Tivo Case Study

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TiVo Case Discussion Questions

1. Draw a supply chain (or value net) that traces the various stakeholders involved in the TiVo value chain and their respective exchanges. From this, what insights do you get about the relative value that each stakeholder adds in this process?

Here is the supply chain of TiVo’s product, representing the different stakeholders in the delivery of the product (hardware + software + content) to customers.

Suppliers

Manufacturers (box, TV,
other communication
equipment)

Distribution
networks
Customers

Broadcasters
and Producers
(TV, internet)
Advertisement
companies

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-

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Software and
Programming

Distribution
networks
Service providers
(cable & satelite)
Interactions,
Market data

Broadcasting & Producers:
They provide the content, movies and TV shows to be broadcasted by consumers. They are therefore major stakeholders. They own the IP rights for the content. Advertisement companies: they can put content on a dedicated platform. Therefore, they add value to the product by offering an interactive advertisement experience to users Communications Equipment:

Enable to access content from multiple sources
Software and Programming:
The software receives signals, enables to record, and adapt to viewer preferences Third-party software vendors build new applications and services and enable to extend customer experience.
Manufacturers: Manufacturers of the DVR box including the subcomponents such as hard-disk drives and software integration are important stakeholders; they have a role

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to play in the quality of product and the features. TV manufacturers are also stakeholders as TiVo’s products can improve the consumer experience. Distribution channel: They are many distribution channels possible today for a company and it is a major strategic choice to choose its own. TiVo can be provided by service provider (part of the offer) or sold by independent retailers (Best Buy). Competitors are also part of the value chain as they compete with TiVo and provide competition or complementary services to customers. I do not represent them on the supply chain.

TiVo is striving to influence the whole value chain rather than focus on their component where they excel. They are essentially trying to implement a convergence model at the intersection of these industries. TiVo is positioned on a vertical market, its business model directly challenge broadcasters whereas it could have partner with them to deliver the product.

I put
to illustrate the main interactions between stakeholders but almost every of them influence the others. For instance, improvement coming from “manufacturers” or “software & programming” could lead to a different possibility of advertising and therefore influence “advertisers”. Moreover, I do not represent customer exchanges on the supply chain in an effort to be visual but customer needs influence all chain.

2. For TiVo, describe the six factors that affect customers’ purchase decisions (see Chapter 7, Table 7.1). What are the most salient for Tivo adopters? Relative advantage
The value proposition of TiVo’s products is to allow users to record and play back TV shows at their convenience. Indeed, it is valuable for the users to be able to watch the shows he or she likes whenever he or she wants; it offers freedom of use and more convenience. Moreover, the technology offers lots of advantages as shown in the table C.3, and the possibility to skip ads or record two shows at a time. Therefore, this technology provides an interesting advantage. Paying for the TiVo box and subscription enables you to see every show and movie which has been broadcasted before and therefore you may not need to buy (rent) movies and TV shows anymore.

However, these advantages are only possible once having paid for the box and the subscription. And those are quite expensive, so the users has to evaluate whether, according to its usage, it is worth...
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