Strategic Inflection: Tivo in 2005
INTRODUCTION:
The March 13, 2006 Harvard Business School article—“Strategic Inflection: TiVo in 2005” highlights the challenges TiVo faces as financial instability and leadership upheaval are encountered and a new strategic direction must be decided upon. TiVo risks losing the market-leading position that founder Mike Ramsay secured with their first-mover advantage if they do not act quickly to counter the increase in competitive challenges.
The two main problems TiVo faces are, in the short term—successfully delivering a solution to their new potential strategic partner ComCast, and in the long term—deciding what the best combination of four strategic options is. The four strategic options are “aggressively pursue the stand-alone business; Focus on OEM (Comcast-like) deals with other cable companies, and possibly telcos, with the hope of making TiVo into an advertising platform business versus a DVR hardware-services business; Become a content distributor; Seek new markets outside of the U.S., where DVRs were still in their nascent stages (TiVo case).”
According to Ramsay, TiVo “should become ‘the portal to entertainment services in the home… …we’re in the user interface and entertainment services business” (TiVo case), while Tom Rogers, new president and CEO maintains that “TiVo could extend its brand and technology to the ‘mass market’” (TiVo case). Both of these goals, along with improving investor relationships through increased earnings and refusal to conform to analysts’ negative forecasts, are within TiVo’s means, given careful scrutiny of their strengths, weaknesses, opportunities, and threats.
ANALYSIS AND EVALUATION:
General Environment:
There are several factors that should play into the decision-making process, the most relevant of which I will highlight. The Federal Communications Commission’s (FCC) upcoming decision will affect TiVo’s ability to successfully support premium services with a two-way cable card. TiVo also is in an
The March 13, 2006 Harvard Business School article—“Strategic Inflection: TiVo in 2005” highlights the challenges TiVo faces as financial instability and leadership upheaval are encountered and a new strategic direction must be decided upon. TiVo risks losing the market-leading position that founder Mike Ramsay secured with their first-mover advantage if they do not act quickly to counter the increase in competitive challenges.
The two main problems TiVo faces are, in the short term—successfully delivering a solution to their new potential strategic partner ComCast, and in the long term—deciding what the best combination of four strategic options is. The four strategic options are “aggressively pursue the stand-alone business; Focus on OEM (Comcast-like) deals with other cable companies, and possibly telcos, with the hope of making TiVo into an advertising platform business versus a DVR hardware-services business; Become a content distributor; Seek new markets outside of the U.S., where DVRs were still in their nascent stages (TiVo case).”
According to Ramsay, TiVo “should become ‘the portal to entertainment services in the home… …we’re in the user interface and entertainment services business” (TiVo case), while Tom Rogers, new president and CEO maintains that “TiVo could extend its brand and technology to the ‘mass market’” (TiVo case). Both of these goals, along with improving investor relationships through increased earnings and refusal to conform to analysts’ negative forecasts, are within TiVo’s means, given careful scrutiny of their strengths, weaknesses, opportunities, and threats.
ANALYSIS AND EVALUATION:
General Environment:
There are several factors that should play into the decision-making process, the most relevant of which I will highlight. The Federal Communications Commission’s (FCC) upcoming decision will affect TiVo’s ability to successfully support premium services with a two-way cable card. TiVo also is in an