Question 2 -

Hung Duy
Goran Adam
• BenQ Corporation is a Taiwanese multi-national company that sells and
markets consumer electronics, computing and communications devices
under the "BenQ" brand name, which stands for the company slogan
Bringing Enjoyment and Quality to life
• Headquarters Taipei, Taiwan
• Revenue US $2.24 Billion (FY 2010)
• Employees 1,600 (2011)
Siemens AG is a German multinational engineering and electronics conglomerate
company headquartered in Munich, Germany. It is the largest Europe-based
electronics and electrical engineering company
It has operations in around 190 countries and approximately 285 production and
manufacturing facilities
Siemens had around 405,000 employees (2012)
Revenue € 78.29 billion (2012)
• Siemens offers a wide range of electrical engineering- and electronicsrelated products and services. Its products can be broadly divided into the
following categories: buildings-related products; drives, automation and
industrial plant-related products; energy-related products; lighting;
medical products; and transportation and logistics-related products.
Marketing and management issue
• BenQ’s strategy of focusing on fast-growing
product lines (flat-panel screens and cell phones)
has brought it into direct competition with some
of the world’s largest consumer electronics
companies including Samsung and Sony.
• BenQ is paying its brand-building bill through
original design manufacturing (ODM).
• BenQ competes in products with short life cycles
and prices that drop rapidly within weeks of
product introduction.
Siemens was expected to regain
investor confidence through the
selling of their money-losing
mobile phone unit, and shifting
its focus to its more profitable
industrial operations, including
power turbines and automation
BenQ has been seeking ways to
boost its economic scale and
manufacturing capabilities to
become a leading mobile phone
• Acquired 100% of Siemens’s mobiledevices unit without directly paying the
German company.
• Gained the exclusive right to use the
Siemens trademark for mobile phones
for an 18-month period and co-branding
rights to BenQ-Siemens for 5 years. (cost
Siemens about 350 million euros. )
• Agreed to fulfill Siemens’s labor contract
agreements with the cell phone
employees through the end of 2006.
• Siemens provided BenQ with 250 million
euros to help fund the business, and
later paid 50 million euros to buy newly
issued shares in BenQ.
• Carry the unit’s losses, about 1.5 million
euros a day, until the transaction was
• Continued to work with BenQ on
developing handset technologies.
• (2005) Germany’s Siemens launched the new
brand, BenQ-Siemens. With the merger, BenQ
Mobile became the world’s fourth largest
mobile phone brand after Nokia, Motorola,
• The acquisition of Siemens’s mobile phone unit
lost over 500 million euros in 2005.
• (September, 2006) BenQ decided to stop
investing in the money-losing operation and
filed for bankruptcy protection in Germany.
Question 1
• How do you evaluate BenQ’s acquisition deal
of Siemens handset unit ? Is it needed “too
good to be true” ? Where are the pros and
Question 1
• BenQ’s acquisition deal of Siemens handset unit was a good
decision because
- They made mobile phones for
manufacturer of Acer laptop computers, flat-panel
televisions and other household electronics
-Get high technological achievements of BenQ, so they
can save time to catch up new technological
-Own high technological infrastructures
-Own Siemens brand in 5 years, so they can access
Siemens’ customers in Europe and Latin American
Question 1
• BenQ’s acquisition deal of Siemens handset unit was a good
decision because
- They made mobile phones for
manufacturer of Acer laptop computers, flatpanel televisions and other household
-Get high technological achievements of BenQ,
they can
technological achievements
Question 1
• However
- Motorola, Samsung, Nokia, and Apple develop
Those brand command
60% of the worldwide
handset market.
- Current technologies of Siemens is good, but it
be suitable with customers’ demands
- 3,700 workers in high cost in German
- Siemens do not guarantee about profitability
Question 1
• “Too good to become true” has several problems
- Siemens could not sell handset department if it still can
make profit
- Siemens get stuck with their technology and
customers’ demand, the mobile unit has long been a key
weakness for Siemens. Siemens has been criticized for
being late to sell phones with crucial innovations like
cameras, clamshell design and color screens.
- Siemens made its first mobile phone in 1988. In 2002,
Siemens was the No. 4 maker of mobile phones, with 9
percent of global market share; its position has slipped
this year to No. 6, with a 5.5 percent share, the company
said (2005).
Question 2 (1)
Where is BenQ vulnerable?
• The acquisition with siemens proved to be a strategic mistake, as
the two companies could not successfully integrate.
• Culture and communication issues in what became an
unsuccessful acquisition.
• Disagreements or miscommunication between BenQ’s German
management and Taipei headquarters over the development
process of new products and the speed of reorganization
highlight some of the difficulties of integration. BenQ’s decision to
cut its financial support for the German subsidiary was
condemned as rash and irresponsible in Germany, while it was
deemed rational to many in Taiwan.
Question 2 (2)
• In the case of BenQ-Siemens, labor leaders, politicians and media
commentators in Germany accused Siemens of knowing that its
mobile unit was doomed when BenQ took it over, and that it was
trying to avoid the big payoffs typically awarded to German
workers when they lose their jobs .
• The Siemens employees felt they were deceived and betrayed by
the German executives and had no trust in BenQ.
• BenQ did not create appropriate internal communication
mechanisms at the onset of the deal to reduce rumors and
anxiety among the German employees.
• Cross-cultural communication was difficult to achieve.
• Two companies’ incompatible cultures made it
unlikely that they could add value and create
• An international merger and acquisition has a
better chance of success when managers
consider the host country’s culture and allocate
enough time and resources for assimilation.
• Managers need to communicate and clearly
define objectives and performance expectations
during the integration and implementation
Question 3. What strategic
marketing recommendation would
you make to BenQ's going forward?
•Question 3.
As stated earlier, in order to become a
serious global player in this branch of
industry with respected market share, all
of the company's business has to be
functioning on the very demanding level
German Company Siemens obviously had
problems on different levels of this part
of their business already for a long time
Question 3.
So they estimated that is easier to get rid of
that part of their company's business
Merger like this one (Siemens-BenQ) is really
difficult because both companies are big, doing
similar but not the same business and definitely
not in the same way
Companies are from different part of the world
with different management capacity and style,
language barrier, and not even to mention
different social potential of their employees.
Question 3.
So in order to do the business globally and
even better to be successful while doing it
obviously depends on many factors
This is something that Siemens as a global
player knew as they experienced it on their
own. On the other hand there is a BenQ
company which is trying to become one by
merging with company that has everything
what they don't – brand, know how,
innovation, tradition..etc.
Question 3.
It is very hard to say what is there for BenQ to do in
order to make this merger with Siemens beneficial for
them as it was initially planned especially because I do
not believe it will end up as a success story
Some things though are certain:
1. In order to penetrate global market with your own brand
your marketing approach has to be clear and
 2. Marketing budget is playing a serious roll on this level
of market overtaking