team ram ma1n0103 陳乃華 ma1n0206 anja išek ma1n0245 michel sung
TRANSCRIPT
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 2005.
In June 2005, BenQ acquired the
mobile phone division of Siemens
BenQ Acquired manufacturing
units in Germany, Brazil, and
China.
October 1st : Benq- Siemens is
one of the world's largest mobile
handset makers
THE ACQUISITION
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.
POST ACQUISITION
In early 2006, BenQ Mobile
undertook a series of cost-cutting
measures
POST ACQUISITION
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
In March 2006, the BenQ-Siemens P51, a smartphone, was launched. However, customer response to the new products was unwilling
POST ACQUISITION
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.
POST ACQUISITION
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 ?
QUESTIONS & ANSWERS
Pros Cons
• 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 ?
QUESTIONS & ANSWERS
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 ?
QUESTIONS & ANSWERS
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.