ASUSTeK SWOT Analysis

11/12/2011

11/12/2011

SWOT Analysis of ASUSTeK Computer Inc.
Section I – Organizational History

ASUSTeK Computer Incorporated is an award winning multinational computer electronics manufacturer. Founded in 1990 by TH Tung, Ted Hsu, Wayne Hsieh, and MT Liao on April 2nd 1990, ASUSTeK is now reaching its 22nd year of business. ASUSTeK has manufacturing plants in several locations around the globe, including Taiwan, China, Mexico, and the Czech Republic. “ASUS, the world’s top 3 consumer notebook vendor and the maker of the world’s best-selling and most award winning motherboards, is a leading enterprise in the new digital era. ASUS designs and manufactures products that perfectly meet the needs of today's digital home, office and person, with a broad portfolio that includes motherboards, graphics cards, optical drives, displays, desktops, Eee Box and all-in-one PCs, notebooks, netbooks, tablet devices, servers, multimedia and wireless solutions, networking devices, and mobile phones. Driven by innovation and committed to quality, ASUS won 3,398 awards in 2010, and is widely credited with revolutionizing the PC industry with the Eee PC™. With a global staff of more than 10,000 and a world-class R&D team of 3,000 engineers, the company's revenue for 2010 was around US$10.1 billion.” (ASUSTeK Computer Inc., 2011) ASUSTeK has been known to pioneer many new technologies that become prevalent in computer technology of this generation. The organization has a strong tie to its care for the environment and boasts a great corporate social responsibility. The organization itself is very atypical of most Western organizations. It focuses on five virtues within the organization, those five virtues being humility, integrity, diligence, agility, and courage. “With over 420 million motherboards sold since 1990 and one in three computers housing and ASUS motherboard, it is no wonder why ASUS commands almost 40% of market share of the motherboard business and has become the number one motherboard manufacturer in the world.” (ASUSTeK computer Inc.)

Mission Statement:

“As a major player in the IT industry, ASUS’ corporate mission is to provide innovative IT solutions that empower people and businesses to reach their full potential. ASUS’ philosophy behind product development—which is to accomplish the fundamentals well first before moving forward—has resulted in a dependable backbone of computer components such as motherboards, graphics cards, and optical storage devices.” (ASUSTeK computer Inc.)
Section II – Strengths and Weaknesses

