A BRANDING ANALYSIS 04.15.2015

Hatem NAJAR

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Table of Contents

EXECUTIVE SUMMARY ............................................................................................... 2

I. Company Overview & overall policy ....................................................................... 3

II. Category and product list ....................................................................................... 4

A. Tablets industry .................................................................................................. 4

B. Smartphone products ......................................................................................... 5

C. Connected objects products ................................................................................ 6

III. Competition overview & Market specification ..................................................... 7

A. Apple case .......................................................................................................... 8

B. Samsung Case ..................................................................................................... 9

C. Analysis of the French market ........................................................................... 10

IV. Strengths and difficulties .................................................................................... 12

A. Constraints faced by the Group ......................................................................... 12

B. SWOT ................................................................................................................ 12

C. Marketing issue ................................................................................................. 15

V. Growth prospects ................................................................................................ 16

A. International strategy ....................................................................................... 16

B. Diversification strategy ..................................................................................... 17

C. Specialization strategy ...................................................................................... 18

Annex : ..................................................................................................................... 20

Bibliography : ........................................................................................................... 21

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EXECUTIVE SUMMARY

Archos owes its existence to a passionate entrepreneur, the story of a man : Henri

Crohas. This simple statement sums up the dynamics of Archos, a company surrounded by

enthusiastic people who give everything for their society to obtain a unique added value.

This High Tech company can be define by its strong ability to adapt itself to new

trends but also because Archos is able to continuously challenging its strategy and products

offer. Among their products, we can distinguish 3 main category : Smartphones, Tablets and

Connected Objects. Each of these category was developed to answer for a new need, a

necessity for the company to take ownership of the latest success to get new market share.

However, the competitive environment remains incredibly intense, which significantly

reduce archos profits and opportunities. The size of the company, which has the status of

SMEs, but also its limited financial resources amplifies those difficulties.

To distinguish itself, Archos has chosen a pricing strategy, becoming a low-cost

producer but with a strong quality label. This choice implies a constant resource arbitration.

Because Archos industry request to renew permanently their offer, innovation and research

had to come first. The direct consequence of this strategic choice is a ridiculous marketing

budget when it's not even there.

Thus, while the company has nearly 30 years, Archos find itself with the need to

produce and operate as a start-up. In this context, the greatest strength of Archos remains its

R&D teams gifted with a great capacity for innovation. Moreoever, in order to compete in this

industry, Archos had the obligation to work scrupulously all its distribution network with a

priority given to get key partnership. Therefore Archos gives itself the means to circumvent a

low marketing budget with a strong B2B approach in the french territory.

The main activity of the group being in France, the French status of the company

facilitates a better market access but even if people know the brand, they don't necessarily buy

their products. This is the reason why, for its own survival, the group's ambitions had to be

bigger, and be visible worldwide would be key element of legitimacy. For this reason, Archos

has a dual strategy : Taking Advantage of international offices to sell their products and look

for new partnerships in other continents.

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I. Company Overview & overall policy

Archos is a French multinational company operating in the electronics industry.

Created in 1988 by Henri Crohas, this company was a pioneer in the segment of tablets,

being one of the first launched a tablet a long time before Apple, on a period of time where

Apple used to neglecte this segment. The company became known on the market for digital

music players, media tablets and smartphones.

Henri Crohas, its founder, in a desire to leave his imprint in his company, he was

smart enough to choose a name (Archos), which is an acronym of his surname (Crohas). A

powerful message in order to demonstrate to the greatest number his personal and complete

commitment toward ARCHOS.

In 2011, Archos had a market share of 24% by volume of the segment of tablets less

than 400 € in France, ranking first in this segment. But things have changed. Since 2012, the

French company recorded net losses (38.7 million in 2012) and in 2013 Archos recorded a

turnover down 7% (€ 143.7 million).

Archos is a company that seeks to be highly international. To reach this goal, the

company including offices present all over the world (Spain, UK, Germany ...) and products

sold in different continents (especially in Asia and in the United States). Where other

companies tend to focus on a number of very substantial staff, Archos is characterized by

limited staff (200 worlwide and only 80 at the French Headquarter), a direct shareholder

relationship, flexible and short decision-making circuit.

