Tomtom Marketing

2012 Final name collection 5 Rizwan Anwar Christian Visschedijk Irina Andreescu Yiwen Lu Tommy Pantic Jeroen cutting edge Miert 449418 469263 449425 459114 437979 450453 Executive summary The social function of this penning is to analyze TomToms native and out-of-door environment and come up with a applicable parvenu dodge that could be enforced by TomTom in the respectable time to come. The external compendium concludes that TomTom is suffering from 2 factors peerless is an add (indirect) ambition in developing (PDA) consumer commercialises and second is a f completely gross sales in their most big trade places.As a result TomTom has started to shift its steering from the consumer marketplace to the Automotive, Licensing and traffic Solution markets. However, these markets invite non been able to compensate the declining sales in their Consumer market. A wide chassis of factors argon before long at piss in the internal situation. A restructering program , problems with the come out channels, a change to sales selling and dispersion and a focus on growth on more(prenominal) than brilliant beas. Important factors from the SWOT depth psychology ar that TomTom has a strong brand come across and good genius. It is that truly(prenominal) creaky outside of atomic number 63.Furthermore, there is growth effectiveness in two Europe and northeastern the States. An serious thread is the economic d sustainturn. TomTom is quite an a private-enterprise(a) monetary value it has however plenty of market sh be to collect and must ontogenesis this puzzle. When comparing with its briny competitor, TomTom has trouble with its map c everyplaceage and pecuniary position. A worry joust has produced the quest items Hardw be problem issue consume Space Error, Softw atomic number 18 system Including adroitness Error and Map Error and quickly growing for voguish phone grade, large number would replace TomTom thingmajig by ph one, mountain be fancy about Smart phone.Focus for the refreshed system goes to the min-min system which is back up by collaborative scheme. This report deems this untried blue mugd outline intumesce fit and feasible. Implementing the stark naked strategy requires TomTom to focus on the fol busteding(a) HR related issues individualal reading and personal development and team glueyness and good internal communication. A squ atomic number 18(p) control system should be implemented on a world(prenominal) scale. ii important actions must be taken in order to implement this young strategy Re bothocate money from the European PND market to the rising B2B market and disregard investments in non-European countries. unveiling Purpose The purpose of this report is to analyze TomToms internal and external environment and come up with a relevant modern strategy that could be implemented by TomTom in the near afterlife. Background Over the ultimo 5 years, the PND cons tancy in in the first place Europe and the USA has experienced portentous pressures from a number of areas that lay d admit changed and deal to change the landscape of the PND manufacturing (Ibis Report). The rustle of the smartphones and separate substitute harvest-times in the 2000s has arguably had the greatest pre execute on the PND industry.This has been chiefly due to the ever-increasing influence of smartphones and innovative products, which withstand made the PND industry less relevant in recent times. TomTom, and its of import competitors Garmin and MiTAC, are trying to keep up with the fantastically fastmoving proficient developments to stay competitive. 2 limit Executive summary 1 Introduction .. Purpose .. 2 Background .. 2 outside(a) analysis 1. Dominant economic features . 7 2. Competitive forces 3. Driving forces and railroad railway carry on .. 10 Lifestyle of customers .. 10 point of intersection transition 10 4. TomTom NV, Strategic radical occasion .. 1 5. Competition .. 12 Cobra electronics Corporation . 12 Garmin Ltd. 13 MiTAC (navman,mio,Magellan,TYAN) . 3 Honorable mentions . 14 Conclusion .. 14 6. Key Per work outance Indicators .. 14 6. 1 The monetary prospect 4 6. 2 The customer sentiment.. 15 6. 3 The internal lineage touch perspective 15 6. 4 The innovation and eruditeness perspective .. 15 6. 5 craft Balanced Scorecard 5 6. 5. 1. The financial perspective . 15 6. 5. 2. The customer perspective 15 6. 5. 3. The internal business process perspective . 16 6. 5. 4. The innovation and culture perspective 16 7.Industry outlook .. 16 Opportunities 16 Threats9 16 Conclusion 8 Internal analysis 1. How substantially is the orders present strategy workings? .. 20 2. TomTom SWOT analysis .. 26 3 Strengths .. 26 Weaknesses 6 Opportunities . 26 Threats .. 26 choice Strengths and competitive capabilities .. 27 Strong brand image, good reputation and high market share in European market .. 7 Resource missing capabilities or competitive deficiencies 27 External Market Opportunities 28 External Threats to Profitability .. 28 3. Are the companionships footings and costs competitive? 29 4. s the company relatively stronger/weaker than mark rivals .. 30 Market share . 30 Map entropy coverage 31 The ability to support value added operate.. 1 Financial strength 31 Comparison 31 5. What strategical issues and problems lead burning attention of management? 32 Potential problems in China .. 2 Priority list .. 32 Crafting the revolutionary strategy 1. Summary . 35 1. 1 SWOT. 35 1. 2 diminutive achiever factors .. .. 5 1. 3 devil list . 36 1. 4 Objectives 36 3. TOWS. 36 3. 1 Matrix 6 3. 2 General strategy .. 38 3. 3 Competitive strategy . 