ASUSTeK has several major strengths inside its organization. Being limited to only two strengths I chose to go with Innovation and GreenASUS. ASUS is known to be the leader in innovation in computer design, motherboard, and notebook technology. Their slogan is “Inspiring Innovation. Persistent Perfection” and it is one that boasts well for them as their innovations have been leading the way in computer technology for quite some time now. Another one of ASUS’s major strengths is their GreenASUS Corporate Social Responsibility. Their dedication to the environment and sustainability is amongst the top ranks of corporations in the technology industry, if not the best.
Strength #1 – Innovation: ASUS’s innovation puts them at the forefront of motherboard and notebook technology. With their advances in technology for these products it’s put them as the catalyst of brands pushing them to the #6 brand in notebooks sold in 2010 and the #1 motherboard manufacturer in the world six years in a row. (ASUSTeK Computer Inc., 2011, p. 58) Their technological innovations push the envelope for energy savings, low power-consumption, thinner lightweight products, and worldwide technology firsts.
“ASUS was the first to pioneer the 16+2 Phase Power technology. This 16+2 allows the hardware power regulation to provide genuine power efficiency, up to 96% over competing products.” (ASUSTeK computer Inc.) For those who don’t understand phase power, what this does is allows the motherboard to draw less power and operate at lower temperatures without sacrificing anything in terms of performance. When you can increase power and reduce temperatures you are receiving faster performance with longer life or longevity of the components which run the computer.
ASUS is the first to utilize the critically acclaimed EPU or Environmental Processing Unit. The EPU is a secondary processor that is attached to the motherboard and controls six of the major components. “ASUS’ exclusive EPU is a hardware-based feature that controls six major components: the CPU, VGA card, memory, chipset, hard drives, and the CPU cooler/system fan. Equipped with a database containing all of the Intel CPU profiles, the EPU intelligently identifies and selects the correct profile and calibrates the optimal settings to ensure the best power management.” (ASUSTeK computer Inc.,) This processor intelligently pinpoints the optimal setting to reduce voltage and the amount of watts desired to run all six components. Again, like the Phase Power technology, this lowers temperatures, increasing longevity of the purchase, saves users on energy bills, and reduces carbon emissions. The program inside the operating system tracks the amount of carbon emissions saved while the EPU is running totaling up all carbon dioxide emissions saved by the feature of this unit.
The first ever motherboard to feature dual intelligent processors was designed by ASUS this year of 2011. (ASUSTeK Computer Inc.) This same series of motherboards houses the world’s first True USB 3.0 + SATA 6/Gbps motherboard, the P7P55D-E Premium. (ASUSTeK Computer Inc.) "USB3.0 becomes [the] global standard for new generation digital data transmission. In addition to have the motherboard converted at once, ASUS has True USB 3.0 released comprehensively by leading technology that is ten times faster than USB2.0 and it is easy to share, download, and make backup[s]. It is with twice of [the] bandwidth and 34% more effective than other USB3.0 solution." (ASUSTeK Computer Inc., 2011, P. 63) The TPU or Turbo V processing unit allows users to automatically perform faster in CPU intensive processes while auto accelerating the system at an optimal and stable level to avoid crashes. The TPU was shown to make the system 37% faster than default settings on Core i3-530 2.9GHz processors. With the TPU combined with the EPU it forms the dual intelligent processor motherboard combination. The EPU on this system was show, when enabled, to decrease the energy consumption of this system from 194 watts, to 108 watts, a significant energy savings of 80%.
All three of these items are considered strengths due to the fact that ASUS has been “Persistently Perfecting” them, so to speak. I used their slogan to show why this statement backs up the idea that these are distinctive competencies. As ASUS exclusive technology, the EPU, TPU, USB3.0, and 16+2 were first engineered and now being persistently perfected as time continues. This exclusive technology giving them a competitive advantage compared to other organizations who haven’t yet engineered this technology. These technologies provide brand name recognition as they are exclusive features to the brand. This brand is known for creating innovate products before all other competitors. These distinctive competencies can soon become sustained competitive advantages if no other manufacturer is able to obtain the same innovations within the next few years.
Strength #2 – GreenASUS Not only does ASUS focus on products that will save energy for the users while increasing the power of its components, but they also have the fundamental goal of energy saving during the processes of production; before the product even hits the shelves. With energy efficiency in mind they have also developed the EPU to smartly and instantly detect loading and save energy by supplying it efficiently. “ASUS produced the world’s first lead-free and Halogen free motherboard as well as the first Halogen free full HD monitor.” (ASUSTeK Computer Inc.) “ASUS’s inspiring innovation and persistent perfection has led them to become the world’s first notebook manufacturer to receive the EPD and the EU Flower Eco certificates.” (ASUSTeK Computer Inc.) All new exclusive technology of ASUS has sustainability in mind as they begin designing and they keep in line the idea of environmental conservation as they continue manufacturing, packing, and processing. This green sustainable mentality has lead ASUS to become an award winner at the 2011 ENERGY STAR Award Ceremony for its Energy Efficient Product Design of its signature Super Hybrid Engine and Green LCD technologies. (ASUSTeK Computer Inc.) This strength of ASUS in terms of the GreenASUS is a distinctive competency due to the fact that they put energy savings in to mind when designing products. When you purchase a notebook computer from ASUS you are confident in knowing that it was designed to be easy to reuse, recycle, disassemble, and improves battery time to the industry’s highest battery life ever. Even the process of creating the product was lead and halogen free. ASUS goes beyond legal compliance, where other brands only meet the legal limits. This green sustainable strategy is something that it utilizes much more than any of its competitors. They’ve gained a competitive advantage in the green computing era and practically pioneered the new era of green computing with world’s firsts in terms of green manufacturing and have made all products they produce RoHS compliant in product and packing aspects. Weakness #1 – Advertising/Weak Brand Name Strength

