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Copy of TomTom: New Competition Everywhere!
Transcript of Copy of TomTom: New Competition Everywhere!
Q6: What recommendAtions would you make to TomTom management to improve its competitive position in the satellite navigation industry, take advantage of market opportunities, and defend against external threats?
TomTom Navigator and TomTom Mobile
Q5: Do you think TomTom's shift to value-added services and making Personal Navigation Devices a smaller portion of total revenue will be enough to sustain it in the near future? Is this strategy consistent with the needs of markets outside North America and Europe?
Largest producer of satellite navigation systems in the world
Dutch by origin, headquarter based in Amsterdam
Operations span from Europe to Asia Pacific, covering North America, Middle East and Africa
A workforce of 3,300 employees from 40 countries
Focus on three key areas:
Better traffic information
TOMTOM: NEW COMPETITION EVERYWHERE!
Dr. Norliza Aminuddin
Nor Badriah bt Mohd Hamidi 2010
Anis bt Abd Razak 2010931143
Siti Hajar bt Mohamad Taher 2010750759
Number 1 in Europe
Number 2 in the US
TomTom Go and TomTom One
To improve people's lives by transforming navigation from a don't-get-lost solution into a true travel companion that gets people for one place to another safer, faster, cheaper and better informed.
Q2: How well is the strategy working?
Q4: What are the strength and weaknesses of TomTom? What are the threats and opportunities facing the company?
Q3: Does the satellite navigation industry offer attractive opportunities offer growth?What kind of competitive forces are industry members facing and how do the forces influence the outlook for industry profitability?
Q1: What strategy is TomTom pursuing?
TomTom strategy is to provide the best location and navigation solutions on multiple platforms from portable navigation devices, to in-built systems to mobile phones and the internet.
By continuously improving and tailoring the company solutions in terms of accuracy, relevance and completeness, they can expand their addressable markets. TomTom have focused their activities and centralised R&D resources around areas of excellence to create the structure that they need in order to continue to innovate ahead of the rest of the industry.
Furthermore TomTom will continue to introduce innovative solutions, complete their traffic information service, shorten time to market for map changes and improve positional awareness, such as through local search. As the only company in the world purely, TomTom focused on location and navigation solutions that convinced their solutions will continue to outperform.
TomTom are vertically integrated, owning the key assets that they need from software to hardware design and from digital mapping to dynamic content and services.
TomTom are dedicated to making their products, content and services easily accessible to their customers, using open platforms and standards whenever possible.
TomTom strive to make the content and services they offer as valuable to their customers as possible. By increasing the number of countries where they offer their real time services and by increasing the number of connected devices in each market the network effect causes their products to become ever more useful and valuable. The higher the level of penetration, the higher the level of feedback TomTom receive, and this in turn helps them continuously improve the quality, relevance and freshness of their maps and services.
1) TomTom Customers
2) Mergers and acquisitions
3) TomTom Resources and capabilities
TomTom has wide array of customers:
-To focus on these customers, TomTom formed a strategy partnership with a technology company called ‘Advanced Integrated Solutions’ to optimize business fleet organizations and itinerary planning on the TomTom pro series of navigation devices.
- (Our customers appreciate having a central web repository to hold and manage all their locations and address information –Ceo Advanced Integrated Solutions)
- Coast Guard, business enterprise, fleet managers, route dispatchers, automobile manufacturers (users)
-TomTom acquired a digital mapping company called Tele Atlas. The acquisition has significantly improve TomTom customers user experience and created other benefits for the customers and partners of both companies, including more accurate navigation information, improved coverage, and new enhanced feature such as map updates and IQ routes.
-(ceo of tele atlas- the combination of TomTom customers feedback tools and Tele Atlas pioneering map production process allows Tele Atlas to dramatically change the way digital maps are continuously updated and enhanced. Its show longstanding commitment towards all their partners, and also customers to delivers the best digital map products available).
- TomTom partnership with company called Advanced Integrated solutions, adding and itinerary planning and route guidance feature to the pro series of navigations devices to help business enterprise with large mobile workforce.
-TomTom partnered with Avis.
-( ceo TomTom- any traveler can relate to the stress of arriving in a new and unfamiliar city and getting horribly lost, with the availability of the TomTom GO 700 we’re bringing unbeatable, full feature car navigation straight into the hands of Avis customers)
3.1 Routing algorithms
-IQ routes, that provides ‘community based information data base’
- its calculate your routes based on the real average speeds measured on roads at the particular time.
-(feedback from web, save time and fuel)
3.2 Digital mapping technology
- First, map date feature. The company recognizes that roads around the world are constantly changing and because of this they used the technology to come out with four new maps each year, one per business quarter.
- Allows the customer to always have the latest routes to incorporate into their everyday travel.
- Second, Map share program. The idea behind this is that the customers TomTom who notice mistakes in a certain map are able to go in and request a change be made. The changed is then verified and checked directly by TomTom and is shared with the rest of their global user community.
