Tivo Case Study
TiVo Case Study
1. Draw a supply chain (or value net) that traces the various stakeholders involved in the TiVo value chain and their respective interactions. From this, what insights do you get about the relative value that each stakeholder adds in this process?
TiVo struggles with finding ways to decrease the overall cost of customer acquisition. Costly components and services to assist customers with set-up combined with marketing costs to educate potential customers on the value and benefits of their products leads TiVo to finding ways to increase revenue while decreasing costs. One way TiVo has found to address this while also working with stakeholders is to provide a new kind of advertising to partners so as to not only offer a Business-to-Consumer product, but also a Business-to-Business service.
TiVo also uses retailers to sell the DVR boxes. In an effort to decrease the customer acquisition, TiVo decreased marketing expenditures making their retailers an even more important partner in the supply chain. Consumers can compare products and learn more from retail associates and get recommendations. “Earlier this year, the company abandoned ubiquity as an objective and decided to concentrate on one retailer: "Best Buy gets more velocity," says Keast. "And we both have incentives to make things work." TiVo promotes Best Buy on its Web site and on the service, and Best Buy promotes TiVo in its stores. Best Buy salespeople get special training in how to use TiVo. They also get discounts on purchasing a TiVo set, (Fast Company, 2002).”
Costs of the boxes dramatically affect the front end costs for TiVo. Working with manufacturers, engineers and suppliers of components, software and raw materials to decrease the costs through innovation would allow TiVo to lower overall costs and make the business more profitable. TiVo continues to try to streamline the internal design of a TiVo box and to reduce the number of components that go into it. "We're
1. Draw a supply chain (or value net) that traces the various stakeholders involved in the TiVo value chain and their respective interactions. From this, what insights do you get about the relative value that each stakeholder adds in this process?
TiVo struggles with finding ways to decrease the overall cost of customer acquisition. Costly components and services to assist customers with set-up combined with marketing costs to educate potential customers on the value and benefits of their products leads TiVo to finding ways to increase revenue while decreasing costs. One way TiVo has found to address this while also working with stakeholders is to provide a new kind of advertising to partners so as to not only offer a Business-to-Consumer product, but also a Business-to-Business service.
TiVo also uses retailers to sell the DVR boxes. In an effort to decrease the customer acquisition, TiVo decreased marketing expenditures making their retailers an even more important partner in the supply chain. Consumers can compare products and learn more from retail associates and get recommendations. “Earlier this year, the company abandoned ubiquity as an objective and decided to concentrate on one retailer: "Best Buy gets more velocity," says Keast. "And we both have incentives to make things work." TiVo promotes Best Buy on its Web site and on the service, and Best Buy promotes TiVo in its stores. Best Buy salespeople get special training in how to use TiVo. They also get discounts on purchasing a TiVo set, (Fast Company, 2002).”
Costs of the boxes dramatically affect the front end costs for TiVo. Working with manufacturers, engineers and suppliers of components, software and raw materials to decrease the costs through innovation would allow TiVo to lower overall costs and make the business more profitable. TiVo continues to try to streamline the internal design of a TiVo box and to reduce the number of components that go into it. "We're
References: Kirsner, Scott (July 31, 2002). “Can TiVo Go Prime Time?”. Fast Company, retrieved from http://www.fastcompany.com/magazine/61/tivo.html McConnell, Ben (December 9, 2003). “More on How to Ignore Your Best Customers, the TiVo Way”. MarketingProfs Website, retrieved from http://www.marketingprofs.com/articles/2003/1013/more-on-how-to-ignore-your-best-customers-the-tivo-way#ixzz1cyz2ARH6 Mohr, J., Sengupta, S. & Slater, S. (2010) Marketing of high-technology products and innovations (3rd ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Whitmore, Sam (July 6, 2004). “What TiVo Teaches Us.” Forbes, retrieved from http://www.forbes.com/2004/07/06/0707whitmore.html