Thus, Loic Poirier (photo in your left), current Archos CEO is

pleased to talk about his involvement in the company's shares.

This element is a strong symbol, the symbol of an employee

who is "convinced of the value creation potential" of its

company. This mindset encourages a virtuous circle, impacting

key managers of the company. This statement includes a

democratic plan to facilitate entry to the capital

It is therefore apparent that the Archos management team is also shareholder of the company,

which reassures us as to voluntarism and their involvement but also to the fact that all these

employees strongly believe on the company to challenges competitors and be a key

component on this industry.

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II. Category and product list

As a high tech company, Archos is distinguished by the ability to offer a wide range of

products in three distinguishable segments (tablets, smartphones and connected objects).

However, all products offered to the consumer have to respect a common and absolute rule :

Have a low-cost price where product balance a high quality for the long run and be

affordable for everybody.

A. Tablets industry :

The historical segment in which Archos performs the best is that of tablets. Having

produced MP3 players and MP4 for several years allowed the company to adapt quickly once

Apple had been able to establish a supply and demand market for tablets (with the iPad).

Below appears the latest model proposed by Archos Tablet and testifying, with a very

innovative product, the group's ambitions

With high-performance processors (Quad-Core), and a resolution

HD screen, Archos shows its ability to provide efficient products

on the market for touchscreen products. Archos distinguish itself

from the competition with a concept of data fusion "ARCHOS

Storage Fusion enabled". This product, despite the embedded

technology, succeed to be half price of the market leaders (150

to 300€ for Magnus Tablet when Ipad are on an average of 600€).

In a product differentiation strategy, we also find the

"Themed Series" which aim to touch another segment of the

population. Among those products there are educational

product. The marketing strength of this product lies on their

ability to accustom children to Archos products with prices

low enough to convince parents from their utilities. In this

perspective the product design was built to look like a slate in

order to make this product a true teaching tool.

Furthermore, Archos developed their product communication

providing easy access parental control and secure. A way for

the company to create a significant selling point.

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B. Smartphone products :

While the company Archos has shown its constant ability to innovate, its delay to

enter on this market was a weakness which does not help the company's activity.

weakness. With an entry in this market only in 2013, be visible and create a commitment to

the consumer appears to be much more complicated.

On the contrary, Archos has the capacity to offer products that respond to the real

needs of consumers. Indeed, the market being saturated allows the company to identify what

and where are selling points the company should emphasize on. Moreover, this late entry is

the only possible compromise to offer consumers products that are both interesting, all at a

price significantly lower than the competition.

In this race that pushes a strong balance between esthetics product, value for money

and product usefulness, Archos has managed to develop a wide range of product. To better

understand the approach of the company, following two examples of smartphones, the first for

a very low cost market and the second for high-end customers (cross-cutting approach).

With a nearby screen size standards in force (3.5 inches),

the Archos Titanium seeks to offer to its user the absolute

minimum for a ridiculous price (50 euros). The interface is

thought to be the most optimal (Android) with the ability to

increase the memory of the device. Thus, despite the fact

that we are dealing with a lower-end product, the company

took this opportunity to carry a strong message : offer to the

consumer flexibility. This criterion becomes more strategic

with smartphones which films and records in HD (memory leak)

With the Archos 50 Diamond, Archos managed to offer a powerful product

as good as the one proposed by market leaders. The intelligence of the

group was to offer this product for the symbolic price of 199 €. However, we

can notice Archos difficulties to meet the demand and perform a successful

launch. Archos was forced to announce a stock out for several months just

one hour after the release. Although rarity creates demand, with this event

Archos was penalized in its brand image and on its customer relationships.

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C. Connected objects products :

On this segment Archos seeks further diversification in a very flourishing market.

With this category of products, Archos ultimate goal is to obtain, in the long run, a strong

and unquestioned identity. Indeed, the strengh of this market is linked to the fact that we are

dealing with, in the same time, with a young and extent market.

Due to products that must be renewed constantly, an exhaustive description of

connected objects makes any analysis immediatly limited. However, below you can see a

description of the key products that Archos sell.

With this product, Archos claims a

batterie life up to a year & a full

control of your home regardless

where you are. The idea is to control

everything from your Smartphone.

