TiVo vs. Cable and Satellite DVR; Can TiVo Survive

BUS 590 – BUSINESS STRATEGY LESSON 7 CASE STUDY

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TiVo vs. Cable and Satellite DVR; Can TiVo Survive Maria Catrina R. Pamatmat International American University BUS 590: Business Strategy Giang Biscan Ph.D October 15, 2015


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Statement Problem Year 1999 TiVo was launched in the market, which offers advanced technology in the US however Americans was not ready yet to adapt the brand new habit in television viewing. TiVo has been providing distinguished products in the past and will maintain to do in the next years. However, for the company to grow and survive, they must control, dominate or at least have gain a big impact in market share within the industry in DVR. TiVo must find a ways on how to get the attention of the consumers to identify clearly the company itself in the market as a there is a competition starting to become more intense. TiVo must need to find the niche, as well as knowing how to recognize the segments of the products. Company Strengths TiVo has an advance features with determine and strong position in digital video recording. It has rewind, pause and fast forward options wherein the viewers would have the control while they are watching. It also includes a growth in customer rates that subscribers after 4 months of launching reached 42,000. Customer satisfaction of 72% claiming that after using the products it brought relaxation and enjoyment in their home; and 90 % of these subscribers said that they will highly recommend these products. The unique feature of thumbs-up and down control able to meet the customer habits and preferences which is considers being beneficial in determining the right service. The distribution and product reliability of TiVo has improved when they had an excellent partnership with brands like Sony and Philips. Furthermore, with the presence of TiVo in Best Buy, Sears and Circuit City the products were able to be known and available across the nations.


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Weaknesses The company has a slow reputation in brand awareness. The main issue of the product is that it is a new product in the category of DVR. Functions of the product are difficult to interpret and explain to customers, thus making it more challenging and hard for the customer in making buying decisions. TiVo has poor supports from the manufactures representative that result hard in conveying the sense of urgency for the distributions of product partners. Severe most weakness is the restrictions in promotional activities in campaign to mass media, websites and public relation. In spite of the partnership with superstar brands Sony and Philips, product brand awareness is still poor and slow. A product with no reference point that has super high price, it is difficult for TiVo to gain acceptance from the customers and how TiVo can do pricing on their new products. Opportunities The demand in acquiring more customers is growing that TiVo sees an opportunity. The company enters a partnership with satellite providers and can stand alone. One more opportunities would be expanding and entering International markets as people from other places also fond of watching televisions. Threats The low barriers in appearance in video digital recording market has made the competitions stiff and more intense since other company can offer and bring products that has similar technological features. Additionally, the competition level in the present context is already heavy. The customers changing demands in DVRs also may add some risks in TiVo’s product.


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Answers in Discussion Questions: 1. People might think that a company with a truly revolutionary product and deeply devoted customers wouldn’t have to fret about mere survival, but TiVo does. Why?  Survival has been consider being a race in against with investors and time and are not bit happy in the numbers. They like TiVo to gain and deliver the numbers they must need to see as TiVo is relying on investor capital that much in able to subsidize the growth sales and has come up in projection with a zero debt up to year 2025. This is the TiVo’s cases wherein survivorship cares about. Not needing to threw the starting empire that it has built so far with the name brand that made the product known as one DVR. It already has the killer right product, the right employee and its just a matter of having the numbers to be still up in able to get the support that it needed for the capital and creating much more products. 2. Will TiVo become a great company with a big name in the future of hi-tech industry and further more become a pop culture or Will it go down in history with its one time fame?  In the very beginning TiVo already has the right technology, innovation and has developed an incredible yet motivational product. Having only 304 employees, TiVo was able to sustain in disrupting one institution after another. TiVo was already considering as a top of the brand in the world of DVR industry. The technology and the brain inside the box are those surely enough for the product to survive. Although there was a report that TiVo has not been allocating properly its money correctly. The


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revenue costs has took more than fifty percent (50%) of revenues. They can have additional savings by having the chips reduce and the costs. Reinvestment poor strategy is one more thing that can be managed by hiring a new CFO, more importantly, the product sales has not been increasing that much in able to cover all the mishaps and that is the important thing, that is to lessen the costs and have market growth. 3. What do you do when the product you pioneered is being sold better, and for less, by someone else?  I will take legal actions against it.

4. A. What is the main marketing strategy for TiVo?  The main strategy in market of TiVo in present time is thru word of mouth and some banners in internet. Although, understanding on how the word-of-mouth in marketing can be utilized as a double-edged sword. If it’s a public positivity, then TiVo has the chances to have a marketing exposure that is free and will result much better from the word of mouth. Moreover, if TiVo accounts a mistake even a small one it can be a big problem, the strong word of mouth will eventually create a worst negative result in public that is a kind of reversal effects. B. And is the strategy sufficient to bring glory or at least give the profitability for TiVo?


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 R and D is the main focus of TiVo, hence, they did not distribute enough resources in their marketing budget allocations. The main reasons were the free of word of mouth the TiVo has been relying big time. Although, in the past nine years, we can see clearly that TiVo has been able to survive a lot of obstacles and downturns with having only the free marketing strategy. The mere word of mouth evidently is the main marketing strategy TiVo has, in my opinion it is not enough and not sufficient to able to gain a bigger profit income and market shares. C. Finally, are changes needed in order for TiVo to perform better, in terms of marketing their product?  Yes, in every aspect in business change is mostly needed in able for the company to maintain or improve their status. Some changes that I can suggest in TiVo is to have a performance that is better to increase and carefully weigh and balance their resources and to start allocating this resources for the main purpose in marketing strategy. In reality, TiVo using the strong word of mouth and will not disappear even if they will plan to add a new strategy in marketing or campaigns, it does will work much better. For example: TiVo can more highlight having a celebrity to endorse their products or having product placements that will result in popularity like TV spot. Having additional campaigns in marketing and free word of mouth marketing, TiVo can have a performance that is much and lot more better in market sales of their very own techy products.


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References: https://en.wikepedia.org/wiki/TiVO https://marketwatch.com/story/ttivo-demonstrating-impressive-product-and-prototype-lineat2015-ces-2015-01-05 https://wwstero.com/TiVo/products https://splunk.com/view/splink-at-tivo/SP-CAANWG

TiVo vs. Cable and Satellite DVR; Can TiVo Survive

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