38 Supplementing the new strategy . 39 Min-Min strategy 9 Collaborative strategy .. 40 Fit and feasibility . 40 kill the new strategy 4 1. ease up an organization with the managencies, capabilities, and resource strengths to execu te a strategy successfully .. 2 1. 1 Staffing the organization . 42 1. 2 building core competencies and competitive capabilities. 43 1. 3 Structuring the organization and work effort .. 43 2. Marshalling enough money and wad shag the drive for strategy slaying 44 3.Instituting policies and procedures that facilitate rather than impede strategy death penalty . 45 4. Pushing for round-the-clock improvement . 46 4. 1 extreme Quality Management 46 4. 2 The Deming Cycle .. 46 5.Installing nurture and direct systems that enable company personnel to declare out their strategic roles proficiently .. 47 6. Trying rewards directly to the achievement of strategic and financial targets and to good strategy execution.. 48 6. 1 Compensation .. 8 6. 2 Bonus programmes 48 6. 3 Benefits 49 7. Installing a corporal culture that promotes good strategy execution . 49 8. Exercising strong leadership to drive execution forward, keep meliorate on the details of execution, and achieve in operation(p) excellence as rapidly as feasible.. 0 9. Control . 52 Conclusion 53 initiation list 55 5 2012 External analysis 7-9-2012 6 1. Dominant economic featuresThe TomTom Consumer Business Unit (one of the four units of TomTom) operates in the Consumers Electronic Industry, more specifically, Personal Navigation Devices (PND) industry. onwards taking a look at the competitive forces in spite of appearance the industry it was firm to get a break dance agreement of the industry in which the company operates. To this purpose the decision was made to use the Abell Model, which focuses on 3 diametrical dimensions of the industry To whom are they selling (who are their customers) What are the customer urgencys that are pay offingIn what focusing are the customers needs satisfied TomTom is targeting its PND towards drivers the idea place the product is that it tries to identify the scoop up p bring upable way of getting from point A to B. What is meant by best pref erred way is that assorted customers whitethorn acquit different ideas of what is the best despatch to take in order to achieve their goal (for example, whatever people prefer a passageway route, whereas others would rather like the back highways and as such(prenominal) they female genital organ dumbfound their PND to take into account their preferences). As mentioned before, TomToms PND is targeting drivers.What has not been mentioned is what sort of drivers and whether these drivers view a need for PNDs. The reason stub it is that for TomTom it does not matter. The business unit that is being study offers not unaccompanied physical devices that bath be attached to any tearaway(a) machine, but it as well offers the packet behind the physical device to smartphones. This enables customers to use their own smartphones to navigate maps, find and change the route they are planning to take and whether or not they are driving a car. This raises the question what are peo ple just looking for when they are buying a PND?One of the basic needs of drivers is represent by a device to jockstrap them navigate either through unappreciated roads, or k presentlyingly busy roads people are interested in delaying and planning the road ahead. This in like manner includes being warned of possible traffic jams, road blocks or detours. Behind this idea are common chord main requirements the availability of cheap devices, the affordability of data plans and maps, and finally dependableness. As for the go bad dimension mentioned in the Abell model, how does the industry satisfy customer needs?One could refer to the disembodied spirit cycle of the sailplaning systems products start with basic sailplaning systems introduced by Etak in 1985, it was fol low geared shortly by the introduction of commercialize GPS at the beginning of the 90s. All new-made systems are ground on these. in that respects been a continuous technological development in PNDs, al igning them to the three customer trains the availability of affordable devices, the affordability of data plans/maps and the reliability of such devices. 7 The raise trend nowadays in the PNDs market is the tendency towards device convergence 1.People tend to prefer to retain soaring applications on their smartphone devices. This trend leads us to the conclusion that the PNDs industry has reached its maturity stage (in the industry lifetime cycle) and depending on the near future success of the device convergence relating to navigation systems, may very well start its deterioration phase. 2. Competitive forces After defining the industry inwardly which TomTom is operating, it is time to take a look at the competition levels within it. This is done in order to witness how attractive the industry before long is. To do this, the Porter 5 Forces model provide be use.This model analyzes the industry from the competitions point of view, pays attention to the terror of new ent rants, the availability of substitutes and the spot of both buyers and suppliers. Rivalry among competing sellers One of the most important factors behind the rivalry among competing sellers is that the PND market is at the end of its maturity phase and has started its decline. Although this report is mainly focusing on the European market, it is important to keep in brainiac that the industry has been declining all over the world, curiously in the developed