Optimal Strategy for the Smartphone Industry in Taiwan: HTC Case Study

Optimal Strategy for the Smartphone Industry in Taiwan: HTC Case Study

Yi-Fen Chen (Chung Yuan Christian University, Chung Li, Taiwan), Bi-Chu Chen (Jinwen University of Science and Technology, New Taipei City, Taiwan), Wen-Yu Chen (Chinese Culture University, Taipei, Taiwan), Chia-Wen Tsai (Ming Chuan University, Taipei, Taiwan) and Wei-Hung Lin (Chung Yuan Christian University, Chung Li, Taiwan)
Copyright: © 2012 |Pages: 18
DOI: 10.4018/jiit.2012100105
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Abstract

Smartphone development has opened the door to many future business opportunities. Many smartphone manufacturers in Taiwan have received orders from large international companies (mainly as OEMs or ODMs), while only few manufacturers have developed their own brands. If the authors can provide these enterprises with an effective decision-making strategy, they will be able to make the best decisions in time. The purpose of this paper is to take critical success factors (CSFs) and the existing internal capabilities of an enterprise in an external environment into account to build an operational model guide that enterprise in its decision making process. This study combined the Delphi method and the analytic network process (ANP) model to construct a decision model, calculate the weighting of every criterion and sub-criterion, and determine the optimal decision-making strategy in the smartphone industry. Then, the authors chose the HTC Corporation as a case study. The results showed that the development trend of the smartphone industry was the integration of mobile phones. The strategy of excellent functions strategy is the optimal strategy for the implementation of the alternatives.
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1. Introduction

While the light industries and export processing had previously driven the economic development in Taiwan, industries in Taiwan have transitioned from labor-intensive to technology-intensive. By December, 1981, when the National Economic Conference held its second discussion of electronic information and machinery for strategic industries, Taiwan had become a major producer in the global information technology industry. In 1996, the output of the IT hardware industry in Taiwan reached 164 billion U.S. dollars. Specifically, the growth of the manufacturing industry got higher and was ranked third in the world, following the United States and Japan.

As the IT industry developed, low-cost computers became popular, and the industry entered an era of low profits. One by one, manufacturers had stepped in the communication industry. Initially, cable network equipment was the primary product of the communication equipment industry. Then, the global development of mobile phones in the 1990s and the onset of the mass production of mobile phones in 2000 had driven the rapid growth of the wireless communication technology in Taiwan. According to an IEK survey, Taiwan has recently been included in the top 20 among all countries for the global production value of communication equipment, indicating that the communication industry in Taiwan is now playing a vital role in the world market.

In the recent years, advances in technology have forced operating system manufacturers to offer more mobile services, such as SMS, MMS, and video-communication, so that mobile phones now can be used to do a lot more than just making phone calls. Many manufacturers, such as mobile phone, 3C, and computer software manufacturers, have expanded their market potential with new products. This effect differs from that observed for the industry of the traditional multi-media and multi-functional mobile phones: smartphones. A TRI report from 2008 predicted that in 2009 there would be up to 254 million smartphones in the world.

Smartphone development has opened the door to many future business opportunities. Most smartphone manufacturers in Taiwan have received orders from large international companies (mainly as OEMs or ODMs), while only few manufacturers have developed their own brands. Because the smartphone industry is a high-tech industry, the life cycle of a product would soon enter a growth stage, at which point many competitors always want a piece of the market. Thus, effective decision making in innovative or transfer industries is a major concern for enterprises. Moreover, most organizations are becoming increasingly complex with emphasis on decentralized decision-making (Singh, 2007). If we can provide these enterprises an effective decision making strategy, they would be able to make the best decision in time.

Strategy evaluation of an organization is a multi-criteria decision-making (MCDM) issue (Rice & Rochet, 2004; Gao & Hailu, 2012). The present research integrates the qualitative method (Delphi Method) (Holden & Wedman, 1993; Murry & Hammons, 1995; Joshi, Banwet, & Shankar, 2011) and quantitative (analytic network process, ANP) (Meade & Sarkis, 1999; Saaty, 1996; Cheng & Li, 2005) as analytical tools.

ANP is an extension regarding the analytic hierarchy process (AHP); Saaty (1999) proposed an assessment scheme based on the holistic significance via integrating linkages and feedback into a decision-making system. The AHP denotes a framework with an independent hierarchical relationship (Rigi & Khoshalhan, 2011); and it also has been used to assign a weight to each course using its attitudes, knowledge level, motivation, and learning style (Al-Radaei & Mishra, 2011). Technically, the published ANP applications has mainly dealt with strategies and logistics in the supply-chain management (Sarkis, 2003), project selection (Meade & Presley, 2002; Cheng & Li, 2005), location selection (Eddie, Cheng, & Ling, 2005), strategic alliance partner (Büyüközkan, Feyzioğlu, & Nebol, 2008), project selection (Amiri, 2010), and so on.

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