TEAM RAM MA1N0103 陳乃華 MA1N0206 Anja Išek MA1N0245 Michel Sung

CASE PRESENTATION QUESTIONS & ANSWERS

CASE PRESENTATION QUESTIONS & ANSWERS

 BenQ was a prominent Taiwanese electronics and computer peripherals manufacturer.  As of 2005, it was also the sixth largest manufacturer of mobile phones in the world.  Acted as an OEM ( Original Equipment Manufacturer) for global brands like Nokia, Motorola, etc., it also sold mobile phones under the BenQ brand.  The company had big plans to expand its operations and build its brand all over the world.

 Siemens started manufacturing mobile phones in the late 1990s.  Despite producing high quality phones, Siemens was unable to make a mark in the highly competitive industry, and the business began incurring huge losses.  In 2005, after yet another year of losses in the mobile phones business, Siemens decided to exit the business.  However, securing the future of its employees was high on its list of priorities.  Therefore, it looked to sell the division to a company that would assure the continuity of the division's operations in Germany...

 In April 2005, Siemens' mobile devices division reported US$ 179 million in losses for the first quarter of  In June 2005, BenQ acquired the mobile phone division of Siemens  BenQ Acquired manufacturing units in Germany, Brazil, and China.  October 1 st : Benq- Siemens is one of the world's largest mobile handset makers

 BenQ failed to turn around the Siemens unit, which incurred losses of € 840 million within a year  The loss was attributed to BenQ's lack of management and marketing experience as well as to the tough German labor laws that prevented BenQ from laying off people.  Consequently in September 2006, BenQ Mobile filed for insolvency.

 In early 2006, BenQ Mobile undertook a series of cost-cutting measures Closed down a design center in Ulm, Germany Brought all research and development work to Munich Sold the research and development facility in Aalborg (Denmark) to Motorola

 The first BenQ Siemens brand mobile phones were unveiled in January 2006.

 In March 2006, the BenQ-Siemens P51, a smartphone, was launched. However, customer response to the new products was unwilling

 Cost cutting results to bad feelings among German stakeholders (unions, government) with the suspicion that BenQ only bought the Siemens mobile business for its patents.

CASE PRESENTATION QUESTIONS & ANSWERS

 How do you evaluate BenQ acuisition deal of the Siemens handset unit ? Is it indeed « too good to be true » ? What are the pros and cos ? ProsCons Access to manufacturing plants Access to patent and technology Acess to market in Europe and Latin America Relatively low cost acquisition Siemens brand image Siemens was not competitive enough in the industry Financial losses Tough German labour law and governement expectations Realtively low financial power of BenQ compare to challenge that bring the acquisition

 Where is BenQ vulnerable ?  BenQ's acquisition of Siemens' mobile devices business was a rare case of a small entity acquiring a larger unit.  BenQ's August 2005 sales were 21% lower when compared to the same period the previous year.  Ben Q was not financially strong enough to deal with the future  The fall in sales was mostly because of the loss of its biggest mobile phone customer - Motorola.  BenQ brand image was not established in US and Europe  BenQ's attempts to expand its branded business seemed to have affected its OEM business, with several customers starting to see it as a potential competitor...

 What strategic marketing recommendations would you make to BenQ’s going foreward ?  Focus on Strategic Core Business Unit : Activities such OME and other products where BenQ can have competitive advantage and knowledge (LCD Displays TV screen )  Continue to develop its activites to achieve a better financial situation and seek for partnership as Joint-Venture to develop its own brand products to other markets  Develop its brand image if BenQ plan to launch its own brand products on others activities and markets.

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