Asustek Computer Inc.

Individual Firm Analysis:

ASUSTeK Computer Inc.

MGMT 352

Nov. 14th, 2017

By Yaling Hsu

Purdue University

This report

Overview

ASUSTek Computer Inc. (ASUS) is a manufacturer of computer, communications, and consumer electronics products. It offers a wide variety of cutting edge products from all in one PC’s tablets, smartphones, and motherboards. Its products constantly have breathtaking features that grab attention. Mainly, ASUS operates in the Asia Pacific, Europe and America. To be more specifically, it classifies its operations into six segments: Singapore, China, the United States, Taiwan, Europe and Others.

Strategy

To succeed in the ultra-competitive IT industry, ASUS focuses on speed-to-market, cost and service. Every employee strives to master the “ASUS Way of Total Quality Management” in order to achieve the “Persistent Perfection” promise of the brand.

Since the price difference between electronic products id not a significant factor in affecting consumers’ purchasing decision as compared to the brand image and the design/style of the product. ASUS primarily adopts penetration pricing as its pricing strategy. The reason being technology is a price sensitive industry and being a manufacturer and a retailer itself, it has the cost advantage. Since ASUS is a cost leader in the industry, it consistently provides the best affordable laptops on the market. For instance, compared to most manufacturers out there, customers have to pay over $600 for premium features like a 1080p screen, an SSD and an aluminum chassis, ASUS offers laptops like the VivoBook E403SA that has all three but is priced under $400.

Weaknesses

Lack of Scale. Although ASUS has incredible manufacturing potential, distribution is not up to the mark. In comparison with its major competitors such as Lenovo, Toshiba and Apple. ASUS’s revenue last year was about $15.74 billion which is about 30 percent of Lenovo’s revenue, of Toshiba’s and about one-thirteenth of Apple’s revenue. It’s lack of sale may place itself in an unfavorable position when it comes to competing with its competitors.  

Poor Marketing. ASUS lacks marketing skills like those of Apple or even Lenovo. It is notable to see that Apple is a legend in promoting its products, Lenovo also regularly branding itself through product differentiations as well as through its marketing communications. However, such differentiation efforts are found to be absent in ASUS. Typically, it does not spend much on its product promotion, and it relies on their quality for sales.

Poor Support. Phone agents often take a long time to solve technical problems and inaccurate live chat, these are all due to the result of a confusingly organized web resources. Its tech support offerings leave much to be desired.

Strengths

Product Innovation. One of ASUS’s core competencies is its ability to create affordable, high quality electronics that are innovative, and are able to stand out from its competitors.

Worldwide Service Partners. There are around 50 service sites in 32 countries, and it has more than 400 service partners worldwide.

Strong brand image and recognition in the industry. From the very beginning, ASUS established the reputation for providing durable and quality products. In 2014, not only it received a high local and global awards, it was also featured in Fortune Magazine as one of the the world’s most admired companies. Especially in Taiwan, it has been recognized as one of Taiwan’s top performing international brands. It’s certain to say that its strong brand image in the market helps the company to deliver sustainable business growth.

Strong Market Share. ASUS is ranked 4th among players in the PC market with about 7.6 percent market share.

Strong in In-house Manufacturing. ASUS has vertically integrated operation into various subsidiaries to manufacture components. It also has integrated supply chain operations. The main assembly of most products is done in-house, only some sub-assembly of notebook plastic parts and holding chassis for hard disk drives are subcontracted. With that being said, the firm is capable of reaching faster to the market and also superior capabilities of development.