Htc Case Analysis
--HTC Corp.in 2009
Class: Competitive Marketing Strategy
Student Name: Fisher Yu
1. Evaluate HTC’s performance to date. What are its competitive advantages and vulnerabilities? Be sure to elaborate on HTC and its competitors’ positioning on performance and cost.
Financial performance of HTC compared with its main competitors
For this part, we will be using ROA (return on assets), ROE (return on equity), and profit margin to evaluate HTC’s abilities to generate profits and to control its cost with comparison to other manufacturers.
With reference to the financial ratios of HTC in Exhibit 1a, over five years (2004 to 2008), its average net profit margin was 18.8%, return on assets 34.2%, and return on equity …show more content…
2. How would you characterize HTC’s financial position vis-à-vis competitors? the financial
Based on the analysis of HTC’s financial performance, we can conclude HTC’s financial position as following: * In sales of smartphones, HTC ranks fourth in the world, after Samsung, Apple and Nokia by Q2, 2012. Its sales and business expanded rapidly for about one decade, but starting from the last quarter of 2011, they were not doing very well any more, their profits and sales decreased significantly compared to the same time period of previous years and the downward trend of its business seems to continue. HTC is experiencing one of its hardest times. * Although the sales of their products are good, HTC’s overall capital, cash level and investment in R&D and marketing effort, compared with other companies, especially its largest competitors, Samsung and Apple, are still far behind. * The cost of the products is relatively higher, as a result, this limits HTC’s ability to compete with a price or cost advantages. And HTC has relatively larger fluctuations in the cost of production of different products. * The financial performance analysis reveals that the company has competitive advantages in terms of market growth rate, relative market share, net profit margin, return on assets and return on equity. Its ratios, overall, excel that of the mobile phone