BUS 475: Tues. March 20, 2012

On Tuesday, we reviewed the case on TiVo, Inc., the company that is largely known for its creation and innovation of DVR (digital video recording). However, this case was different from the other cases we’ve analyzed because it was an example of a company that was unable to leverage its innovative new technology into a successful and profitable business model. It is pretty unfortunate, but it was a surprise for me to learn that the company hasn’t been profitable. I had always been under the impression that because TiVo was so popular when it initially came onto the market, that it must have been successful. I guess it’s never safe to assume that popularity, or a large amount of word-of-mouth, always translates into success.

The lesson we learned from this case is that just because a company has invented a revolutionary new technology doesn’t mean that the company is always going to be successful. The company must decide what strategy they are going to pursue in order to capitalize on their technology and popularity. In the case of TiVo, the company chose to go at it alone, but failed to gain traction when competitors began copying their technology, developing new features and offering cheaper prices. In the case of TiVo, the company might have experienced more success had it pursued a joint venture, licensing or partnership strategy. Partnering with other companies might have saved the company from such fierce competition. I think this is a great case to keep in mind when considering the type of strategy a new company should pursue. You can never be certain of how something will turn out, but it is usually more risky to go at it alone.

By Jennifer Yuen Tagged