Advertising presence is something that ASUS has very little strength in at the moment. To outsiders of the brand recognition is almost met with bad judgment from a name of ASUS compared to such more familiar names like DELL, Hewlett-Packard, Samsung, Toshiba, and SONY. However, customers or consumers may not be aware that the brand is considered one of the best, if not the best manufacturers of notebook computers. Most people aren’t willing to purchase away from their familiar brands that have they already know and trust to take a chance on something new and unfamiliar. I feel that with a stronger advertising presence on national television stations ASUS can transform their image and strengthen or negate this weakness of the brand name image and recognition. Once they reach a positive status in the minds of customers as a familiar face or a customer friendly brand name, subconsciously, when a friend purchases one it gains more exposure and more strength in its market presence. The more exposure for this organization inside the United States could excel this brand above all competitors to become number one in the world of notebook manufacturers. I’ve found a few promotional high points that could be used as selling tactics versus other brands. The energy efficiency, power consumption, speed, power, and low malfunction rates over time are strong advertising strengths to pursue against competitors.
In all of these comparisons they are beating competitors in benchmark tests for performance, battery life tests, and malfunction rates over 2 and 3 years against well-known brand names such as Apple, DELL, Hewlett-Packard, Toshiba, and DELL’s subsidiary- Alienware, that is dedicated to gaming. “…ASUS and Toshiba come out on top. With 3 year malfunction rates forecast to be under 16%, laptops from these two manufacturers are nearly 40% more reliable than Hewlett-Packard, the worst performer in our study.” (SquareTrade, 2009)If ASUS makes an aggressive push towards marketing their strengths, they have the ability to take the mainstream American market by showcasing they are truly a better brand that hasn’t had enough exposure to be well respected, considered, proven, and tested to be better than all others competitors. Weakness #2 – E-Commerce

The second weakness I would like to pursue in this SWOT analysis is their lack of a presence in e-commerce. The ASUS website does not allow customers to purchase ASUS notebooks, motherboards, netbooks, graphic cards, all-in-one pc’s, displays, or networking devices; it simply acts as an informational tool, or guide, to purchasing their products. You still have the trouble of tracking down a retailer that has the specific product you want. Competitor’s websites are allowing full customization from original parts which has the ability to upgrade from each specific model and add extra memory or a faster processor, allowing full customization through online sales. ASUS doesn’t need to implement customization, but it does need to compete in this area to be viable in the U.S. market where E-Commerce is highly popular. “U.S. E-Commerce sales totaled $165.4 billion in 2010, which was an increase from 14.8% in 2009, according to estimates from the U.S. Commerce Department.” (Enright, 2011) There is a very lucrative market to be pursued in the E-Commerce business area. China’s E-Commerce sales also saw increases in 2010 by an increase of 22%. “China’s online shopping market is expected to surge over the next several years and could reach 2 trillion renminbi, or $315 billion, by 2015, according to research by Boston Consulting Group”. (Chang, 2011) Adding the connectivity of an online retail center through E-Commerce provides a more direct route to the products and makes for quicker buying decisions rather than having to be forced to shop at other competitor’s websites, online retailers like Amazon.com or BestBuy.com, or inside technology stores such as BestBuy and OfficeMax. The only way to minimize this weakness is to create the online selling distribution centers, shipping centers, or find some way to integrate E-Commerce into their company sales. I feel that a whole new aggressive marketing and advertising campaign could be started with this idea.

