Analysis of Tomtom

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  • Topic: Automotive navigation system, GPS, TomTom
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  • Published : May 21, 2013
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Analysis of TomTom
Several years ago, it was so difficult for people to reach a place that they never got. The traditional paper maps were the useful tools for people travel. However, it is so dangerous for drivers look at the map while they drive. Also, if the road is being fixed, it is hard to plan another way to destinations. Over the society develops, there are more and more new technologies coming out. A great innovation gets into our life—the personal GPS. It gives many conveniences to us. In this assignment, we will launch the analysis of a well-known GPS company with the management knowledge. In this paper, we will discuss TomTom in the following topics: the summary of TomTom base on the case, the problems of TomTom face in the market, the SWOT of TomTom have, the recommendation of TomTom in my opinions, and the questions of TomTom’s presentation team.

Summary of the TomTom’s Case
By reading the case “TomTom New Competition Everywhere!” by Alan N. Hoffman, it discusses TomTom in several topics. First of all, it briefly discusses about TomTom. It tells us that TomTom is an Amsterdam-Based company that majorly produces navigation services and devices. TomTom Go and TomTom One for cars, TomTom Rider for bikes, TomTom Navigator (digital maps), and TomTom for iPhone are their major product’s lines. It has a large market share in U.S. and European markets. Next, it talks about what TomTom recently did such as acquisition of Tele Atlas. After that, Hoffman explains TomTom’s five major products in details. Then, he states TomTom’s background such as its history, customers’ groups, resources and capabilities. He highlights the acquisition of Tele Atlas, which is a digital mapping company. In addition, Hoffman points out that the competitions of TomTom. He divides those competitions in the two groups, which are the new and traditional competitions. And the new competitions are majorly from cell phones, ATT Navigator, Online Navigation App, Build-in car navigation, and physical maps. Another section is TomTom’s Internal Environment. There are three aspects he mentions. They are finance, marketing and human resources. Finally, he indicates the issues that TomTom concerns.

Problems of TomTom faced
Based on the case, even through TomTom is one of the most successful GPS companies in the world, there are several problems TomTom has to face. First of all, the demand of personal navigation systems gets saturated. In the past few years, many people have got their personal GPSs in American and European markets. It causes that sales growth rate declines. In the management views, the personal navigation system industry has got into mature stage, which the market is saturated, demand is limited to replacement demand, and growth is low or zero. As the case states, TomTom’s sale growth rate has decreased since 2008. Furthermore, by researching, the revenue of TomTom falls to 1,273,217 from 1,521,083 in Euro dollars by the end of 2011. From the annual report, we can find that 74% of revenue was contributed by EMEA region (2010: 70%) while North America and Rest of World (mainly Asia Pacific) accounted for 20% (2010: 25%) and 6% (2010: 5%) respectively. Compared to 2010, revenue in the EMEA region and North America decreased by €133 million and €124 million respectively. Second, as mention above, TomTom is at the maturity phase within its industry. Competition for market share develops, Garmin, which has 45% of the market share while TomTom only has 24%, and Magellan has 15% of the market share. These two major competitors have their own superiorities to against TomTom, and drive TomTom has to work better and increase its cost to maintain or develop its market share. Therefore, the threat of competitive rivalry within the current industry is very high. In addition to new technology, there are more and more drivers have the navigation function. As the case states, cell phones are one of new...
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