TEAM RAMMA1N0103 陳乃華MA1N0206 Anja IšekMA1N0245 Michel Sung

CASE PRESENTATION

QUESTIONS&

ANSWERS

AGENDA

AGENDA

CASE

PRESENTATION

QUESTIONS&

ANSWERS

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

The first BenQ Siemens brand mobile phones were unveiled in January 2006.

POST ACQUISITION

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

AGENDA

CASE PRESENTATION

QUESTIONS&

ANSWERS

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.

THANK YOU FOR YOUR ATTENTION