Section III – Opportunities and Threats

Two of the major opportunities stem from the growth of the tablet computer; and the rise of the market trends in computer and computing preferences. There is an ever-growing trend towards tablet and mobile devices also known as smart phones. There is also a newly developed market for Cloud Computing. This market is growing very hastily and has proven to be a successful market for companies such as Motorola, Apple, DELL, and even Google. The biggest threats to the organization stem from exchange rates in foreign markets and Taiwanese Stock Exchange or TWSE. Opportunity #1 – Growth of the Tablet The growth of the tablet is on the rise. The tablet has been at the forefront of consumers’ minds lately. Portability of a lightweight device that uses touch input or stylus input for mobile web browsing, e-mail, and communication is a growing trend in the computer manufacturer market. There are several brands on the market now and it is a great time, if not a perfect time for ASUS to take advantage of a new market[s]. ASUS is releasing their Eee Pad Transformer tablet that is set to rival the iPad 1 and 2 late this year around holiday season. “ASUS has unveiled its latest Tablet offering called ‘Eee Pad Transformer Prime’ (rumors about the tablet have been doing the rounds for some time now). The Transformer Prime is the world’s first Tablet to feature Project Kal-El, NVIDIA’s next-generation quad-core Tegra 3 mobile processor, which the company claims will deliver never-before-seen levels of performance with low power consumption.“ (Rai, 2011) The tablet war is full effect and I believe that ASUS will have great competition with Apple’s iPad 1 and 2 this holiday with the release of the new Eee Pad. The Eee Pad is expected to be the fastest tablet on the market (pictured left). Once again, ASUS will be first to market with the first Quad-Core tablet computing device. This is giving them a huge opportunity to trump the cult like following that Apple customer and connoisseurs have had in their minds for years. Opportunity #2 – Strategic Partnerships

ASUS has partnered with Microsoft to provide the internal workings of the Windows Phone 7, a touch screen smart phone, the first of its kind unique to Microsoft. There is an opportunity to gain recognition in the market by creating a buzz around the well established brand name Microsoft. By partnering with Microsoft, ASUS has a chance to show itself to the world that it not only makes great computers, but that it has strengths in other technological device areas. Another strategic partnership is in place with the Eee Slate tablet device. The first opportunity I talked about deals with the Eee Pad Transformer; a tablet that has many capabilities not yet reached by any other tablet device. It comes paired with a Bluetooth keyboard for the option of typing instead of typing through the touch screen. It also comes with a stylus giving you the ability to sign documents, draw, or write, instead of typing. It gives the option to stand vertically or horizontally for a wider viewing angle or a taller viewing angle. The product can be viewed here http://eee.asus.com/eeepad/slate/features/. The biggest idea here behind the partnership, is that this device comes paired with the Windows operating system. Unlike the Eee Pad Transformer, which runs an Android operating system Honeycomb, the familiarity of the brand Microsoft Windows comes into a tablet form for the first time. This product is set to launch again in December of 2011. "The Transformer Prime, with its quad-core silicon and tasty OS, has rightfully garnered much attention lately. A PowerPoint deck detailing ASUS' Q3 earnings now gives us a peek at its Eee Pad strategy -- confirming the aforementioned Prime's November 9th release date, while also promising two more bot-powered slates in the first quarter of 2012. Of course, ASUS isn't putting all of its eggs in the Android basket, as the same slide reveals that the Taiwanese firm will be getting its first two Windows 8 tablets to market by this time next year." (Gorman, 2011) This is another huge opportunity to be able to gain strong distinction and brand name recognition without the cost of advertising. Being partnered with Microsoft, a giant in the industry, they gain the ability to get more mainstream media recognition in the upcoming years and leading up to the Windows 8 movement. "According to ASUS Q3 earnings presentation, Asus is planning to launch two Windows 8 based tablets in third quarter of next year. Asus will be a leading partner for making Windows on ARM alliance and will start selling devices from Q3’12. Asus will focus on innovation by aggressive attack strategy to capture mind and market share." (Kandel, 2011) Threat #1 – Taiwanese Stock Exchange (TWSE) Seeing that ASUS is a multinational corporation, its foundation is based in Taiwan, meaning that its stock is only available through the TWSE. Due to the limited recognition of this company, exposure to more financial revenue from stock becomes a threat to this company. This threat comes from the Economic Dimension of the General Environment. It is only considered a threat because the company is not listed on the NYSE. If the company was able to be more diversified and open to listings on the NYSE it would have negate the threat of the fluctuation of the TWSE markets. Threat #2 – Global Exchange Rates

The second threat stems again from the Economic Dimension within the General Environment of this company. As a multinational corporation based out of Taiwan, global exchange rates drastically affect the company in all matters of day to day business, whether that business is with suppliers, subsidiaries, distribution centers, or warehousing. "The significant fluctuation of exchange rates in both directions has affected exporting business negatively." (ASUSTeK Computer Inc., 2011, p. 65) It’s hard to control this aspect of global multinational corporations. When markets are in good standing in China and Russia, the markets in America may be slowing down; it’s hard to predict when these changes are going to happen. Knowing that ASUS has headquarters in different areas of the world, I think finding the best fluctuation of exchange rates for both directions will help the business when exporting, instead of affecting them negatively. "ASUS grows significantly in both business operation and organizational structure; therefore, it is crucial to improve the management effectively." (ASUSTeK Computer Inc., 2011, p. 66) Businesses can’t wait to export, we live in a fast paced digital world and the only way I see to be able to fix this threat is to open up more sales channels, improve on management efficiency, and develop the organizational structure stronger.

