Strategic Management: Analysis of AsusTek Computer

This report analyzes the strategic management of AsusTek Computer, a Taiwan-based international computer and phone hardware company. It covers the company's strategic direction, application of models to review the external environment, competitive advantage, and strategic drift.

Strategic
Management

INTRODUCTION
Strategic management refers to planning, managing, organizing, monitoring as well as
analysing the organisational resources in order to attain objectives. This helps companies to
make effective strategies and make competitive environment. Therefore, it has been analysed
that strategic management plays very essential role in order to examine their capabilities,
opportunities, threats and many more (Doz, 2017). In this report, AsusTek Computer is chosen as
the base company which is a Taiwan based international computer as well as phone hardware
company. Headquarter of the company is located at Beitou District, Taipei, Taiwan. This is the
company which is an original equipment manufacturer. The report covers various strategies that
an organisation uses to compete with its competitors and gain competitive edge at marketplace.
Different models is discuss through which a company review the external factors that impacts
performance and effectiveness. In addition to this, mission and vision of the company is stated in
this report. Later, it covers Business Canvas Model that describes how organisations delivers and
creates value in the market.
Task 1
Strategic direction that the company has followed in past
ASUS is a successful company which has huge competition in the domestic as well as
international markets. The strategies of this company is focused on speed to market, cost and
service. These three elements hold importance. The employees are focused on providing the
quality as expected by the customers. This is to enhance the brand name in the market. In order
to achieve good brand image among the competitors, it has made a strong changes in the designs
of its products, the quality day offer as well as factors like cost and technologies have also been
considered for the same. All these strategies focused on providing higher satisfaction to the
customers so that they can retain them for a long time by maintaining their loyalty.
It majorly focuses on improving the quality through quality management processes so
that products can be manufacturer in an efficient manner. Further, it has strategy for growing
relationship with the partners, shareholders, media, consumers and rest of the stakeholders. The
main reason behind this is that every such party contributes to the success of an organisation and
it is important to maintain healthy relationship for long-term survival. Some of the other
strategies which are formulated for achieving success are as follows:

 It is fully focused to integrity on the basics and its results. one common base is important
for carrying out the activities without any errors.
 It has aim of becoming a leader in the aspect of service, speed, quality, cost and
innovation. These are important for making it a popular company along with huge
desirability among the competitors as well as customers.
 Its also focused on making contribution to the society for protecting the environment and
lifting the humanity. it is a part of companies corporate social responsibility in which it
wants to be world-class valuable contributors.
The current strategies are prepared by focusing on digital home leverages by including digital
office and digital person as it is the time for going digital. International strategies are focused on
using information technology in such a way that makes it a leader.
All of these are incorporated by making changes in the technologies used in the
computers, laptops, notebooks and many more items sold by it. The above-mentioned strategies
are transformed on the basis of changes taking place in the environment. Demands of the
customers have been taken into consideration which are based on new trends.
Task 2
Application of appropriate model to review external environment.
In the existing report, Asus company is chosen as the base business entity which deals in
various products such as laptops, desktops, mobile phones motherboards, graphics cards and
many more. Company mainly operates in the whole world and was founded in the year 1989. in
this context, managers of the company wants to examine the whole external environment so that
they will be able to know the future growth of organization. PESTLE analysis for Asus are going
to be discussed as follows:
PESTLE Analysis: In this context, managers of the company use PESTLE analysis so
that they can examine the whole marketplace in an effective manner. It has been analyzed that
external environment affects the whole profitability and performance of the company which
highly affects the growth (Foss and Saebi, 2018). Elements of this analysis discuss in an
effective manner which are as follows:
Political Factor: One of the first and most essential element of this analysis is political
factor which consist of all the regulations which is set by the legal authority of the country.

