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TomTom: Strategic Audit
Transcript of TomTom: Strategic Audit
B. Strategic Posture
The organization has a diverse workforce of over 3300 employees in over 40 countries.
From 2002 to 2008, the revenue increased from mere 8 million Euros to whopping 1.674 billion Euro.
In 2005, TomTom listed on Euronext in Amsterdam when revenue crossed 720 million Euro.
Largest leader of Navigation systems in Europe
Second largest player of Navigation systems in American.
Past Corporate Performance Indexes
B. Task Environment
(EFAS): “Task Environment”
Threat of New Entrant (O2):
Not high in the industry (Around85% of the market is held by 2 companies only)
New entrant needs a lot of technology advancement to compete .
B. Strategic Posture
Instructor: Dr. Mustafa Colak
Munera Obaid Alketbi 201006455 Hamda Mubarak Alshamisi 201003496 Rauda Owais Al Darei 201004010 Ayesha Ali Mohammad 200911065 Rowaida Edhah Omar 200916289
To improve people’s lives by transforming navigation .
To provide the best navigation experience
and to make this accessible to everyone
Better traffic information
A. board of Directors
There are 8 board members of TomTom
All board members are men but two, Jacqueline Tammenoms Bakker and Anita Elberse.
The board members at present have joined the board since 2005. Both women board members joined in 2014.
Most of the Board members have terminating date from 2015 to 2017
B. Top Management
There are 3 key members of the top management of TomTom
C. Social Responsibility and Ethics
The corporate office of TomTom was one of the most energy efficient buildings in the city of Amsterdam.
A. Societal Environment
Navigation industry face a dilemma of banning of navigation services by the Government.
In Australia and Canada, the government banned the devices with navigation facilities from automobiles(T1).
The government use the information from PND devices : to track and check movement of suspicious people.This infringement of privacy would lead to saturation in the market or even downfall of the whole industry (T2).
Enabling other divides to install GPS which reducing scope of PND handsets sold by TomTom.(T4)
Needs to be more environment friendly as organization and the industry are facing issues related to Green movement (T5)
The saturation of European and America market(Due competitors). (T3)
The possibility to grow in the developing market(Due to increase in demand) (O1
Threat of New Entrant
Bargaining power of buyers
Threat of Substitute
Bargaining power of supplier
Rivalry among competitors
Bargaining power of buyers (O3):
(Not high )
With less completion in the market from similar firms, the bargaining power of customers decreased as they had not many options.
With new technology, the bargaining power was increasing.
Threat of Substitute (T6):
(Very high )
Biggest threat comes from:
“Cell phones , smart phones, free internet maps and the physical maps are also a substitute although they are being replaced by digital maps”.
Bargaining power of supplier (T7):
(Very high )
TomTom depended on limited number of suppliers to provide manufacturing supplies.
Some of the components were supplied by only 1 supplier.
Rivalry among competitors (T8):
There was intense rivalry among the industry (Due to 3 major players including TomTom) .
There were growing numbers of other competitors & competition from mobile and internet services are increasing.
Very simple yet effective
Focused on the products and service
-The marketing budget for B2C products should be increase
-Entry into new markets
-limited numbers of suppliers, dependency should be decreased by introducing more suppliers
-Tie ups with other services and GPS solutions providers to include more -features
Alternative 1: Growth
1. Growth through acquisition as it is easy to buy the technology then develop it as sometimes the development may take a lot of time.
Pros: The time to develop would reduce
Cons: The customer reject the different and subsequent products
2. Market entry Strategy: To increase presence in developing market as the primary European and American markets are saturated
Pros: find new markets to grow thus increasing sales.
Cons: They may lose competitive advantage in local market.
Alternative 2: Retrenchment Strategy
The market of USA and Europe are saturated. These markets can’t grow but they are working at their best level. There is a possibility that many of these markets would be incurring loss. So the organization should follow the retrenchment strategy and close all loss making unites.
Pros: increase profitability, invested in any upcoming growing market.
Cons: might turn against the organization as regular customers there would face issues
Alternative 3: Stability Strategy
The organization should hold its growth strategy and position itself in the current market. It should consolidate the present market to make them stronger.
Pros: The current market would become more profitable at minimum cost
Cons: The opportunity to grow in few new markets would not be possible so organization may lose some potential markets.
Interaction with customers is one of the key marketing strategies for TomTom
TomTom marketing budget was heavily spent on B2B marketing thus increasing the B2B sales
The sales are ever increasing for the organization.
C. Corporate Resources
3. Research and Development
TomTom is investing structurally and strategically into the research and development of new products as that they can offer new products with improved technology
4. Human Resources:
Employees’ competency was important to the organization and talent development programs were initiated to increase performance of organization and employees
5. Operations and Logistics
There were 4 sales channel clearly defining customers and products
6. Information Systems
• No information
C. EFAS Table
Analysis of Strategic Factors
Key Internal and External Strategic factors (SFAS)