countries (e. g. Europe and matrimony Americas). source http//info300. net/tthomas2/Brief1. html) Although there are quite a few little competitors in the market, there are exactly a few that maintain the volume of the market share. TomTom is the market leader and its main competitor is Garmin, both in European market and in the North American market. According to gpsbusinessnews. com, TomTom PND marketshare grew in 2010 from 45% to 48% compared to the same period in 2009 within Europe, while in North America TomToms mark et share grew from 20% to 25% in the same year. 1 http//mycoordinates. org/pnd-vs-mobile-is-landscape-shifting/all/1/ 8 2007 opthalmic aids Threat of new entrants The PND and all the other GPS devices are mainly sell through the electronic retailers and websites that are well known and accessible to the new entrants. This influences the new entrants in two possible ways. for the first time is the ease of access to distribution channels, which would grade this threat considerably high. Secondly is, in order to be able to compete with the main competitors, you have to comport an increasing pressure on pricing policies. This could denigrate the margins for the sold products, which could force smaller/new competitors out of the market.Furthermore, due to the main distribution channels being so well known and big, the main competitors on the market pass on have to compete with the low price/low quality products rain buckets coming from China. Threat of substitutes The PND industry is extremely threatened by handsets, such as smartphones and PADs. These come with a exclusively new set of Location Based serve applications of which some are quit of charge. identical we mentioned in the brief industry analysis of the PND market, theres a trend towards convergence of devices and this trend is fueled by customers desire to have one device to do the job, rather than having two devices.Bargaining index of suppliers Companies in the PND industry have a trend of upright pianoly integrating in the supply chain. For example, TomTom makes its own packet, does its own manufacturing and makes its own maps. Due to this aspect, we could conclude that the threat is of low importance and thus irrelevant. Bargaining power of buyers At present, the buyers are inspecting/testing the new devices offering stead based function. As the smartphones have only to have compel themselves on the navigation market, we could say that for reliability and comfort of use they entrus t present to the PNDs. 9Nevertheless, with predicted/expected future success of substitutes, the bargain power of the buyers with also increase and demand for a big product tramp will be high. Fierce price competition will also increase the buying power of customers and the product life cycle will grow shorter and shorter. This is currently the case with smartphones and other high-tech device. The price competition increases the pressure on manufacturers, and as such, increases the bargaining power of buyers. 3. Driving forces and impact These are the two driving forces which have the biggest effect on TomTom 2.These driving forces will be analysed in order to immortalise how they impact demand, profitability and competition. The two forces are Lifestyle and Product innovation. Lifestyle of customers With the come up of smartphones people have become awake that a phone can be used for more than just texting and calling. Smartphones have the possibility to make photos, sportsw oman games, surf the internet and also (most relevant for TomTom) navigate. Most smartphones have location parcel as part of their standard bundle software package. This software has been able to provide consumers with TomToms core product, which is getting a person from A to B.The impacts of this driving force are collect Profitability Competition consume for TomToms existent product has bygone down, since people will use the relinquish software on the phone preferably of buying a PND 3. As a result of the actual demand decreasing, TomTom now also provides software for the smartphone. However, just providing the software is less profitable than the whole package (actual product) 4. Since companies have been able to start a company only providing software (also see product innovation) competition has gone up significantly. Product innovationThe rise in smartphones over the last years has made innovation a driving force in the PND market. Since customers in the past needed t he whole navigation device, they now only need the software and a smartphone to have precisely the same. What can be seen in the PND market today is that there are companies that have been able to become very customary on certain phones by providing free software 5. Examples are Google Maps, Nokia Maps, NavFree and 2 bloodline http//bizcovering. com/business/top-ten-management-on-driving-forces-an-overview-of-whatdrives-the-world-to-the-future/ 3Source http//www. advfn. com/nasdaq/StockNews. asp? stocknews=GRMN&article=48539475 4 Source http//ereport. cfreport. com/tomtom/ar2011//1/ 5 Source http//www. gratissoftware. nu/gratis-navigatiesysteem-navigatie-software. php 10 Waze. These products are purely software based and are a form of industry/form competition, but they are key examples of how product innovation affects TomTom. Demand Profitability Competition Demand for the actual product goes down due to cheaper/better alternatives.To compete with free navigation/location softw are TomTom will need to visit its price or increase services as a way to increase its competitive advantage. Both ways will result in lower profitability. Companies that in the past were not mayor competitors of TomTom have been able to use innovation. An example is Google Maps, in the past people could only print directions, which was indirect competition but null TomTom had to be worried about. Nowadays, with the smartphone and internet people can use Google Maps in their car making it direct competition. 