Government develop some rules and legislation which are required to be follow by every
organization so that they can done their work in an efficient manner. It has been said that
political condition is quite strong which assist the company in a positive manner. Therefore, it
will help in performing business functions in an effective manner at the competitive market
(Grunig, 2013). All the element included in the political factor need to be considers by the
management team of the company so that they can get positive result in an appropriate manner.
Economical Factor: On the other hand, it is the second element which consist of interest
rate, exchange rate along with employment rate, which represents the economic condition of the
country. With the help of positive and strong economic system it will assist in enhancing the
standard of individuals. In reference to Asus, it is said that the cost of labor within the
marketplace is high which negatively impacts upon the performance of the organization. In
addition to this, some of the most essential economic factor which are inflation and financial
crisis which may negatively impact the functions of organization. While doing business function
in an effective manner managers need to consider all the economic factors so that negative
impact can be reduced.
Social Factor: Some of the social factor consist of culture, beliefs, values, preferences
and lifestyle of individuals which might affect the whole performance of the company. It has
been said that it is an essential to offer products according to needs of consumers. Therefore, it is
important to identify the marketplace in advance in order to develop strategies and policies
effectively. In the present context of, Asus it has been analyzed that individuals required
advanced and new technology therefore, it is essential by the management team to provide
products which are high tech and innovative. Before providing any kind of products and services,
it is very essential for the management team to examine social needs and requirements in order to
gain various positive results at the competitive marketplace.
Technological Factor: Another most essential element is technology which helps in
maintaining the growth of the company at the competitive marketplace. With the help of updated
equipment’s & technology managers can easily ensure production of h featured and quality
products. In the present context of Asus, managers use advanced technology in order to beat the
competition available at the marketplace (Grunig, 2013). with the help of this, company will be
able to provide high quality product and service to the customer at the marketplace which helps
them in maintaining their sustainability for a long period of time.

Legal Factor: It is said that each and every country have their own legal rules and
policies which mainly changes on a regular basis. Each and every organization have their own
legal requirements which is developed by the government of that country therefore, managers
need to considered these requirements in an effective manner. These dynamic legal elements
might influence the overall performance of the company in both positive as well as negative
manner. This factor of PESTLE analysis is same just like political factor which is developed by
the legal authority of the country. In the present context of Asus, if all the legal factors adopted
in a positive manner it will create healthy and strong working environment. This as a result leads
to improve the productivity of workers.
Environmental Factor: It has been said that it is very essential for the management tem o
adopt all the environmental factors in an effective manner so that positive results will be
developed. In reference to the present organization which is Asus, company is facing high level
of pressure as they need to reduce the use of chemical materials while producing goods and
services (Hahn, 2013). It has been said that managers need to produce goods and services
considering all the environmental factors so that they will be able to gain positive result at the
competitive marketplace. Along with this, it will assist in maintaining long term sustainability at
the competitive marketplace.
A critical discussion of the company's competitive advantage among its direct competitors
Competitive analysis is considered as one of the most essential element used by large
number of organization. With the help of competitive analysis various benefits will be gained by
the team members of the company. In this context a framework is used by the management team
of Asus in order to know the competition level in an effective manner. This framework is
developed by the managers in an appropriate manner which are as follows:
Features/Company Asus Dell Samsung
Products Desktop, mobile
phones, laptops,
motherboards, WIFI
routers and many
more.
Personal computer,
laptops, camera,
printers and many
more.
Refrigerator, mobile
phones, TV, laptop,
personal computers
and many more.

Strengths High quality products,
unique designing and
upgraded technologies.
Allow customers to
provide top-notch
consumer services
before as well as after
sale, low operating
cost.
Strong position at the
marketplace across the
world, ecologically
friendly innovations.
Weaknesses Update their products
and services too
quickly, provide range
of products which
creates confusion
among the customer's.
Low relationship with
retailers, no propriety
technology, not being
able to attract college
going students (Hair
and et. al., 2012).
Highly depend on
Android OS and
depends on American
market.
Price Affordable prices From low to high price High medium and low
price for customers.
Digital Presence Provide products and
services on social
platform.
Sell products through
various online
websites
Different social media
platforms and official
website of the
company.
The probable industry scenarios facing the company within its existing market domains
For identifying the current market situation of organization, manager of the organization
adopt Porter's five force analysis model. It refers to the strategic management tool used by large
number of business entity so that they can examine the market position at the competitive
marketplace. Porter's five force analysis is going to be done by the management team of the
company in order to examine the current market situation in an effective manner. This is gong to
be discussed in an effective manner are as follows:
Threat of New Entrant: As per current situation electronic sector, it has been said that
threat for new or potential entrants are quite low in this sector. Main reason behind this is that the
industry requires huge amount of investment which is quite difficult for the organization. Along
with this, the technological advancement in this industry is quite huge which build difficulties for

