Marriage and divorce in mobile phone industry
2 big news happended in mobile phone industry recently went to marriage and divorce! after one year's consolidation, Benq failed to turn siemens mobile phone business profitable. and Benq had to retreat from this marriage. after Benq's divorce, CEC married philips mobile phone sector soon. so interesting! the common between these cases is about business globalization.
there are lots of articles analyzing Benq's globalization failure and many observers worried about the future of CEC's marriage. but from my point of view, there are fundamental differences on these 2 cases.
1) M&A scale and impact on corporate strategy are totally not comparable:
Siemens mobile phone business is a very large business with thousands of employees and spread all over the world. but philips mobile phone business has only 250 employees or so and mainly locate in hongkong&china. so Benq and CEC face completely different challenge to consolidate the acquired business. I think big challenge for Benq are how to deal with european government policy to reconstruct organization. but for CEC, I don't think that can be called globalization. because philips mobile phone business is really a chinese company except using philips brand. so CEC still face how to enter global market. it's far not enough to do business globalization only with a gobal brand!
2) the role of mobile phone business are not same in Benq and CEC:
2) the role of mobile phone business are not same in Benq and CEC:
Benq grows from foundry business, then creates self consumer electronics brand step by step. and mobile phone is a very important strategic business to construct its brand. although Benq didn't lose much in its marriage with Siemens, it's a strong attack on its self brand system. on the contrary, CEC is conglomerate with many businesses. mobile phone is only a small part. if CEC can acquire more and more global famous brands, definitely it's a good thing. so even if CEC can't utilize philips' brand very well, it will not impact the overall business of company.
I am not pessimistic no matter Benq failed its global marriage or the uncertain future of CEC mobile phone new marriage. I only want to recommend all the companies who are undergoing globalization or plan to: make enough due diligence on market macro environment before making the deal!
good luck!
Written by Keanu Zhang - Visit Website
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@April 14th, 2008 16:21 | |
Interesting post Keanu in using the terms marriage and divorce in mobile phone industry. =) To add on the differences on the above mentioned 2 cases “Benq divorce & CEC’s marriage… well, just from he 2 terms “Divorce & Marriage”, at a first glance, you will know already how opposite they are. But well, I do agree wih you Keanu that companies who are undergoing globalization or plan to should make enough due diligence on market macro environment before making the deal!
-Joanne