Harvard Case - ASUSTek Computer Inc. Eee PC (A)
"ASUSTek Computer Inc. Eee PC (A)" Harvard business case study is written by Willy Shih, Howard H. Yu, Chintay Shih, Yi-Ching Hsieh, Hung-Chang Chiu. It deals with the challenges in the field of General Management. The case study is 16 page(s) long and it was first published on : Jul 9, 2008
At Fern Fort University, we recommend that ASUSTek Computer Inc. (ASUS) aggressively pursue a global expansion strategy focused on emerging markets, leveraging its innovation in the netbook segment to capture significant market share. This strategy should be underpinned by a strong brand management approach, strategic partnerships, and a commitment to corporate social responsibility to ensure sustainable growth.
2. Background
The case study focuses on ASUS, a Taiwanese computer manufacturer, and its foray into the netbook market with the Eee PC. In 2007, ASUS faced a challenging decision: whether to capitalize on the emerging netbook market with a low-cost, lightweight, and portable device, or to stick with its existing product line. The Eee PC, despite its initial success, faced stiff competition from established players like HP and Dell.
The main protagonists of the case study are:
- Jonney Shih: CEO of ASUS, who championed the Eee PC project and its potential to disrupt the market.
- Jerry Shen: President of ASUS, who was initially hesitant about the Eee PC due to concerns about profitability.
- The ASUS team: Engineers, designers, and marketing professionals who worked tirelessly to develop and launch the Eee PC.
3. Analysis of the Case Study
To analyze the case, we can use the following frameworks:
- Porter's Five Forces: This framework helps assess the competitive landscape. The netbook market was characterized by high competition, low entry barriers, and the threat of substitutes (tablets).
- SWOT Analysis: This framework helps identify strengths, weaknesses, opportunities, and threats. ASUS's strengths included its innovation, manufacturing capabilities, and brand recognition. However, it faced challenges like limited resources and competition from established players.
- Value Chain Analysis: This framework helps understand the different activities involved in creating and delivering value to customers. ASUS's value chain included design, manufacturing, marketing, and distribution.
Key Findings:
- Market Opportunity: The netbook market was rapidly growing, offering a significant opportunity for ASUS.
- Competitive Advantage: ASUS's Eee PC offered a unique value proposition with its low cost, portability, and long battery life.
- Brand Recognition: While ASUS had a strong brand in the PC market, it needed to build brand awareness in the netbook segment.
- Resource Constraints: ASUS faced limitations in terms of marketing budget and production capacity.
- Globalization Potential: The netbook market was global, offering significant growth opportunities in emerging markets.
4. Recommendations
To capitalize on the netbook market opportunity, ASUS should implement the following recommendations:
- Global Expansion Strategy: Focus on expanding into emerging markets like India, China, and Brazil, where demand for affordable technology is high.
- Strategic Partnerships: Partner with local distributors and retailers to gain access to new markets and build brand awareness.
- Product Differentiation: Develop innovative features and functionalities to differentiate the Eee PC from competitors.
- Marketing Strategy: Implement a targeted marketing campaign focused on the unique benefits of the Eee PC, leveraging digital channels and social media.
- Corporate Social Responsibility: Engage in social responsibility initiatives to build a positive brand image and attract environmentally conscious consumers.
- Talent Management: Invest in hiring and retaining skilled engineers, designers, and marketing professionals to support product development and expansion.
- Supply Chain Optimization: Optimize the supply chain to ensure efficient production and distribution, especially in emerging markets.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: ASUS's core competency lies in its ability to innovate and develop high-quality products at competitive prices. The Eee PC aligns with its mission to provide affordable and accessible technology.
- External Customers and Internal Clients: The recommendations cater to the needs of both external customers (consumers seeking affordable and portable technology) and internal clients (employees seeking career growth opportunities).
- Competitors: The recommendations aim to differentiate ASUS from competitors by focusing on emerging markets, product innovation, and brand building.
- Attractiveness: The recommendations are expected to generate significant returns on investment through increased market share and brand value.
6. Conclusion
By implementing a global expansion strategy, focusing on innovation, and building a strong brand, ASUS can successfully capitalize on the netbook market opportunity and achieve sustainable growth. The company's commitment to corporate social responsibility will further enhance its brand image and attract a wider customer base.
7. Discussion
Alternatives:
- Sticking with the existing product line: This option would have limited growth potential in a rapidly changing market.
- Focusing solely on developed markets: This option would limit market reach and miss out on the significant growth potential of emerging markets.
Risks and Key Assumptions:
- Competition: The netbook market is highly competitive, and new players could emerge.
- Technological Advancements: Rapid technological advancements could make the netbook obsolete.
- Economic Conditions: Global economic downturns could negatively impact demand for netbooks.
8. Next Steps
To implement the recommendations, ASUS should:
- Develop a detailed global expansion plan: Identify target markets, develop market entry strategies, and secure necessary resources.
- Establish strategic partnerships: Identify potential partners in emerging markets and negotiate mutually beneficial agreements.
- Invest in product development: Allocate resources to develop innovative features and functionalities for the Eee PC.
- Launch a targeted marketing campaign: Develop a comprehensive marketing strategy that leverages digital channels and social media.
- Implement corporate social responsibility initiatives: Identify relevant initiatives that align with the company's values and target audience.
- Monitor progress and adjust strategies: Regularly assess the effectiveness of the strategy and make necessary adjustments based on market conditions and competitor actions.
By taking these steps, ASUS can position itself for long-term success in the dynamic and competitive netbook market.
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Case Description
ASUSTek Computer was the world's largest manufacture of PC motherboards, yet when it tried to launch its new sub-notebook Eee PC, the organization faced challenges in doing things outside of its established processes. Though many of the team members had worked together for years, they had to find new ways of working as they tried to launch the new mobile Internet device category without undermining its existing notebook PC business.
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