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Agenda INTRODUCTION SITUATIONS QUESTION AND ANSWER

INTRODUCTION BenQ was originally spun off from Acer in 2001 to provide a separate branded channel. BenQ sells and markets technology products, including consumer electronics, computing and communication products. Its principal products include LCD monitors and Television Digital projectors, digital Cameras and mobile computing devices. October 2005, it acquired the loss-making mobile devices division of Siemens. With the acquisition, BenQ planned to sell co-branded mobile phones (BenQ-Siemens) in addition to the BenQ and Siemens brands.

Introduction BenQ In November 2006, BenQ Corp. (BenQ) announced that it would cut 400 jobs at its Shanghai, China plant. This unit had belonged to the mobile devices division of Siemens AG (Siemens), a major German engineering and electronics company, up until October 2005, when it, along with plants in Germany, Brazil, etc., and R&D labs in Germany, Denmark, and China were sold to BenQ. After acquiring the division, BenQ renamed it BenQ Mobile GmbH (BenQ Mobile). BenQ Mobile had, in September 2006, filed for bankruptcy protection after a year of heavy losses. 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.

…CONTINUE In 1847, Werner von Siemens established the Siemens & Halske Telegraph Construction Company in Berlin. The company laid several long distance telegraph lines in Europe. In the 1920s and 1930s, the company developed several products including radios, automatic traffic lights, multi- purpose electric locomotives, and television sets

RESULT OF THE DEAL Mobile phones become one of BenQ’s core businesses. And BendQ can access to Siemen’s customer in EU, Latin America. BendQ aspire to become o major player in the mobile phone market. Siemens unit slipped to No.5 in 2005 with share (5.5%) compare to 9 % ( No.4) in 2002 in global handset sales.

…continue BenQ’s Q1 profits tumble by 90 % ($9.1 million) as its revenues fell 23% ($1 billion) The Siemen and BenQ’s combined market share dropped from 13.5% (2004) to 9.8$ (2005)

Question 1 How do you evaluate BenQ’s Acquisition deal of the Siemen handset unit? Is it indeed “ too good to be true?. What are the pros and cons? Answer: The deal totally failed ( revenue down, profit down, lost capital) To obtain an entire business and its known brand (Siemen) for free was too good to be true for BenQ ( enhance Brand visibility).

Question 2 Where is BenQ vulnerable? Answer: Corporate culture conflict and communication issues, team difficult to integrate (Most of the BenQ’s expatriates were not fluent in German, the local language) Does not have sufficient funds, it is difficult to resist the huge losses A small number of people responsible for the integration process in the limited time deals with two companies The combination of the sub-brand is difficult to become the best choice for consumers

Question 3 What strategic marketing recommendation would you make to BenQ’s going forward? Answer: Forward toward the developing and emerging countries Create a flagship product Improve product quality Personnel training to develop R & D and apply for more patents

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