From a marketing perspective Archos

offer to consumers a futuristic

vision for a price very reasonable.

The biggest feature of this headset is its ability

to adapt to each smartphones (removable base).

This product allows Archos to exist on a new

and flourishing market. Its very atractif price

(€ 9.99) demonstrates the willingness of Archos

to offer an alternative product, less powerful

but incredibly affordable. Moreover, since

this helmet seem to be the first attempt of the

company, therefore new versions, more

powerful and suited to customer expectations

may arrive in the future.

Regarding the smartwatch, limited information

are available for us (Product not available for

sale). However, notice its presence in the list of

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connected objects is part of the marketing strategy of the group, reassure consumers of the

group's ability to ride new trend to offer a similar product cheaper and specific to a

category of the population .

The last key product which defines

the spirit of the group is the

"ARCHOS Beany Music". On its

own, this product illustrates the

company's ability to be where no

one are expecting them. Even if this

product may seem anecdotal, its

concept was revolutionary: overcome

tangled headphones to enjoy an

original (fashion) and practical (be

protected from the cold) product.

III. Competition overview & Market specification

On the High Tech industry, in a « B to C » approach focusing only on tablets and

Smartphone, the main competitors are Samsung and Apple. Indeed, in 2014 Apple realized

32.5% of global shipments of tablets, against 22.3% for Samsung. On their own, these two

brands produce and sell more than half of global tablet

As for the smartphone market in the fourth quarter 2014, Apple and Samsung jointly

owned a level of market share located about 20%. Take as a reference only these two

brands may seem arbitrary but this approach could be justified by the fact that : Apple is the

flagship company capable of creating patterns (cognitive behavior), and Samsung

constituting the great rival, in search of a different but often similar strategic positioning !

The market for connected objects being relatively young, conduct a competitive

analysis would not be relevant. In this segment, archos sales remains too marginal and this

company do not have a direct competitor. In order to understand the decisions taken by the

group Archos and all the competitive pressures encountered, the analysis of Apple and

Samsung companies will be focused on a product approach as well as a reflection on their

marketing positioning.

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A. Apple case :

Apple success can be summarized thanks to their ability to associate the brand with a

state of mind, a strong and powerful spirit, a way of living ! To do so, they needed

products that are both innovative and design. The Iphone products were the Masterpiece, a

way to be close the consumer at any time in order to create new way behavior among

consumers.

Once this step done, Apple was smart to strengthen its customer base with the aim to

support its community. This emotional attachment to the brand turns into an attachment

to the product. The intelligence of the group was to go beyond the product to choose a

position in terms of service (Apple Store). It was necessary to continue to attract customers

with a brand image equal to the new standards offered by Apple products.

The ranges of Iphone that you can see on your left

illustrates what I call the « Iphone syndrome ». No

real differences between each model exist anymore,

what matters most is the product name,

marketing around it and its appearance (design).

The era of digital amplified this phenomenon, with

constant teasing and a need for new product : the

customer is on a drip and Apple is its Doctor

The Ipad has provided new market share to Apple :

housewives. The product becomes complementary,

once you have an Iphone, it becomes natural to

offer yourself an Ipad. Unconsciously, buying an

Ipad appears to be the next step. Why ? Thanks to an

ecosystem thought to be the simplest and the easiest

ever designed. Added to this statement products

which are simply « pretty » in order to become as

attractive as luxury goods

With those range of products (iPhone and iPad), Apple has managed the feat of setting

up mobile products expected to be used in all situations. Indeed, even the promotion Ipad has

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been done in extreme conditions (mountains and cliffs) in order to emphasize on the freedom

that the product can provide (when we exclude battery issues).

Finally, the genius of Apple was to associate

a brand with a person. In this way, Apple is

using the concept of the « personality cult ».

Steve jobs, by his presence, has allowed his

company to gain in humanity (lots of Apple

users crying after his death, people not even

related with him) but especially to give the

illusion of a single chief, alone, in charge of

everything, an undisputed and indisputable

leader able to make Apple a company way

more attractive than the competition

B. Samsung Case :

The success of Samsung is due to a price and product approach constantly challenged.