the business organization. In Asus, organization’s managers require to develop some strategies
and policies which support them to perform their work in an efficient manner at the competitive
marketplace (Hill, Jones and Schilling, 2014).
Bargaining Power of Suppliers: As per the current market situations, it has been said
that bargaining power of suppliers are quite low and the main reason behind this is product
differentiation is very low. Apart from this, one of the reason behind this is that switch cost very
low which reduces the overall bargaining power of the suppliers. In the present context of Asus,
it has been analysed that the management team of the company can convince their suppliers
easily by forming a contract with them in near future. Along with this, with the help of suppliers
positive support managers will be to ensure that production of quality and featured products is
taking place.
Bargaining Power of Buyers: In this context bargaining power of customers or buyers
are quite high as there are large number of rivalry business organisation deal in the same
industry. In today's world, customers demands high quality products and services within
affordable price which increases the competition at the marketplace. This directly impacted the
business functions of an organisation in a negative manner and have an impact on the overall
profitability of the company. It has also been analysed that switching cost of buyers are very less
which increases the overall power of buyers at the competitive marketplace.
Threat from Substitute: It has been identified that the threat of substitute is mid to high
as there are various enterprises operate in market that offer same kind of featured services and
goods to their target customers. One of the major element in this factor is changes in technology
which increases the threat of substitute products at the marketplace. If individuals get high
quality of products and services from other company then they have the right to switch the
product as per their requirements (Hill, 2017). Therefore, it becomes more complex for
enterprise to maintain their sustainability in market.
Rivalry among the existing players: Competition level in the electronic industry is very
high the reason behind this is that there are large number of companies deals in the same
industry. High level of competition among the market is quite high which affects the whole
performance of the company at the marketplace in a negative manner. Some of the rival
companies in this sector includes LG, Samsung, HP and many more which creates competition
level intense in this industry.

With the assistance of Porter's five force model, management team of the enterprise
effectively identify the available competition along with current market position of the business
entity in an effective manner. In addition to this, it has also been said that there are various
substitutes and rivalry firm present at the marketplace that impacted the whole performance,
sales as well as profitability of the company at the market. (Hitt Ireland and Hoskisson, 2012).
this will assist the management team in order to develop policies and strategies according to the
current market situations so that they will be able to gain positive results at the marketplace.
Task 3
Analysis of strategic drift
Strategic drift- It refers to decline of competitive action which cause failure of enterprise
because company is not able to respond to the changes take place in external environment. It is a
negative term which shows the inability of an entity to fulfil its original objectives. IT results in
decline in performance due to which a company is required to make strong decisions by
formulating new strategies. In the context of ASUS, it is facing strategic drift to a considerable
extent which has hampered its business. When the company was incorporated, it created a
goodwill by providing good quality products. It has failed to include the same quality in the
goods which were manufactured with the same quality. This has affected its business due to
which it has lost a good share of market and customer base.
Mission and vision statement
Mission – Mission statement of the company is that they wish to become a major player
in information technology industry by providing innovative solutions in order to empower
employees and business work according to their potential.
Vision- ASUS constantly strives to be an integrated 3C solution provider that help in deliver in a
simply manner and help in utilise the potential of all available resources. The products provided
by ASUS reflects the best that Technology has to offer, providing outstanding performance and
aesthetics that seamlessly accommodate all lifestyles, anytime, anywhere.
For this purpose the mission is attained with support of technology and long term relationship.
Also there are different types of philosophies which are used by ASUS in order to keep the
mission and vision aligned with each other. The ways through which vision and mission are
achieved reflect that core elements are still there. It uses Technology which are latest

innovations, the quality still remains the factor of utmost importance by focusing on beings cost-
effectively, long term relationship with stakeholders such as consumers, partners etc. Is the
priority for achieving success. In addition to this, it faces the challenges without any fear so that
improvements can be done in the internal management.
The current demands in the market is for the innovation that can be used in variety of products
such as computers, laptops, phones and many similar items. Also, they should be cost effective
which can make the final product affordable for the customers. Therefore, ASUS is considering
the same and manufacturing the goods as per the demands of the consumers.
Strategic capabilities
 It has effective supply chain management for procuring raw material at low cost.
 It invest in research and development for improving the innovation.
 there are leadership theories which are obtained by the leaders in order to guide the
employees in a better manner. The focus is on customers who wish to have quality products.
Business Canvas Model- It is a tool that assist an organisation to understand the business in a
structured way. It is useful in gathering information regarding insights about the customers that
are targeted by the company. Along with this, value proportions are also decided and the
channels through which these are going to be offered. It was created by Alexander Osterwalder.
It has been used with reference to ASUS:
 Customer segments- millennials within the age group of 18-30 are the top segment.
Along with this, people earning adequate amount as well as who are tech savvy.
 Value proposition- the main products are the laptops, tablet computers, smartphones etc.
It make sure to include highest standard of quality.
 Revenue streams- advertising fees, fees from franchising and dividend revenue.
Channels- The current way of communicating as well as interacting with the customer is social
media. Along with this, personal chat box and email.
Customer relationships- there are loyalty programs for customers who have been associated with
the company for a long time and purchase the products on repetitive basis.
Key activities- ASUS carries the operation of making new products through innovation which
can provide higher satisfaction to the customers. This is to achieve success among the
competitors.

