can produce higher quality. They can continue to generate its competitive in other aspects. In production stage, HTC can manufacture effectively and save funds in labors. (HTC Smart Defines A New Category Of Smartphone For The Masses, 2011)

SWOT analysis

Strengths

The operation of HTC is to manufacture its own mobile phone and other electronic products for other clients such as PDA. In the past, HTC just manufactures mobile phones for other clients. The advantage for HTC is to own the cost advantage and have higher skills to develop how to manufacture. However, HTC decided to create its own brand when it has the enough skills to invent mobiles with more functions. It can bring more profit to HTC. When it manufactures mobile phones for its clients, it needs to compete with other competitors. (HTC: making the leap from white label to brand, 2011)

In addition, HTC was manufacturing company whose content is to manufacture products for its clients. In order to keep its customers, it can manufacture higher quality. HTC can own its competitive in TQM. For example, HTC manufactured smart-phone for Google and they cooperate to develop the system named as Android. By the system, they shorten gap between those companies and Apple. Apple has its advantage in its application. However, for HTC and Google, they develop together the system and make more customers want to use the system. (HTC May Offer Larger Tablet Computers, CEO Chou Says, 2011 )

Finally, when HTC decided to invent its smart-phone, many specialists think that it is hard for HTC to create its own brand because it does not have experience in developing its own brand. Manufacturing and developing new brand is the different thing. In fact, HTC invest funds in R&D and use some engineers to develop new products. For now, it has already created its customer royalty and trusts its quality. (Mr. Detail, 2008)

Weaknesses

Even though HTC grows up rapidly its business size, it still has weak in market share. If HTC still has lower market share, it is hard to continue to enlarge its customers' niches. It can try to cooperate with main telecom companies. For example, it cooperates with three main telecom companies such as Verizon and AT&T in U.S. market. It can grow up by those locations. In early stage, it can get customer confidence from those companies. (IDC - Press Release, 2011)

HTC just has some kinds of model so that HTC is hard to attract other kinds of customers. It should consider how to develop new models. In smart-phone industry, product design is a factor to influence customer demand. Some customers just care for product design, not function. The reason is that other competitors can develop similar function so that customers can consider whether to buy smart-phone based on other standard such as product design and brand prestige. For example, Apple creates its own brand prestige and customers are attracted by its brand value. HTC can invest in advertisement or sponsor some activities to attract more customers. (HTC Desire vs iPhone 4: Smartphone showdown , 2010)

Opportunities

The main opportunity for HTC is that smart-phone will be main cell-phone. The reasons are that some customer likes gradually to use smart-phone. It can get more opportunities to enlarge its revenues. In addition, it can increase competitive by cooperating with other companies such as Google. They develop Android system so that more customers like to use Android system. (HTC Posts Record Revenue, Profit on Android Phones, 2010)

In addition, HTC can expand its business to other countries such as India. However, it should develop other kinds of models because it sets up higher quality with higher price as its standard. HTC can design other models with lower price to attract customers.

Threats

For its competitors, HTC meets Apple as its competitors. For now, HTC can get successfully market share from Nokia. (IDC - Press Release, 2011) However, it is hard to attract customers of Apple. Young is the main customers of Apple. HTC should develop its feature to attract young customers. In addition, HTC can reach its bottleneck in process of research and development. It can develop new mobile phones by cooperating with other companies. (HTC and Apple Stealing Market Share from Motorola and RIM, 2010)