Analysis of the Strategic Situation of HTC, the Mobile Phone Handset Essay

Analysis of the Strategic Situation of HTC, the Mobile Phone Handset Firm - Essay Example The main objective of the paper is to undergo strategic situational analysis of HTC which is a mobile phone handset firm. It will attempt at preparing a SWOT analysis of the company. The study will also focus upon Porter’s five forces model as well as industry life cycle analysis. In order to comprehend the resources held with the company, the study will make use of the value chain analysis. PESTEL analysis will be conducted in order to comprehend the macro environmental factors affecting the products and the services of the company. Porter’s Five Forces Model In order to recognise the competitive scenario of the smartphone industry in which HTC operates, the Porter’s five forces analysis can be quite applicable. Entry Barriers There are several barriers that prevent companies from entering into the smartphone industry. A few of the barriers that may work in favour of HTC need to be determined. High fixed cost, which is required for research and development, is c onsidered to be one of the biggest barriers to entry into the industry. High brand recognition of the established companies is considered to be other barrier to entry for the new firms since people prefer to purchase goods from those companies that they trust (Scribd, 2012). Bargaining Power of Buyer It has been observed that the bargaining power of the buyers of smartphone is quite high. There are innumerable substitutes available in the smartphone industry. The product differentiation is quite low in comparison to the competitors. The demand for smartphones is generally elastic because of the fact that they are not indispensable products (Scribd, 2012). Threat of Substitutes Products There are various substitutes available for smartphones which are generally utilised for mobile phone’s admittance to information. There are a few substitute products available in the market, which include laptops, cell phones, pagers and organisers. The cellular phones as well as laptops offer the services that are needed by most of the customers in terms of access to information for the consumers. The different complements that the consumers can use for the smartphones are e-mails along with maps, internet applications as well as software that are available over the phones (Scribd, 2012). Rivalry There is high competition in the smartphone industry and even though there are few strong competitors, the industry does not endorse numerous organisations. This is because of differentiation. Although there is greater differentiation between the casual as well as the professional users for smartphones there is limited capability to differentiate it. There is negligible scalability in order to generate more number of software by not directing the market to a small number of firms (Scribd, 2012). When customers purchase a regularly utilised product, they tend to put greater emphasis upon quality instead of price. There is minimum differentiation for price and the companies with recognized low quality as well as fewer budgets for research and development will face difficulties in competing within the market. Bargaining Power of the Suppliers The phones are normally assembled making use of the components from numerous suppliers. Original Equipment Manufacturer (OEM) has