Key resources- the main assets for the company are people having the knowledge of Technology.
their expertise possessed by the individual working in the organisation as well as it has sufficient
amount of funds to invest in different units.
Key partners- It has partnership with Dell, HP and Apple.
Task 4
Possible strategies that company follow in order to defend its core business.
Porter's Generic Strategies Model: The model that explains how firms take benefits or
gain competitive edge at market place. The companies market position describes whether it is in
profit or loss (Priem and Carr, 2012). Porters model consist of three strategies that is
differentiation, cost leadership and focus. Cost leadership & differentiation are used in brad
market whereas focus and differentiation strategies is adopted in small markets. The main motive
is to assist companies to gain market share. With reference to Asus, the manager of the company
used this strategy which is mentioned below:
Cost Leadership: In these strategy companies offers the goods as well as services in the
market at low cost in order to boost the level of sales and increase its customer base. The cost
advantage mainly depends on the size and structure of the organizations (Sparrow, Hird and
Cooper, 2015). At this level, companies decided to satisfy the requirements of its consumers
with the low price. With reference to Asus, the company brings new product in the market in
affordable price that is electronic watch which attract the customers and rise its sales. These cost
leadership strategy helps Asus to capture market and increase its revenue.
Differentiation Strategy: This strategy is basically focuses on the development of
products which is creative, unique and different from its rivals in the market. People prefer and
purchase those goods which are different in the market. In addition to this, policies and strategies
are made by the upper level authorities so that they can compete in the market. Sometimes
companies make changes in their service and treat customers in a different way in order to feel
them valued and unique. In context to ASUS, the company bring new feature in its electronic
that is it measures pulse rate. This feature grab the attention of customers and influence then to
purchase watch. This will increase the demand of ASUS which automatically increase the sale of
the company.

Focus Strategy: In this, companies consider both the strategies and focusing on the niche
market. In addition to this, the organisation focuses on a particular group and create strategies
and policies to earn profits and market share. This strategy consist of two parts that is cost focus
& differentiation focus.
 Cost Focus: In this, the upper level authorities primarily focuses on internal factors of
company due to the external factors. For example, the company used this strategy to offer
products to customers at affordable and minimum price (Tan and Ding, 2015). This grabs
the attention of large number of customers and rise the profitability level of ASUS. Differentiation focus: In order to survive in the market and gain profits it is necessary
for companies to produce and offer those services and products which is creative,
innovative and unique. In context to ASUS, the company focus on differentiation strategy
and brings new feature in watches. This will capture the market and enhance its
profitability level.
From the above strategies it has been stated that ASUS should choose differentiation
strategy so that they can build large customer base. In addition to this, the company produces
electronic watch at affordable price which get the attention of so many customers in the market.
The upper level authorities brings new feature in watches in the market which is of good quality
and unique. This Will increase the profitability as well as sales of ASUS (Vogel and Güttel,
2013).
Task 5
Analysis and evaluation of resource implication
 ASUS has sufficient number of employees in the organisation who are skilled and have
the knowledge of latest technology and innovation. This is to help it grow in an effective
way. Human resource is an important asset for any organisation.
 It has adequate funds to invest in research and development for undertaking activities by
which new innovation can be developed or modifications in the existing Technology can
be done.
 It has also focused on suppliers and distributors for making healthy relationships with
them as they are the one who people who provide raw materials and make the goods
available in the stores

 It has a strong legal team who can provide valuable information about the relevant laws
that are applicable on the organisation. This is to avoid any legal consequences which can
add financial burden.
 The product range is huge which give chance to the customers for choosing one of them
which has the ability to fulfil their satisfaction. However, the marketing team should
conduct a research on finding out the latest demand and what way the company can
redesign its products..
CONCLUSION
With the help of above mentioned report, it can be summarised strategic management
plays very essential role in the overall development of the company. In this report, PESTLE
analysis is used to determine the stability in both political as well as economic system which
assist in providing ample number of benefits. It has been said that all these elements need to be
considered by the management team in an effective manner so that company will get positive
result. Apart from this, with the support of Porter Five Force model, company know the overall
market analysis so that they can develop strategies and policies accordingly. Furthermore, there
are various other factors which might affect the whole performance of the company at the
competitive marketplace.

REFERENCES
Books & Journals