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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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explain the way in which relatedness informed TomTom's post 2008 strategy? Were there alternative strategies open to TomTom post 2008?

Transcribed Image Text:STRATEGY DIRECTIONS ILLUSTRATION 8.2 From sat nav to driverless cars Sat nav manufacturer TomTom diversifies to survive. Dutch manufacturer TomTom's fortunes dived in 2008 American market leader GoPro. It will contain GPS with sales down 36 per cent to €959m (€767m, sensors allowing users to find and tag exciting $1.2bn) (2014) and profits down 71 per cent to moments in their video footage, based on speed, alti- €25.4m (2014). From its peak of $15bn, multinational tude, G-force and acceleration. Bandit's real selling TomTom's market value was just €2.3bn by 2015. How point is its video-editing and -sharing capabilities. did this decline come about and what could manage- Although sat nav devices, sports watches and action cameras may seem unlikely bedfellows, co-founder ment do about it? Originally a software developer for business-to-busi- Vigreux explains that "TomTom is a bit like a collec- ness mobile applications and personal digital assis- tion of startups under one umbrella. Employees are tants (PDAS), TomTom became market leader in PDA actively encouraged to be entrepreneurial in product software in just two years with navigation applications development.... We're a tech brand at the end of the RoutePlanner and Citymaps. In 2002, the TomTom day- the only consumer electronics brand to come out Navigator was launched, providing European custom- of Europe in the last 15 years with a global footprint' ers for the first time with an easy-to-use, affordable, and if there is one thing that unites Tomtom products portable navigation device (PND). Demand was strong its we make things easy for consumers'. for the PND which was not just a new product, but an entirely new consumer electronics category. TomTom alone sat nav for people to avoid roaming charges on GO, launched in 2004, revolutionised the way millions mobile phones and the need to buy a new car if they of drivers got from A to B. Affordable and accessible to want an in-built system. They are also working with car everyone, it became the fastest selling consumer tech- manufacturers to build embedded navigation systems nology device ever. Since then, over 75 million devices into their vehicles as the era of the "connected car' - have been sold in 35 countries, guiding drivers over where manufacturers do everything from updating car er- ies ail. of to al- nt TomTom still feels there is a market for a stand- 1st- ally lue 280 billion kilometres. entertainment to suspension adjustment – has forced During 2008, TomTom's sales fell dramatically due automakers into partnerships with technology compa- to an increasingly saturated sat nav market, plus smart- nies. Competitive concerns mean manufacturers are phone alternatives from Google and Nokia. TomTom unwilling to share data with rivals and so rely on third was forced to reconsider its business and diversified parties for services such as traffic management as it is into fleet management and vehicle telematics, where not always cost-effective for them to make the invest- it is now a recognised leader. TomTom evolved from ment themselves. TomTom is currently collaborating just a hardware business, selling sat navs to stick on with Volkswagen on real-time map updates for driv- windscreens, to a software and services provider that erless cars although they will face tough competition offered free mapping on smartphones and integrated from Google and Apple. traffic management systems used by governments to Sources: http:/lcorporate.tomtom.com Telegraph, 20 August 2015; quell traffic and manage roads. After partnering with Nike on the Nike+ Sport- Watch, TomTom launched its own TomTom Runner and TomTom Multi-Sport watches in 2013, to help runners, cyclists and swimmers keep moving towards Questions their fitness goals, by providing essential performance information at a glance. Both have GPS sensors, allowing them to tap into TomTom's navigation plat- form. TomTom is now straying further from its roots by launching Bandit, an action camera, to challenge to ger not can seir ad- tier the ires Financial Times, 12 February 2015. t to s to ing se 7 1 Explain the ways in which relatedness informed TomTom's post-2008 strategy. 2 Were there alternative strategies open to om- 1ave ted. ient TomTom post 2008? nay for 2). 249

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