ntucc_asus

NTUCC

Increase AsusPadFone Market Share

紀莉惠周恬永葉家豪楊凱甯鄭亘倫林韋豪

2Final presentation.ppt NTUCC 1st Group

Executive Summary

Situation：• Asus has fewer resources in marketing and channels since it entered smart phone market

later than its competitors(eg. Samsung, Lenovo)• In 2014, Asus actively manages its phone market by releasing ZenFone, PadFone mini to

complete its phone portfolio

Hypothesis：• PadFone and PadFone mini as best solutions for those desire for big-screen and a tablet

with calling function. • Asus should devote its resources in developing channels in South East Asia for its highly-

growing GNI per capita and soaring needs of mobile devices.

Key Insight：• By cooperating with operators in Philippine, both party can reach an agreement on win-win

cooperation.• Asus creates an incentive for consumers to pay more with its competitive cloud service,• Operators can also benefit in higher profits by selling PadFone, and also be more willing to

subsidize PadFone.


Catalog

Reasons for choosing PadFone and PadFone analysis

Potential market analysis : Target at The Philippines

Potential corporation with local two dominant operators, Smart & Globe in The Philippines

Operation and budget statement

1.

2.

3.

4.


Reason : The percentage of users owning both phone and tablet grows in global market — PadFone matches the market expectation and trend

Source : Donald W.Reynolds Journalism Institute


Asus should focus on developing certain region due to limited resources

Asus PadFone

Sales

Marketing

Weak cooperation with operators and sellers because its main channels are for desktop, pc, and tablets

For Asus, phones are relatively new products, so most customers are not familiar with the phone brand.

Source : Arrange by NTUCC 1st Group

Asus should focus on channels and marketing in certain areas since it’s hard to win-over current top phone producers.

2008

2009

2010

2011

2012

S&MA expenses

Samsung Lenovo asus S&MA expenses

0 $10M $20M $30M $40M

Unit:thousand of USD


Catalog





1.

2.

3.

4.


Rapid growth of phablet shipments worldwide in 2013 and 2017

Source : Statista 2014

Asia Pacific

North America

Western Europe

Eastern Europe

Middle East

Latin America

Afraic0

50

100

150

200

250

35.118.8 22.9

2.3 2.1 1.1 0.2

203.7

87 82.8

5 4.2 1.9 0.4

Phablet shipments worldwide in 2013 and 2017

2013 2017

Sale

s in

milli

no u

nits


Asia pacific is the fastest growing area of phone users

Source: GSMA Wireless Intelligence


Tablet PC in Asia Pacific digital markets are forecasted to grow fastest

2009 2010 2011 2012 2013 2014

9% 7% 7% 8% 7% 8%

20%16% 13% 13% 11% 9%

32%37%

37% 34%31% 31%

0% 2% 10% 17% 26% 32%5% 5%4%

2%1%

1%32% 30% 26% 23% 20%17%

2% 3% 3% 3% 2% 2%

VOLUME

Laser Printing

Inkjet Printing

Notebook PC

Tablet PC

Netbook PC

Desk PC

All-in-One

Source: GfK 2013 The Digital World landscape across Asia Pacific


GDP growth in Asia Pacific is on top of the world-Asus should choose ASEAN-5 as first priority

Source: International Monetary Fund, World Economic Outlook Database

2008 2009 2010 2011 2012 2013 2014FC

-6

-4

-2

0

2

4

6

8

10

12

GDP Growth

Euro AreaASEAN-5Emerging AsiaMiddle East and North AfricaWorldChina


Asus should enter Indonesia, Thailand and the Philippines and especially focus on the Philippines

Source: World Bank Pew Reach Center 2013

GNI per capita growth (annual%)

World rank 2012

Thailand 5.9 26

Indonesia 4.9 31

Philippines 4.5 38


Instead of penetrating 3 countries, Asus should focus on the Philippines under limited resource

TelecomMarket

Thailand The

Philippines Indonesia

Source: Organized by NTUCC from Business English & Nielsen Report

15%

Growth fastest in ASEAN : 326%

23%• 236million （ Ranked 6 ）• 12 operators

SmartphonePenetration Other factors

• Multiple handset Ownership• 4.6 devices/user in Manila

• Average price of Samsung top 10 popular smartphone, tablet

• PHP$ 26,000 (NTD$18,200)

• Huge difference in scattered region (1,904,569 km2 )

• Multiethnic society (more than 5 ethics)

• Mature competitive smartphone market 49%

• 107 million （ Ranked 12 ）• 2 operators

• 69 million (Ranked 20)• 10 operators


Catalog





1.

2.

3.

4.


2. Booming demand of smartphone & Affordable 3. Trend of “ Bring your own device (BYOD)”

1. Post-paid subscriber increase

• Post-paid revenueincrease 17%(Pre-paid: 2%)

• Average Revenue Per Unit(ARPU) : NTD$810(Pre-paid: NTD$70)(Taiwan: NTD$814)

• Smartphone userincrease 11% to 53% in the City.

