HOW DOES EXPANSION STRATEGY CREATE VALUE? A CASE STUDY OF AU OPTRONICS CORPORATION

AU Optronics Corp. (AUO) has developed into one of the world’s largest manufacturer of thin film transistor liquid crystal display (TFT-LCD) panels. Expansion strategy becomes AUO’s mean to continually evolve and adapt to market changes and abreast with its much bigger competitors in a global market.
This study examines a value creation for the AUO’s shareholders through different expansion strategies. Based on my investigation of AUO’s expansion steps I discuss the benefits and downsizes of cooperation, internationalization as well as horizontal and vertical integration which has taken place in the last six years.
I further discuss the inevitability of growth in order to survive in the TFT-LCD industry and provide rationales behind it. In addition, I address the issue of AUO’s recent related horizontal integration into a “green business”.
The study ends with evaluation of above mentioned expansion approaches in terms of their value creation and implications for the company’s management.