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Author:
Rafał Kowalczyk
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Table of content
1. Preface......................................................................................................................4
2. Situation Assesment.................................................................................................5
3. Defining Problem/Decision Area...............................................................................6
4. Identification and Evaluation of Alternatives.............................................................7
5. Recommended Course of Action..............................................................................9
6. Sources...................................................................................................................10
1. Preface
The goal of this document is to present in proper evaluation form HBS TiVo Case
analysis. In order to prepare this analysis author used information from HBS TiVo case
given by SMM trainer and available on WEMBA Memento website.
The document has the following logic structure:
o Chapter 1 Preface – general document information.
o Chapter 2 Situation Assesment – synopsis and evaluation of TiVo current
situation.
o Chapter 3 Defining Problem/Decision Area – problems and managerial
decision areas for the company.
o Chapter 4 Identification and Evaluation of Alternatives – list of feasible
alternatives.
o Chapter 5 Recommended Course of Action – recommended steps to take
to solve the problem.
o Chapter 6 Appendix – this section contains addition data used in TiVo
case analysis.
o Chapter 7 Sources – bibliography.
2. Situation Assesment
TiVo company has developed and introduced into the market black-box hardware
device that brings a whole set of new features to the classical TV, for example: pause,
fast foward/rewind and replay in slow motion TV stream and much more (functionality of
TiVo black-box is described in details in HBS TiVo case). In other words the product
offers on-demand TV which is of course very attractive from the end user point of view.
Price for end user per one box was established at 1,000 USD level.
In short description TiVo device uses MPEG-2 compression/decompression algorithm to
store TV streams on builded-in hard disk with 2 main capacities: “14-Hour” and “30-
Hour” box. TiVo device offfers four different quality categories: basic, medium, high and
best picture quality. In order to produce and deliver reliable and resilience hardware
alliance with Sony and Panasonic companies was established.
According to information from TiVo case product was lunched in USA during Christmas
1999 and after fourteen months has signed up 42,000 subscribers, with growth rate of
14,000 new users per quarter.
Of course TiVo prepared very aggressive marketing compaing (in mass media, direct
marketing in stores, billboards etc.) and some of its ads was even amusing for some of
potential business consumers/partners – for example so called “Network Executive”
advertisement was badly perceived by CBS station.
TiVo marketing team finds out that despite availability in many distribution channels
(i.e.: major consumer electronics stores) and high customer satisfaction index the
market penetration was only about 0,04%.
Main competitors for TiVo products comes from Replay Networks(ReplayTV black box)
and Microsoft(Ultimate TV). Especially Ultimate TV is a tough business enemy since it is
bundled with satellite television and its features includes: access to electronic mail,
Internet surfing, interactive television and personal video recording.
In my opinion assuming certain point of time(year 2000) the main business challenges
for TiVo are:
achieve significant competitive advantage
attract business partners such as TV stations
enhance market share and dig penetration
improve profitability
In this case analysis I will try to make some recommendation for TiVo executives that
should help to achieve above listed business targets.
Almost all of management areas are touched by problems that arised in TiVo. Of course
all managerial changes should be properly integrated in order to develop consistent
business solutions.
Given lists illustrate only a high-view of problem/decision areas and should be treated
only as a input for problem/decision breakdown structure. As an example we can use
“sales stuff management”, which consists of such a rich subjects as: compensation
plans, training and career development, evaluation/assessment methology etc. In
author opinion in most business cases top-down problem definition methology is
desirable one since we don’t lose problem target, genealogy and we can achieve any
desired level of problem details as well.
this case would be defined by: Product Enhancement, Value Management, HRM, R&D
and S&D areas.
3. Leave the PDR market and search another business opportunities
It might not be so easy at might sound at first – of course if we want to get enough
assets to start invest in another business. First of all TiVo management should try to get
from current business as much as possible, for example: selling know-how for big Hi-
Tec company, rights for brand (Lenovo – IBM example). Refining and improving
financial condition thru operation optimization and investment cutting could improve the
company market to book value ratio and increase probability for acquisition or merge
with another Hi-Tec bigger corporation. Basing on previous business experience TiVo
could invest in interactive internet TV for example and some advanced consulting
services for other Hi-Tec companies as an additional profit stream. Of course TiVo
could try just to sell at best price their assets but I would rather say that this is
suboptimal solution because their main assets are based on intangible assets like
know-how and established brand name. Core business areas would be: Operation
Management, Value Management and Strategic Planning.
6. Sources