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