1. BENQ’s Deal of the century?
International Marketing
STUST

2. FOCUS NANTAI

3. 1. INTRODUCTION
BENQ is a Taiwanese firm It is a consumer-electronics maker.
The company’s core products include:
-Flat screen TV sets.
-Notebooks.
-PC monitors.
-MP3 players.
-Mobile phones.
-Other consumer electronics gadgets.
The meaning of BENQ is “Bringing Enjoyment & Quality to life”.
BENQ worth $5.5 billion.

4. 1. INTRODUCTION 37% of BENQ’s sales carry the BENQ brand name.
In 2002, BENQ represents 9% of market share in global handset sales.
BENQ is the world’s 4th largest cellular-phone maker By acquiring the ailing handset division of Siemens AG (German conglomerate):
-The rights to the Siemens trademark for 18months.
-Co-branding rights for 5 years.
-It also gain access to Siemens intellectual property.
-Transfer of technology.
-Gain new market/prospect/outlet Access to Siemens customer base in Europe & Latin America.
Siemens agreed to buy 50 million euros of BENS stock.

5. 1. INTRODUCTION
Limits: BENQ has a little brand name recognition in Europe & in the US.
Solutions: combine BENQ & Siemens share market!
Siemens has a brand equity:
 The value of having a well-known brand name, so can generate more money from products with that brand name than from products with a less well known name.
Siemens has also a brand heritage/legacy:
 an asset in building long term brand reputation.
One of the core competencies of Siemens is BRANDING!
BenQ-Siemens is positioning its products as a “new stylish metallic slider for successful young people” based on one’s life & irresistible aspiration to achieve success.

6. 1. INTRODUCTION
Competitors & market leader 60% of the worldwide handset market:
-Nokia
-Kyocera.
-Motorola.
-Samsung.
-Sony.
-LG.
Other industry leaders:
-HP.
-Dell.
-IBM.
-Acer.
-Asus.

7. 2. CURRENT SITUATION Strength Weakness Opportunities Threats
Economies of scale.
Large market share in certain sectors.
Expert in Branding.
Strength
Weak branding.
Low visibility in global brands.
Weakness
Industry consideration, bigger gets bigger, smaller are driven out.
World is recovering from recession.
Established operations in China (can expand to different provinces in China).
Opportunities
Intensive competition for commodities.
Design & Awards are easily copied with faster production.
Threats

8. 3. QUESTIONS
1) How do you evaluate BenQ’s acquisition deal of the Siemens handset unit? Is it indeed “too good to be true”? What are the pros & cons?
Acquiring another company is a common move for larger businesses that want to expand their own operations, reduce the likelihood of competition and adopt new skills or resources that they otherwise would not possess.
However, acquisition also has its downsides, especially when it comes to costs and the price of combing two similar companies. Acquisition is typically associated with leveraged buyouts and forced sales instead of more benign mergers.

9. 3. QUESTIONS
PROS
Increased Revenues  A primary benefit to acquiring Siemens is the increased revenue than BenQ can enjoy. Siemens operates in a different market (Europe, Latin America & US) or creates a markedly different product or service. The acquired organization (Siemens) can maintain operations and direct its earnings toward its new parent company, allowing for greater earnings reports overall. Revenue may also be gained by the sale of assets of the acquired company.
Increased Skills and Market Impact  When BenQ acquires Siemens, it also acquires (when successful) the efficiencies and experience of that company, which allow the business to benefit from core competencies it did not have before. Also, competition in the market is reduced overall. BenQ receives the portion of the market that the acquired business had.

10. 3. QUESTIONS
PROS
The cost of acquiring Siemens company is very favorable.
Acquisition is a great way to instantly increase BenQ’s sales and revenues.
It provides an access to new markets (Europe, US, Latin America, China and developing markets).
BenQ successfully expand its brand portfolio on the marketing side, while providing improved efficiencies and economies of scale on the business operations side. It is a real win-win.
Transfer of technology (Research facilities).
It gain intellectual property.

11. 3. QUESTIONS
CONS
Normally, the costs of acquiring another organization is high, but is this case, it’s not.
Stock and company value may be worth a certain amount at acquisition but fall afterward because of the acquisition itself.
Other costs may be pushed higher to retain talented employees who would otherwise leave.
Costs for business debts and supplier orders may be included.
Expenditures for the acquisition can be very high and may lead to a loss.
Hostile takeovers can reduce overall company goodwill and may result in the loss of customers that both companies previously had. Redundancies can lead to firing many employees in order to save on costs, resulting in the loss of talent and the disruption of company cultures and partnerships that would otherwise have benefited the organization.

12. 3. QUESTIONS 2) Where is BenQ’s vulnerable?
The vulerability of BenQ is that Siemens has provided no guarantees to BenQ about the profitability of the handset business.
Another vulnerability is the competitors such as Nokia, Motorola & Samsung.
There is a risk that Siemens could wipe out BenQ profits.
BenQ has little brand name recognition in Europe & in the USA.
Weak branding.
Low visibility in global brands.

13. 3. QUESTIONS
3) What strategic marketing recommendations would you make to BenQ’s going forward?
To create desire and awareness about the BenQ & Siemens brand.
To keep on developing their target population  successful young people.
Better cost-benefit alternatives for marketing. They can use magazines, online blogs & social networks.
Target the audience that would be more receptive to BenQ’s products.
Continue focusing on its core profitable business of projectors, monitors & SPC business units (scanner, printer & copier).
To have a clear brand management strategy.

14. 3. QUESTIONS
Service-based branding  should focus on improving customers satisfaction in service centers.
Faster service turnaround time than industry average with world class quality.
To keep on globalizing its operations with focus on China.
To keep on developing the profitable business of hospital (Nanking & Suzhou).
BenQ have well-established consumer electronics & can build on that expertise.
The best way to leverage BenQ’s existing competitive quality is branding, continue promoting BenQ globally.
Additional resources should be deployed on the expansion into China & developing countries (BRIC) leveraging on subsidiaries competitive advantages.
Develop Brand name recognition in Europe & in the USA.

15. Thank you!