Section IV – Summary

In my final statement of this SWOT analysis, I believe there is a bright future for ASUS to come to the forefront of the digital era as they consider themselves in this position already, or close to achieving it. With the rise of the tablet computer from Apple worldwide, from China to the United States, ASUS has a chance to capitalize on the first to market strengths and inspiring innovations they take pride in with their devices and peripherals. As long as ASUS continue to innovate in areas that haven’t been done before in these new markets, such as tablets, ASUS can gain strength amongst the competition and exceed them in market share of not only notebooks and netbooks, but tablets too. With the strategic alliance by partnering with Windows and Microsoft, the future opportunities for ASUS in the next year of 2012 and the release of Windows 8, gives ASUS an opportunity to come out ahead and more prepared than the competition in the newest operating system devices with even more first to market products to increase stakeholders value.
There are threats that need to be measured carefully though. When dealing with Taiwanese currency it may be hard to predict market trends in different areas of the world and to have the knowledge of the fluctuation when dealing with exchange rates globally. If ASUS can do its best to neutralize the global exchange rate issues or diversify into other stock exchanges, it has the ability to minimize this threat to a much lesser threat than it currently is for this organization.
References
ASUSTeK Computer Inc. (2011, April 21). ASUSTeK computer inc. 2010 annual report. Retrieved on November 12, 2011, from http://www.corpasia.net/taiwan/2357/annual/2010/EN/2010 annual report in English_BagG4ynHEGtD_5dgIyjpNELHA.pdf
ASUSTeK Computer Inc. (n.d.). Retrieved on November 12, 2011, from http://www.asus.com/About_ASUS/Marks_in_History_ASUS_Motherboards/
ASUSTeK Computer inc. - motherboards- asus p7p55d-e premium. (n.d.). Retrieved on November 12, 2011, from http://www.asus.com/Motherboards/Intel_Socket_1156/P7P55DE_Premium/
ASUSTeK Computer Inc.. (n.d.). Retrieved on November 12, 2011, from http://www.asus.com/About_ASUS/GreenASUS/
SquareTrade. (2009, November 16). 1 in 3 laptops fail over 3 years. Retrieved on November 12, 2011, from http://www.squaretrade.com/htm/pdf/SquareTrade_laptop_reliability_1109.pdf
Enright, A. (2011, February 17). E-commerce sales rise 14.8% in 2010. Retrieved on November 12, 2011, from http://www.internetretailer.com/2011/02/17/e-commerce-sales-rise-148-2010
Chang, A. (2011, November 11).China’s e-commerce market could surpass u.s. by 2015. Retrieved on November 12, 2011, from http://www.bostonherald.com/business/general/view/20111111chinas_e-commerce_market_could_surpass_us_by_2015/srvc=home&position=recent
Rai, A. (2011, November 10). Asus unveils eee pad transformer prime; first tablet with quad-core processor. Retrieved on November 12, 2011, from http://techcircle.vccircle.com/500/asus-unveils-eee-pad-transformer-prime-first-tablet-with-quad-core-processor/
Kandel, P. (2011, October 31).Couple of asus windows 8 tablets coming in q3 2012. Retrieved on November 12, 2011, from http://microsoft-news.com/couple-of-asus-windows-8-tablets-coming-to-q3-2012/
Gorman, M. (2011, October 31).Asus' eee pad plans: Transformer prime landing november 9th, two win 8 tablets coming in 2012. Retrieved on November 12, 2011, from http://www.engadget.com/2011/10/31/asus-eee-pad-plans-transformer-prime-landing-november-9th-two/