Faced with Apple's unquestioned recognition. Samsung then had the intelligence to offer

products which are, in the same time, less expensive, equally effective and even more

technical (to answer to new needs).

In this perspective, the Samsung Galaxy S4 Active and its

successor, the Samsung Galaxy Active S5 (picture in your right)

was able to offer to users new features that, initially, appeared to

be technical, but were quickly adopted by the customers. Those

features include an impact resistance, running under water,

bigger size screen etc... Those elements offered to the company the

proximity to consumers that they were missing, a key factor in the

marketing process which used to belong only to Apple. Added to

this statement, a pricing strategy where all Samsung's products

used to be sell at a level of price lower than Apple products and

then, the company succeeded the perfect mixed to become a

legitimate challenger in this Smartphone war.

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Once Samsung has managed to strengthen its customer base, the company now finds

itself in the « Iphone syndrome ». Innovations are now at the margin when it is not

backtracking (Samsung Galaxy S6 and removing the Micro-SD port) with a level of prices

revised upwards.

Samsung tablets do not benefit from the same marketing approach that smartphone

(mass media, teasing and rumors etc ...). The added value of these tablets may justify this

strategic choice. Indeed, the offer proposed is very advanced, with major components and

a lower price than Apple product. We can therefore conclude that all the marketing

behind Samsung Smartphone intended to circumvent the product weaknesses and a

strong lack of innovation !

In conclusion Samsung's success is linked to a desire to flood the market with all

their different products (Tablets and Smartphones). This approach can create some confusion

for consumers but guarantee a sales cannibalization. In addition, a wide range of product

offers Samsung a significant marketing advantage, the illusion of listening to the consumers

by offering the right products for each of their needs.

C. Analysis of the French market :

In 2014, 23.8 million mobile were delivered in France. Of this total, 18.2 million units

were Smartphones. Sales of such devices have increased year on year by 15%. While this

segment in 2013 represented 67% of the total, the rate rose sharply in 2014, reaching 76.4%

of mobile. The analyst firm GfK estimated that sales growth will continue in France. In 2015,

he assesses smartphone sales to total 20.5 million units. According to GfK, half of those aged

11 and older will possess has a smartphone.

With such a high penetration rate, a French group managed to establish themselves in

the market for low-cost smartphone : « Wiko ». Specialized in the production and

commercialization of smartphone, this company is very young (founded in 2011) but

succeeded in only 4 years to become number 2 in the french market for smartphone, just

behind Samsung with 10 to 15% market share

In many ways, Wiko can be compared with Archos (producing in China - bill of

specifications and strategic decision realized in the French headquarters - limited staff).

Understand what made the success of this group may provide a better analysis on Archos

limitations and potential failure.

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First of all, Wiko benefit from a distribution network linked to the retail and e-

commerce, recently distributed by Bouygues Telecom. Being so late in this market has

allowed the company to use social media tools in the most efficient way. Then, the next step

was to let the word of mouth generate interest and curiosity among consumers.

One of the last key points that contributed to the group's success are the loans

extended periods smartphone. This approach then allows a direct relationship with the

customer, listening to the consumer the Wiko Company may consider upstream all the

reviews and product comments to come. This process resulted in the integration of pre-

loaded application for the future models in order to meet specific request. In this way, the

company demonstrates how much they can be close to their consumers needs, a key factor

in the marketing process.

However, all these marketing process implies by the company remain accessible by

every company, Wiko did not invent anything ! Indeed, these are just tools to bypass

disguised marketing constraints. In addition, we must emphasized product lines offered by

Wiko, specializing only in smartphones. When Archos offers to consumer 3 product

categories, it becomes easier for Wiko to divide tasks and responsabilities within their

teams, all dedicated to the same product. At the end, even if the company is able to

communicate efficiently between all their department, this strategy remains too risky. In case

of declining sales, the company won't be able to offer any alternative product for their

consumers (potential bankruptcy at any time)

As for the tablet market, France has experienced during the year 2014 a total sales

amounting to 6.2 million. According to GFK, in 2013 were sold much more tablets than

computers : 6.1 million for tablets, against 4.7 million for the PC. In 2014, the tablet has

continued to be far ahead the PC.