- ‘one and a half million map corrections have been submitted since the launch of TomTom Map Share in the summer of 2007.
3.3 automotive partnerships
-partnership with Renault and Avis. Renault developed its new low cost system in partnership with Amsterdam-based technology company TomTom, the European leader in portable navigation systems.
-The cost of a navigation device installed in Renaults cars before TomTom was $1,500 , now with TomTom system its costs only $500.
-Partnered with Avis to offer with navigation devices.
-specifically the model GO700 in all Avis rental cars first starting in Europe and expanding into other countries where Avis operates.
(in other words, when avis upgrading their services, then to make the customer satisfied especially the tourist, which may help to make better and excellent service which its help the customer easy and safe time in directing routes with the help of the navigation)
From our point of view, satellite navigation industry does offer attractive opportunities for growth. Due to emergence of information technology era, people tend to rely on technology in their daily life which nowadays people prefer on High Tech rather than high touch.
New entry - high
Now the information required to create digital map databases is available through public resources, and with the developed technology of collecting data, it enables the potential entrants to enter the market with reliable map databases.
Buyer - high
Buyers now have varieties of different devices to reach the destination, apart from the PNDs, they also could obtain the trip information by the use of smartphones or anyplace with public internet.
Supplier – high
TomTom’ supply chain and distribution model is outsourced, it depends on limited number of third parties. Many innovative products in the market in our devices are only available from specific leading technology organisations.
Rivalry of the competitors - high
Tomtom is facing increasing competition from smart phones which all of them offer similar services, also tomtom facing the compositing with maps, services and built-in systems in cars with others.
•Products with Live services offer the highest quality and most up –to-date real time services, such as HD traffic, speed camera information and local search.
•Tomtom total PND customer base grew to 50 million.
•Selling products and services in 40 countries.
•market share in the European market and in the North America.
•Tomtom has a successful mobile navigation application; Tomtom app is one of the biggest selling products in the apple app store.
•Continuous automotive expansion of relationship with Renault as example.
•Tomtom’s supply chain and distribution model is outsourced, increasing the ability to scale up or down the supply chain, and flexible to develop new products.
•TomTom has less resources compared with the current competitors.
•Growth to in Europe and north America.
•The increasing demand for Real-time services.
•Penetrate India market and catch up with Garmin.
•Many of the current and potential future competitors have greater financial technical and human resources; they may have greater ability to fund product research and development and capitalized on potential market opportunities.
•The shift toward navigation solutions on mobile phones and away from PNDs negatively affects TomTom’s PND market size and profitability.
Corporate Social Responsibility
TomTom’s Corporate Social Responsibility(CSR) strategy focuses on the: social and environmental impact, compliance and community. This is important for the company as more consumers become increasingly more concerned with environmental issues. Also, GPS can be a distraction while driving, which is the reason why the company pays attention to responsible driving and safety.
Social and Environmental Impact
TomTom tries to help reduce C02 emissions in the environment and minimize the negative effects that they cause to the environment by setting up their navigation system on reaching destination quicker and displaying more efficient routes. They have made a research on this topic and found that drivers who use their solutions reduced their journey times by 15%. They believe that if 10% of all the drivers were going to use their HD Traffic device, they would’ve reduced the time spent in traffic by 5%. They also have made their devices so they are recyclable.
Their LIVE Service bundle is up-to-date and clearly displays information to drivers on things such as speed limit, congestion, alternative routes etc. Drivers are also able to see the latest changes in the road network and their ride become and overall safe driving experience. Throught their fleet management business unit they also help fleets drive more responsibly like reducing the likelihood that a truck are routined along small rural roads or obstructed by a low bridge. With their ecoPLUS program, companies are able to get a real view of the efficiency of every vehicle and that way monitor the C02 emission they are making in the air.
According to years of researches, it is a fact that driving with a TomTom navigation device is safer because of the reduced stress and distractions along the road. Also, shorter travel times reduces the possibility of getting into an accident. Their options like guiding the driver into the correct lane when planning to make a turn, their intuitive user interface and providing a live traffic information helps the driver be more aware of its surroundings. All of their devices have an emergency menu called Help Me! which provides an advanced lane guidance and voice command and control features.
Supply Chain Management
TomTom requires their partners through the supply chain to comply with their Ethical Trading Code of Practice. They expect from their suppliers to be provided with products and services that are in accordance with the relevant legislations like Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive, the Restriction of Hazardous Substances Directive and the Waste Electrical and Electronic Equipment Directive.
From our point of view TomTom has less resource compare with the current competitors. Which this weakness must be taken in serious action in order to make the TomTom to be competitive position in the satellite navigation industry, take advantage of market opportunities and defend against external threats. By upgrading and having the full resources would make the TomTom can compete to their competitor such as Garmin.