ASUSTeK Computer Inc. which is commonly known as ASUS is primarily a computer, communications and consumer electronics solutions company. ASUS is headquartered in Taipei, Taiwan and operates in about 32 countries. ASUS has a revenue of about $ 16000 million.
Strengths in the SWOT Analysis of ASUS :
- Brand Image and Recognition: ASUS has been recognised as one of Taiwan’s top performing international brands. ASUS receive a record high 4326 local and global awards in 2014. It also featured in the world’s most admired companies in 2014 by fortune magazine. The Strong brand image provides the credibility to the company which helps the company to deliver sustainable business growth.
- Strong Market Share: ASUS is among the top five players in the PC market with about 7.6 percent market share, in addition to that, it has a significant market share in the motherboard segment too.
- Strong In-house manufacturing: ASUS has vertically integrated operation into various subsidiaries to manufacture components. It also has an integrated supply chain operations. This allows ASUS to reach faster to the market and also superior capabilities of development.
- Deep Product portfolio – A fantastic advantage of ASUS over its competitors is its product portfolio. It has a complete range of products which are known for its in depth product line and product depth as well. For example – The combination of products in ASUS are Desktops, Laptops, 2-in-1’s, All in One PC’s, portable monitors, sound cards, media receivers and many other such IT and technology related products.
- Cost advantage – Because of its massive production capacity and because of its usage of economies of scale, ASUS has cost competitive advantage over its competitors. Moreover, this advantage is sustainable because Asus will only increase in size and distribution capabilities with an increase of electronic consumption across the world.
- Environment conscious – This is a rare feature in electronics and computer company but ASUS is known for its eco friendly operations. The company is known to launch the initiative GREEN ASUS in 2000 which led to company wide eco friendly measures to be implemented. Besides this, the company also took part in “recycling for a better future” a campaign where they recycled old computers and refurbished them and ultimately donated them to 122 schools as completely new machines.
- R&D Focused – To be a cost leader, you have to have a continous grip on the latest technology. You have to break ground and create better products at lower cost. Hence, it can be safely said that ASUS is a R&D focused company and its major focus lies in creating better products for its consumers day by day.
Weaknesses in the SWOT Analysis of ASUS :
- Lack of Scale: Although ASUS has fantastic manufacturing potential, distribution is not upto mark. In comparison with its major competitors such as IBM, Lenovo and Apple. ASUS’ revenue is about $ 16000 million which is about 30 percent of Lenovo’s revenue, 15 percent of IBM’s revenue and about one-twelfth of Apple’s revenue. ASUS’ lack of scale may affect its ability to compete with its competitors.
- Poor Marketing – Asus lacks marketing skills like those of Apple or even Lenovo. While Apple is a legend in Marketing, Lenovo also regularly takes part in branding itself through differentiating its products as well as through its marketing communications. However, such differentiation efforts are found to be absent in ASUS.
- Controversies – Asus lost a major legal case in 2016 which affected its brand equity adversely. Asus was found to have vulnerabilities in its softwares which were loaded onto their hardwares. This information in fact was publicized when ASUS was running a campaign of Wifi’s and other electronic devices on television. As the privacy of people was affected, ASUS brand equity was adversely hurt.
Opportunities in the SWOT Analysis of ASUS :
- Growth in the smartphone market: According to industry experts, smartphone shipments are about to grow at a CAGR of 13% till 2018. Furthermore, the demand for tablets is also ever increasing, expected to grow at about 7% CAGR. The strong outlook in the future will definitely increase ASUS’ sales. The ASUS zenphones have been a hit.
- Chromebooks – The ASUS chromebooks are being loved by chromebook enthusiasts as the chromebooks are sleek and stylish and at the same time they get the work done. ASUS has been an early adopter of the Chrome OS and has used the same to make the Chromebook.
- Growth in disposable incomes: In the emerging nations, internet penetration has increased and so has disposable incomes. People are more aware of technological devices now and hence ASUS can take advantage of its presence in such countries.
- Growth in Internet of Things and Cloud Computing market: ASUS can take advantage of the advent of the internet of things and growth in the cloud computing market. ASUS offers cloud services as well as IOT solutions with a pragmatic approach to the benefit of the customer. Thus, the growing market would contribute positively to the company’s growth.
- Differentiation and Marketing – The two ways that ASUS can increase its market share even further and make itself more sustainable is by differentiating its business offering through marketing and therefore increasing customer loyalty and customer satisfaction. To do this, it needs to involve its internal customers such as dealers and distributors and build good relations with them as well.
Threats in the SWOT Analysis of ASUS :
- Decreasing demand for PC, Laptops and Notebooks: The Global demand for PC, Laptops and Notebooks are expected to decline at 2 percent CARC till 2018. This can adversely affect company’s top line.
- Competition: ASUS faces intense competition in the computer markets from some of the industry giants like IBM, Apple etc. whereas it also faces stiff competition in the smartphone and tablet market with existing as well as new local and global entrants.
- Declining profit margins – As the competition increases, the major pricing strategy which is used by all competitors is penetration pricing, as a result of which the profit margins decline for all the players involved. As ASUS is not differentiating itself, the decline in profit margins is expected to be profound over the years.