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go%ernment (cheap "oans, ta* ad%antages,

go%ernment funding for 'D) Taiwanese IT industry is dynamic and

cost effecti%e

.conomic recessions  peop"e switch to

"ow price products

Current (a"" a!o%e and)

Growth in mo!i"e de%ice mar/et (ta!"ets

or mini+notes), where !rand preferences is

not so important as in the computer

mar/et

 !arriers against outside capita" harder

to attract internationa" in%estment for

e*pansion artia" "oss of contro" due to the autonomy

gi%en to '39s and &39s

Current (a"" a!o%e and)

ompetition from su!stitute products such

as ta!"ets, smart phones or weara!"es

Question 2: SWOT analysis for $M%

Strengts

 Past

.*ce""ence in !ui"ding image (core

competence) &trong !rand recognition (many we""+

/nown and "ong+standing !rands) 9ni#ue and high+#ua"ity products

5eading mar/et share

5oya" customers

=isionary and e*perienced "eadership

>e"" di%ersified in !rand portfo"io, whi"e

sti"" !eing focused on "u*ury products

(fashion, champagne, ewe"ry, etc-) &ynergy among !rands

!i"ity to attract and retain the !est

ta"ented emp"oyees wor"dwide !y

attracti%e career de%e"opment group of sma"" si?e companies  a!"e

Wea!nesses

 Past 

igh cost structure

.*pensi%e

5ow producti%ity due to 6handmade7

method 5ess in%ested in ewe"ry watches !rands

than competitors "i/e 'ichemont rnau"t was often o%erconfident in

himse"f (which "ed to the e%ent in which

inau"t and Gucci secret"y teamed up  

inau"t too/ o%er Gucci with 40@ of

GucciAs e#uity)

Current (a"" a!o%e and)

artia" "oss of contro" due to the autonomy

gi%en to each !rand

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to react #uic/"y to the changing demands &hared departments (audit, IT, "ega",

'D, etc-)  reduce costs, dup"ication

and a%oid o%er"apping products

O""ortunities

 Past

5arge mar/et for "u*ury products

Increasing interest in ;ashion of not on"y

women !ut a"so men

Current (a"" a!o%e and)

.merging mar/ets with rapid"y rising

income such as 3'I countries

Treats

 Past 

Intense competition in "u*ury industry

;a/e products

Increase of materia" prices ("eather, cotton,

etc-) ;< ris/ due to g"o!a"i?ation and import of 

materia"s ;inancia" downturns  peop"e ha%e "itt"e

money it can hurt "u*ury industry %ery

 !ad"y

Current (a"" a!o%e and)

ompetition from su!stitute products (.*:

smartphones and weara!"es is rep"acing

the traditiona" watches)

Question &' Co("are an) *ontrast te GO+A E,-ANSION STRATEGIES of A*er an)

$M%

 

Si(ilarities

1' +ot are un)er "ressure to go glo.alcer:

&ma"" domestic mar/et (Taiwan is tiny)  must go g"o!a"

5=:

Domestic mar/et is saturated  must go g"o!a"

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2' +ot en*ourage )e*entrali/ation:

cer:

Gi%e much anatomy to its o%ersea su!sidiaries-

&hih a"so de"egates much of his power to his emp"oyees-

&ets up '39s and &39s and gi%es them anatomy-

5=:

Di%ides its !usiness into B groups- .ach group is a"most independent from others, which

ena!"es them to de%e"op their own strategies- rnau"t a"so gi%es much of his power to his emp"oyees (6gi%e them free hand to do their

things7)

&' +ot "refer s(all .usinesses

cer: tries to /eep its o%ersea su!sidiaries sma"" and managea!"e-

5=: ac#uires sma"" companies with high grow potentia"-

0' +ot *o("anies lea)er are illing to ta!e ris! in or)er to e3"an) glo.ally'

cer:

&hih too/ ris/ when forming a "ot of o%ersea oint %entures, of which many was ris/y !ut

generated "arge profit for cer 

5=:

5i/ewise, rnau"t too/ ris/ when he ac#uired companies with dim futures, !ut "ater turned

them into "eading !rands-

4ifferen*es

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A*er

.*pand g"o!a""y through organic growth and

forming o%ersea joint ventures.

Crganic growth:

;ocus on its core competences which are

designing and manufacturing computer 

hardware- .mphasis on 'D to create many

inno%ati%e hi+tech products-

oint %entures: cer forms a "ot of western

 oint %entures and a""iances

cerAs share as we"" as image awareness

in "oca" strategic mar/ets- .sta!"ish its internationa" networ/-

5o*us

;ocus on hi+tech hardware with afforda!"e

 prices suchas "aptop, fa* machines, chips, etc-

$M%

.*pand g"o!a""y through ac#uisition of "u*ury

 !rands- owe%er its strategy is to !y sma""

 !usiness with high growth potentia" rather 

than !ig one-

&ma"" companies can adapt and response

#uic/"y to changing en%ironment- It a"so has a we""+di%ersified !rand

 portfo"io with B product "ines-

-ro)u*t fo*us

;ocus on "u*ury products such as "eather

goods, champagnes, perfumes, etc-