• 64% consider mobile device as their most important piece of technology(HK: 72%, Korea: 71%)

• Average price of top 10 popular product:NTD$8,500

Post-paid subscriber is significantly booming

Operator is boosting post-paid user to increase margin

Consumer behavior in The Philippines-Booming Post-paid smartphone user


Distribution Channel

Brick & Mortar

Operator

Retailing Channel

ASUS Store

Online distributor

Online Dealer

ASUS Shop

Comparison of distribution channel


Comparison of Bricks & Mortar-Operator with abundant post-paid smartphone user

ASUS Store

• Huge development investment

• Logistic • Marketing• Operation• HR training

• Risk of low brand awareness

• Longer time to establish branches

Retailing ChannelOperator

• Mature organized distribution channel

• Abundant customer base (Various subsidy plan )

• 2014 business goal• Increasing Post-

paid subscriber

• Mature distribution channel

Pros

Cons

• Full control of brand image

• Majority customer is pre-paid subscriber

• No incentive to purchase smart phone

• Margin control by retailer

• Strong bargaining power

Source : Arrange by NTUCC 1st Group


Niche market in The Philippines-ASUS PadFone satisfied the need of local operator

1. Decreasing ROILow ARPU in The Philippines

2. Increase marginAim at increasing Post-paid user (higher rate of mobile plan)

3. Excellent gadget to attract customer

1. PadFone is combination of smartphone & tablet

2. PadFone cloud storage service will increase internet traffic

Operator

ASUS PadFon

e

Consumer

1. Booming demand326% increase of smart phone in 2013 (Fastest in ASEAN)

2. Number of higher willing to payIncrease by 17% in 2012

PadFone attract higher value user by its function (post-paid user)


ASUS “Free Cloud Storage” service create incentive for both Operator and Consumer

Post-paidConsumer

Attract higher post-paid rate plan user

Provide better subsidy to consumer

Increase ASUS market share

Incentive

Revenue growth

Subscriber / Payment increase

Distribution Channel

Highermonthlypayment

Result

Attractive Service

ASUSCloud service

Attraction to consumerSource : Arrange by NTUCC 1st Group

1


ASUS PadFone’s Office function meets Filipino’s need

Wes

tern E

urop

e

Easter

n Eur

poe

Middle

East A

frica

North

America

Latin

Amer

ica

Asia P

acific

0%

10%

20%

30%

40%

50%

60%

70%

80%

Tablet and Smartphone Usage

Tablet for Work PurposesSmartphone for Work PurposesTablet as primary computer

Source: IDG Mobile 2013 Survey

Smartphones and tablets are considered as primary computers in Asia-Pacific

2


Catalog




Operation process and budget statement

1.

2.

3.

4.


IndustryAnalysis

Build up Hypothesis

PracticalInterview

Prove and revise

hypothesis

Operation process Currently ASUS relations with operators

No operator as partner channel*

Operator side

ASUS brand awareness concerned

Subsidy policy concerned(Premium price of ASUS)

Product didn’t meet the need of customer

ASUS side

Margin was squeeze out

Strategy of distribution channel development*Only with Smart Telecom for T100 product.


IndustryAnalysis

Build up Hypothesis

PracticalInterview

Prove and revise

hypothesis

Mobile Operator1. Smart Communications

2. Globe Telecom

Prepaid/Postpaiduser rate

ProductAdvantage

Cloud Storage Services

Survey of customerpurchasing intention

Post paid plan

Operation process Generate potential hypothesis on rolling basis


IndustryAnalysis

Build up Hypothesis

PracticalInterview

Prove and revise

hypothesis

Interviewee: • Local authorities

and salesDuration: 1day

Interviewee:• Random 30 passerbyat every type of channel

Duration: 4days

Interviewee:• Sales authorities• marketing researcherDuration: 2days

Survey on local channels• Chain 3C channels • Independent 3C channels• Operators• Local market research cooperation

• General survey on consumer behavior, purchasing habits and brand image testing

• Get information of selling condition and adversity

• Get information of online dealer's selling condition and adversity

Operation process Deeply understand the condition on supply & demand side


Mobile Operator1. Smart Communications

2. Globe Telecom

Prepaid/Postpaiduser rate

ProductAdvantage

Cloud Storage Services

Survey of customerpurchasing intention

Post paid plan

IndustryAnalysis

Build up Hypothesis

PracticalInterview

Prove and revise

hypothesis

Randomly survey in capital city, target at certain market. Also survey on product mix to understand consumers’ preference and willingness to buy

Because local operators promote post-paid, Asus can attract them by its 2 in 1 functional PadFone, better pay requirement, and Asus cloud service

Operation process-Revise hypothesis & generate win-win outcome. Localized the

optimum service and channel strategy


Summary -Our service & outcome

Goal: Penetrate The Philippines via Operator by PadFone• Conduct customer

purchasing habit & feedback survey in The Philippines

• Optimum distribution channel survey & analysis • Efficient package

service analysis

Our service• Localized optimum PadFone package service

• Plan optimum strategy of distribution channel in The Philippines


Feature Phone89%

Ｏ thers Brand95% ASUS

5%

Market share in The Philippines

Forecast revenue of ASUS

ASUS market shareIn 2014

*12 Million user(12 Biggest market globally)

Source: MIC Report,2012.

6.1 Million smart phone user (Taiwan)= 2 times of user in Taiwan


Forecast revenue of ASUS

• Market size of mobile phone in The Philippines

• Feature phone: 89% (98Million)

• Smart Phone: 11% (12Million)

• Market share of ASUS• Below 1%

• ASUS market share (in Smart phone division)

• 3-5 % (in 2014)• 360,000 unit (7.2% of 5 Million, 2014 goal)

• PadFone Series market share (10% of ASUS total smart phone market share)

• 36,000 unit (NTD$14,000/each)• Revenue

NTD$ 504 Million

Current Situation Goal in 2014

Project budget NTD$ 500,000 (0.1% of Revenue)


Industry Analysis& Build up hypothesis

PracticalInterview

Prove and revise Hypothesis Synthesize

Project Schedule- In Taiwan & in The Philippines

ASUS

Channels Custom

ers

4 days 4 days 3 days

InsightfulStrategy

Purchasing habits

Brand Preference Using experience

Purchasing intention WTP

7 days

Proportion of each

Asus Position

Channel Strategy Interview

Data Collection

Prove Hypothesis

Data Analysis

Prove Hypothesis

Data Analysis

Goal Discussion Planned STP

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