Au Optronics Corp., Competitive Strategy

LCD~1 market started from 1960s. From the very simple black-white LCD to the very popular TFT-LCD~2 used by consumer today, during the 50 years history, LCD industry experienced very fast development, technology update and industry integration. As the core part of the LCD industry, the LCD panel manufacturers experienced the complex industry update and competitive environment changes as well. Nowadays, we find that the LCD panel manufacturing industry is still developing very fast.This paper includes the analysis of industry history on the LCD panel manufacturing, the analysis of industry chain. Using the five forces model analysis the competitors, customers, suppliers, potential entrants and the substitution of the LCD panel manufacturing industry, the paper summarize the driven factors which influenced the industry before and the factors which will influence the industry in the future.This paper also analyzes the history of AUO, the competitive capability and resources, and the competitive challenges of AUO. Meanwhile, according to the competitors' situation recently, especially the top competitors in the industry, SAMSUNG and LG Display, the paper suggests that AUO should adopt the following competitive strategies: Overall cost leadership strategy, and differentiation strategy basing on the technology innovation.Meanwhile, the paper analyzes the dilemma of "caught in the middle" conducted by implementation of both overall cost leadership strategy and the differentiation strategy, which is made by Michael E. Porter. What's more, the paper provides suggestions to AUO to handle this dilemma basing on the competitive environment nowadays.At the last of this paper, the writer provides some recommendations on the strategy implementation, and analyzes the risk to adopt the strategies above. Hope AUO could using its own competitive advantages and resources sufficiently and win in the competition in the future.