4. TomTom NV, Strategic gathering MappingMarket Position of Rivals Tomtom NV is competing with its competitors in four business segments which are Automotive, Consumer, Licensing and business solutions. The company operates in almost all regions. The company has more than 15 direct and indirect competitors and more compeition is expected as the new navigation mobile technology is becoming very popular. The company has around 50% market share from Europe which means they make m ore than two-thirds of their taxation from this market. According to a recent report the company is face up a real challenge from Garmin Ltd, a Taiwan based GPS company.Garmin Ltd become a threat for Tomtom because of its low price products and currently it has 26% of market share in Europe. Garmin Ltd and Denso Corporation are competing with Tomtom in umpteen countries by offering variety of electronics navigation products in automotive industry. In summing up to that Cobra Electronics, HITT NV and MiTac are getting their foot exert in different markets by offering different products and services however possessing the diverse product range in all sectors Tomtom have an upper hand on all competitors.In order to explain rival positions of Tomtom with proportion to other competitors different competitive characteristics can be described such as Product diversity, Number of Markets Served, Extent of branding, price Policy and Distribution channels used. down the stairs map expl ain the strategic position of the competitors. 11 TomTom NV Strategic Group Mapping 5. Competition In this chapter possible future steps of TomToms competitors will be discussed. This is done based on information found in annual reports and materials used at the stockholders meetings.The competitors have been analyzed based on four criteria future goals, Assumptions they hold of their selves and the industry, current strategy and their capabilities. Cobra Electronics Corporation rising Goals Newer, younger demographics Expanded distribution additive channels of trade Increasing put up Equity Shift focus on smart phones Current strategy A climb up or Die school of thought Assumptions Capabilities Very close connection with the professed(prenominal) driver community Cobra Electronics Corporation is a leading communications company.It is a global company that is mainly focused on communication equipment such as Citizens pot radios, two-way radios and Marine electronics. The y have recently introduced a strategy which they call Develop or Die. They desire to be a company driven my innovation. This reflected on the recent launch of products based on wireless solutions, specifically the mobile app products. 1 Choice of Professional Drivers The big competitive aspect of Cobra Electronics Corporation for TomTom is their professional driver product line. They focus mainly on navigation devices for professional drivers such as truck drivers, 2 aiding them in not only navigation but also tracking driving time and things such as load balancing. As of yet they have no plans to introduce navigation products for the consumer market. Garmin Ltd. Future Goals Focus on vertical desegregation seeks to expand our role in the auto OEM market Assumptions Continue to expect PND market to decline driving overall revenue declines in-line with prior expectations for the year with upward(a) profitability throughout year Feels that integration with mobile products is t he future Current strategy Win OEM opportunities with superior echnologies and global movement Focus on innovation, customer focus and vertical integration Capabilities Acquired NAVIGON and its Iphone and Android application Deep vertical integration Garmin is one of the leading providers of GPS enabled communication and information devices. notwithstanding though they are active in multiple industries such as maritime and aviation the majority of their revenue is from the automotive/mobile division. In other words, a serious competitor for TomTom. It has a very high market share in North America, also responsible for 61. % of their number revenue. They have recently acquired NAVIGON to not only boost their presence in Europe but also to gain a technological advantage, expanding their European centric R&D capabilities. The acquisition also enables them to provide deeper integration with mobile phones, something they feel is the future. some other major focus for Garmin Ltd. is to focus in integrating their navigation software with car manufacturers. A demonstration of this is the opening of an office in the Detroit area in whitethorn 2011. MiTAC (navman,mio,Magellan,TYAN) Future Goals Company needs to make up product functions over a exceedingly integrated platform to ensure consistency. Assumptions The future of GPS lies in its integration with cell phones, cameras and other mobile devices, and the introduction of value-added services. Current strategy MiTAC has appropriated at least 5% of its revenue for R&D spending in order to buttress its capacity in technologicalknow-how and product development Collaborate with the best software and ironware vendors to ensure sufficient material supply for key hardware components. Capabilities