However, combined with a continued decline in prices, the French market recorded its

first year of value decrease (-10%). And 2015 apparently will not be a year of renewal. GFK

estimates that sales will fall back from 6.2 to 5.5 million units. In addition, a large

proportion of consumers are not very sensitive to the product brand and only the price is

important, a good point for the Archos marketing strategy. At the same time, the low cost

tablets distribution has increased dramatically, making Archos activities more and more

complicated (in 2014, tablets, sold less than 100€ represented 34% of tablets sold, 10% more

than in the previous year).

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IV. Strengths and difficulties

A. Constraints faced by the Group :

Apart from the binomial Apple-Samsung, Archos is facing a volatile consumer base.

The era of buzz and all the comparative test that we find online (Frandroid, 01.net,

Lesnumeriques, Zdnet etc..) made the environment increasingly competitive. Thus, even if the

end user is unaware of the purchase price by the distributor, the initial cost of manufacture, or

the final margin, the customer is ever more demanding yet.

However, with high-tech products becoming multitask, the services offered by

Smartphone overlap with those of a tablet. Thus, in the absence of a strong customer loyalty

for a single brand, Archos chose a differentiation strategy product to guarantee to have at its

disposal enough substitute products. Indeed, the general trend of phones resembling to

tablets, called « Phablettes » has amplified this phenomenon.

Like the Wiko company Archos has to face competing companies which takes

different forms (large structure like Apple or small group with an ability to convince and

exist in a short period of time). In this environment, the real threat are the subcontractor

companies looking for new growth opportunities. This pressure, mainly exerted by Chinese

companies, nevertheless has its limits. Indeed, having the skills and production tools do not

provide them a thorough knowledge of the Western market. Thus, despite low barrier to entry

for the production, the effect of experience would be the main challenge, something to acquire

in order to sustain their activity in the long term (no real distribution network).

As for the French legislation, known to be more permissive with large companies,

Archos does not suffer from any particular constraints. Its SME status and duration in the

industry gives to the company some credibility on which the company intends to capitalize

on. Indeed, the company perceived for some as a real « French pride » had been selected

by the french government to be part of the « Grand Projet Numérique pour l'Ecole »1

(hereby a link which gives a small description of this project's ambition for the years to come)

B. SWOT

Strengh : The great strength of Archos lies in their Research and Development

teams able to adapt themeselves to the market by offering cutting-edge products (connected

1 http://www.dailymotion.com/video/x2jqlh4

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objects) but also able to democratize high tech products thanks to attractive price (tablets

and smartphones). Despite a fragile structure, these teams have a strong creativity in order to

surprise and convince the consumer. As a proof, while the giant Google has abandoned the «

Google Glass » project (too ambitious and not adapted to the current market), Archos has just

mentioned a week ago a new product, the « Camera Glass »2 (in the following link you can

see a short video of the potential of this product which remains a prototype).

Archos may also claim to enjoy a very

good distribution network, both digital and

physical. This strengh has been at the

origin of key partnerships with companies

such as Fnac or Toys R us. For some,

Archos has been able to provide a white

label, a very strong message of trust and

reliability in the « B to B » relationship

(Archos used to produce Toy’s R us

Tablets called Tabéo and providing around

10% of Archos' turnover)

The teams that run the company and its Top Managers are also part of the great

strengths of Archos. With economic outcomes often falling down, it appears to be really

important to be able to constantly question yourself and your strategy but also set up an

organizational structure allowing the speed of decision and their implementing.

The last major group strength lies in the types of products offered to the consumers.

Produce tablets, smartphones, and a very specific range of connected objects allows Archos to

take advantage from a deep transfer of skills between each department. This approach

promotes synergy when it's not a perfect complementarity in the production of new concepts

and items (Android interface and Lollipop used again for tablets and smartphones, camera

technology similar between each product, identical embedded materials etc...)

Weakness : Despite an exhaustive range of product, Archos has no leading

products which can be sold in large quantities in order to generate a regular financial returns

2 http://www.usine-digitale.fr/article/exclusif-archos-devoile-ses-lunettes-camera-sur-

le-marathon-de-paris.N323519

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with a high level of margin. This assumption becomes a bigger issue when we take into

account that we are dealing with low-cost product (very low level of net income).

