Irobot Market Mix
CASE
8
iRobot: Finding the Right Market Mix?
Alan N. Hoffman
CORPORATION, FOUNDED IN 1990 IN DELAWARE, designed and built a vast array of behavior-based robots for home, military, and industrial uses. iRobot was among the first companies to introduce robotic technology into the consumer market. Home care robots were iRobot’s most successful products, with over 5 million units sold worldwide and accounting for over half of its total annual revenue. iRobot had a long-standing contractual relationship with the U.S. government to produce robots for military defense. iRobot was fully gauged toward first mover radical innovation with an extensive R&D budget. Made up of over 500 of the most distinguished robotics professionals in the world, it aimed at leading the robotics industry. By forming alliances with companies like Boeing and Advanced Scientific Concepts, it is able to develop and improve upon products that it otherwise is incapable of obtaining using only its own technology. The company also has a healthy financial position with an excellent cash and long-term debt rate. Despite these competencies, iRobot still had serious concerns. Although the robotics industry was not highly competitive, iRobot needed more competition to help build up the total scale and visibility of the fledgling industry it had pioneered. Home care robots, its biggest revenue source, was a luxury supplemental good. Times of economic recession could prove to
IROBOT
This case was prepared by Professor Alan N. Hoffman, Bentley University and Erasmus University. Copyright ©2010 by Alan N. Hoffman. The copyright holder is solely responsible for case content. Reprint permission is solely granted to the publisher, Prentice Hall, for Strategic Management and Business Policy, 13th Edition (and the international and electronic versions of this book) by the copyright holder, Alan N. Hoffman. Any other publication of the case (translation, any form of electronics or other media) or sale
8
iRobot: Finding the Right Market Mix?
Alan N. Hoffman
CORPORATION, FOUNDED IN 1990 IN DELAWARE, designed and built a vast array of behavior-based robots for home, military, and industrial uses. iRobot was among the first companies to introduce robotic technology into the consumer market. Home care robots were iRobot’s most successful products, with over 5 million units sold worldwide and accounting for over half of its total annual revenue. iRobot had a long-standing contractual relationship with the U.S. government to produce robots for military defense. iRobot was fully gauged toward first mover radical innovation with an extensive R&D budget. Made up of over 500 of the most distinguished robotics professionals in the world, it aimed at leading the robotics industry. By forming alliances with companies like Boeing and Advanced Scientific Concepts, it is able to develop and improve upon products that it otherwise is incapable of obtaining using only its own technology. The company also has a healthy financial position with an excellent cash and long-term debt rate. Despite these competencies, iRobot still had serious concerns. Although the robotics industry was not highly competitive, iRobot needed more competition to help build up the total scale and visibility of the fledgling industry it had pioneered. Home care robots, its biggest revenue source, was a luxury supplemental good. Times of economic recession could prove to
IROBOT
This case was prepared by Professor Alan N. Hoffman, Bentley University and Erasmus University. Copyright ©2010 by Alan N. Hoffman. The copyright holder is solely responsible for case content. Reprint permission is solely granted to the publisher, Prentice Hall, for Strategic Management and Business Policy, 13th Edition (and the international and electronic versions of this book) by the copyright holder, Alan N. Hoffman. Any other publication of the case (translation, any form of electronics or other media) or sale