This situation has a direct effect on the company's health making the company a very

fragile society, with great difficulty in raising funds. Then, some light downturns can lead to

vicious circles with self-fulfilling effects.

In addition to these financial problems, the company's brand image take a hit. Archos

is then perceived as a group with constant difficulty, unable to renew themselves and

becoming not credible among the general public.

The major explanation for these weaknesses is the total lack of marketing budget.

The company is then forced to circumvent these problematics but despite all their efforts,

their ability to persuade and attract customers is reduced to its strict minimum, a strong

and unavoidable weakness for the company

Opportunities : The area in which Archos markets and distributes high-tech

products is fundamentally young and fluctuating. This fact pushes the company to believe in

strong growth opportunities. The fast and unpredictable success of Wiko showed to the

competition how, on this market, nothing is really frozen.

Within the different categories of products, the connected objects can provide to the

company a significant and unique identity. Home products could be designed for

housewives with the ambition to develop a greater specialization. Then, the concept of

well-being associated with High Tech products could foster a significant competitive

advantage to differentiate themselves from the competition

Moreover, with innovative R & D teams and new projects developed all the time, like

the "Camera Glass" prototype, a possible break is conceivable. Indeed, Archos has the ability

to produce and develop items that could overturn the high-tech market causing a deep

repositioning product.

Furthermore, Archos recently completed the acquisition of « Logic Instrument »

Group (entrance on the capital accounts up to 49%). This strategic decision, in addition to

provide a high level of return on investment, has been based on the ambition to dominate the

market for mobile terminals for professional using the « industrial synergies, business and

technology between the two companies ». The ambition of the two French groups is to create

the leading European manufacturer of professional mobile devices. In parallel, Archos

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does not forget the other segments of customers with the national project « Grand Projet

Numérique pour l'Ecole », a way to remain visible in the long run.

Threat : Despite the fact that we are dealing in a very young market, the quick and

strong success that Smartphones and Tablets have met leads slowly to market saturation.

Indeed, households end up to be equipped and outlets are increasingly limited. Once the fad is

over, generate interest in order to renew the customer's interest becomes a battle doomed

to failure. Indeed, in a few years, the market has become mature enough to take down

any rise on market share (in value)

In addition, in order to always reach more customers. All companies in the tablets and

Smartphone industry have adapted their offer to provide low cost products, or simply with

lower prices. This strategy to increase individual market shares for each group has for

immediate effect a continous and deep decrease on all companies margins in this sector.

Lastly, despite the willingness of the company to integrate a strong identity in each of

its products, Archos suffers from a situation in which all sources of differentiation have

already been appropriated by the major players in this industry. While Archos must bring a

strong added value for these products, except from a very good value for money, the company

finds themselves in a position where everything can change dramatically. For the group's

success over the long term, Archos must either emphasize on the fact that we are dealing with

affordable product (great force) or anticipate the next fad in order to avoid being seen as a

simple follower.

C. Marketing issue

Based on the analysis made on the competitive environment that Archos has to face,

this part aim to understand what should be established at Archos from the things that can

not be implemented.

The history surrounding Archos is really singular, the story of a passionate

entrepeneur : Henir Crohas (picture in your left), somebody who was able

to anticipate trends (boom of MP4) in order to give to his company a

personal name, a part of himself. This analysis in terms of person can be

compared with Apple. The company would win to communicate on its great

managers and leaders to give to the company much more humanity, a

way to get a strong and passionate bond with your customer base.

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Regarding limitations in marketing budget, Wiko has shown the way with the

capacity to take ownership of digital tools in order to rethink their production and integrate

customer feedback. In this segment, Archos has been and remains way behind, a shocking

and unacceptable fact. Indeed, while in innovation, the company has nothing to prove, limited

find themselves in this activity is a weakness that should not take place. Add to that the age of

the company, and we end up with a delay which, instead of being an advantage, becomes an

issue ! The effort that has to be made over time is not insurmountable but it must be done

efficiently to gain visibility and credibility. With the creative talents of the team member's,

differentiate and demonstrate great originality should not be difficult to do.

With a focus on a long-term strategy, and based on the headlines found on the net3,

due to the success of some of their products (Archos 50 Diamond), Archos would be

tempted by an increase in prices. If this rumor turns out to be true, Archos takes the risk to

follow Samsung' strategy (at a lower scale), would be terrible idea for many reasons. First

of all, the identity of Archos remains associated with the level of price offered to the customer

and this image will follow the group probably for the decades to come. Secondly, where

Samsung offers innovative features, Archos remains limited. Thus, even if, in the future, the

opportunity arises, choose such a strategy would be the best way to appear distant, cold

and far from your customer base, a feeling shared by the first Samsung fan disappointed by

the new positioning of the group.

V. Growth prospects

A. International strategy

The major problem of Archos is an excessive dependence to the French market.

Archos devices produces an excellent value for money. But in the Western countries, this

parameter is not the most important. Consumers also pay the brand. Archos could find its

salvation in markets with limited purchasing power.

In order to find new sources of growth, the group will launch their activities in some

African countries (Senegal, Nigeria). This strategy follows a first implantation performed in

Egypt in May 2014, this country being a starting point for the Middle East and Africa.

3 http://www.lesnumeriques.com/telephone-portable/archos-50-diamond-

p22083/archos-50-diamond-point-sur-hausse-probable-prix-dispo-n41141.html

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Capitalizing on this positive experience in Egypt, Archos can be proud of a successful

implementation. This success was possible thanks to a knowledge of the Egyptian market

based on the « Joint Venture » model. Indeed, before any implantation abroad, Archos

analyzed the Egyptian environment to perform a key partnership with "Uni Group", one of

the Egyptian market leaders in telephony. This partnership provides to Archos visibility in

more than 1700 outlets spread all over the Egyptian territory

A perfect mastery of distribution channels is a key component, but the marketing tools

to use is even more important. To ensure a strong consumer impact, "United Group" and

Archos have not hesitated to set up a multi-channel marketing campaign valued at 20

million. This budget includes an exclusive partnership with the professional football league,

an official and mobile partnership with the "Liga de Fútbol Profesional" in Egypt,

advertising on traditional media (TV and radio) but also on social networks and sales

locations

The results were conclusive and ARCHOS smartphones and tablets experienced a few

weeks after a record on sales of more than 40,000 units per month. This figures

demonstrates two phenomena : the importance of a marketing strategy that combines

digital tools and physical means as well as the group's ability to challenge itself on

marketing campaigns which are poorly mastered in the French territory

B. Diversification Strategy

In principle, the idea of diversifying the group's activity could increase financial

returns or simply minimize losses. Realized in the wrong way, any strategy of diversification

could be likely generate confusion and an overall loss in efficiency. For all these reasons, it

is important to separate product diversification from a diversification in the « B To B »

relationship (Merger & Acquisition, key partnership).

Regarding the product diversification, Archos should avoid any project which are too

time-consuming but also resources-consuming. In the High Tech sector, Archos is still absent

of the earphone market. While the brand "Beats By Dr. Dre" has shown the potential

benefits of this market, no substitute product was proposed by Archos (Archos Music

Beany excluded). Although the marketing budget comes into play, the innovative capacity of

Archos engineers give them all the creative ways to convince and attract customers. The

Archos Music Beany has showed that they are able to be different, singular. The strategy to

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implement would be based on a perfect combination of revolutionary design, quality

features and a reasonable price, criteria that the company is able to fulfill.

Thus, although the idea remains interesting to exploit, any production of this site

requires a balanced and clever distribution of tasks. Similarly, the production of external

charger could be a new product in the range of Archos. A complement to Smartphone and a

way to associate a brand for such a little-known product in Europe. Indeed, apart from

some major Chinese brands, this product is mainly recognized in Asia where we can find

strong consumer habits.

The value behind the production and commercialization of a trivial item is the

marketing strategy that Archos can set up. Indeed, with the establishment of Bundle when

buying a Smartphone Archos, or even with lower prices, this approach can quickly get into

consumer minds and habits to make, unconsciously the link between quality external

chargers and Archos product. With such a strategy, Archos can become legitimate

regarding cheap but very useful products, this fact offers to the company the best marketing

campaigns : Word of mouth. Then, wee can imagine a virtuous circle for a ridiculous cost.

C. Specialization strategy

A strategy of specialization from Archos aims to give to the company ways to

differentiate itself from the competition and become an undisputed leader. This new

legitimacy then go hand in hand with an increase of the company's profits. However, in order

to get an efficient specialization, it must be applied either in a restricted area (specific project

such as the « Grand Projet Numérique pour l'Ecole »), or for a category of product

("Connected objects" for instance).

Regarding connected objects, Archos should develop sports and extreme sport

department. Thanks to key partnerships of industry (Decathlon, Go Sport or Intersport), and

with Archos skills, the company could obtain a new area of expertise without being

involved on an open competitive war.

Among this segment, home automation is a key area of expertise held by Archos.

With the all-digital era, this sector is set to become increasingly important, Archos has a

high interest to invest massively in this segment. In this specialization, Archos will have the

opportunity to imagine the world of tomorrow without necessarily creates differences between

consumers (affordable prices). However, this technology can be scary, therefore, have a

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popular marketing strategy appears to be essential (reassure the client and keep him

constantly notified)

Within the specialization strategies, with an adpatetd and smart marketing

communication, the « Grand Projet Numérique pour l'Ecole » could improve

significantly Archos activities in the long run. The real challenge is to convince local

authorities to buy Archos Tablets and let the company be part of the « 1 Tablette for 1

secondary-school pupil » program. In this scenario, a potential market of 500,000 tablets

per year awaits Archos with a national exclusivity for the company.

Archos issue would be to insist on how their products constitute a great tool to fight

against social determinism, creating digital behaviors to favor professional integration

but also offering to disabled persons a better access to information. If we take the

example of Denmark, tablets helped dyslexic and autistic children to enhance their attention

in class. Thus, with this project, Archos could be part of a project which aim to deeply rethink

the French National Education with connected secondary school and develop new teaching

methods. However, all those arguments are far away from today's issues, this isthereason

why this project has to be seen as a global projection, the ultimate goal to reach.

Whatever the motivation and Archos resources, the company will have deal with the

french administration, its legal machine and high complexity. The only option available for

Archos is to make everything on its power to simplify as much as possible the product

offering in order to better convince the legal representatives.

To achieve this, the company can capitalize on its success in the field of educational

tablets to make its product approach much more practical and based on key figures.

Products must also be divided into large section, emphasizing only on the one which are

the more accessible and with an immediate utility. Among the product range, we can imagine

a series of connected objects related to education such as digital board, touch pens, interactive

supports.

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Annex : Consumer Survey (Filmed - 4 People interviewed)

Video Link :

https://www.youtube.com/watch?v=oGHhzOI5a7c (Part 1)

https://www.youtube.com/watch?v=tc5kzvJcX4s&feature=em-upload_owner (Part

2)

General Question : Do you know this company ? What could you tell me about it ? If you

had to guess, what would be Archos age ?

Music : Consumption and Utility on your daily life ? Is it something important or not

(consumer Regular) ? Platform used ? Reasons ?

ARCHOS product : Have you ever used an ARCHOS product ? Which one ? for what

purpose ? What do you think about it ?

Tablets : Do you use Tablets ? How useful you find it ? If you had to buy a brand, which

one it will be (Favorite Brand) ? Why ? What about pricing (Archos Strengh) ?

Storage (Giga Number) : Important or not for you ? A comment on Market leaders

Strategy : "Apple / Samsung" Vs ARCHOS

Competition : A Few words regarding « Wiko » = > Did you know them ? What do you

think about the company ?

Communicate about people more than the product : Storytelling regarding Mister Crohas

(Creator ARCHOS) = > Could it work ? French Vs American Culture ?

Connected Objects : Home Connected = > What do you think about it ? Scared or

attracted (remote control) ? Myth or Reality ?

« Grand Projet Numérique pour l'école » : Do you think it will be useful from an

educational point of view (Social Determinism, disabled children)

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Marketing Issue : Social networks can actually helped product communication ? How ?

Place taken by Youtube Video (Does it have a real impact on purchasing choice)

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http://www.tablette-tactile.net/etudes/