BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

TiVo vs. Cable and Satellite DVR; Can TiVo Survive

Maria Catrina R. Pamatmat
International American University
BUS 590: Business Strategy
Giang Biscan Ph.D
October 15, 2015

BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

Statement Problem
Year 1999 TiVo was launched in the market, which offers advanced technology in the US
however Americans was not ready yet to adapt the brand new habit in television viewing. TiVo
has been providing distinguished products in the past and will maintain to do in the next years.
However, for the company to grow and survive, they must control, dominate or at least have gain
a big impact in market share within the industry in DVR. TiVo must find a ways on how to get
the attention of the consumers to identify clearly the company itself in the market as a there is a
competition starting to become more intense. TiVo must need to find the niche, as well as
knowing how to recognize the segments of the products.
Company
Strengths
TiVo has an advance features with determine and strong position in digital video recording. It has
rewind, pause and fast forward options wherein the viewers would have the control while they
are watching. It also includes a growth in customer rates that subscribers after 4 months of
launching reached 42,000. Customer satisfaction of 72% claiming that after using the products it
brought relaxation and enjoyment in their home; and 90 % of these subscribers said that they will
highly recommend these products. The unique feature of thumbs-up and down control able to
meet the customer habits and preferences which is considers being beneficial in determining the
right service. The distribution and product reliability of TiVo has improved when they had an
excellent partnership with brands like Sony and Philips. Furthermore, with the presence of TiVo
in Best Buy, Sears and Circuit City the products were able to be known and available across the
nations.

BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

Weaknesses
The company has a slow reputation in brand awareness. The main issue of the product is that it is
a new product in the category of DVR. Functions of the product are difficult to interpret and
explain to customers, thus making it more challenging and hard for the customer in making
buying decisions. TiVo has poor supports from the manufactures representative that result hard in
conveying the sense of urgency for the distributions of product partners. Severe most weakness is
the restrictions in promotional activities in campaign to mass media, websites and public
relation. In spite of the partnership with superstar brands Sony and Philips, product brand
awareness is still poor and slow. A product with no reference point that has super high price, it is
difficult for TiVo to gain acceptance from the customers and how TiVo can do pricing on their
new products.
Opportunities
The demand in acquiring more customers is growing that TiVo sees an opportunity. The company
enters a partnership with satellite providers and can stand alone. One more opportunities would
be expanding and entering International markets as people from other places also fond of
watching televisions.
Threats
The low barriers in appearance in video digital recording market has made the competitions stiff
and more intense since other company can offer and bring products that has similar technological
features. Additionally, the competition level in the present context is already heavy. The
customers changing demands in DVRs also may add some risks in TiVos product.

BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

Answers in Discussion Questions:

1. People might think that a company with a truly revolutionary product and deeply
devoted customers wouldnt have to fret about mere survival, but TiVo does. Why?
Survival has been consider being a race in against with investors and time and are not
bit happy in the numbers. They like TiVo to gain and deliver the numbers they must
need to see as TiVo is relying on investor capital that much in able to subsidize the
growth sales and has come up in projection with a zero debt up to year 2025. This is
the TiVos cases wherein survivorship cares about. Not needing to threw the starting
empire that it has built so far with the name brand that made the product known as
one DVR. It already has the killer right product, the right employee and its just a
matter of having the numbers to be still up in able to get the support that it needed for
the capital and creating much more products.
2. Will TiVo become a great company with a big name in the future of hi-tech industry
and further more become a pop culture or Will it go down in history with its one
time fame?
In the very beginning TiVo already has the right technology, innovation and has
developed an incredible yet motivational product. Having only 304 employees, TiVo
was able to sustain in disrupting one institution after another. TiVo was already
considering as a top of the brand in the world of DVR industry. The technology and
the brain inside the box are those surely enough for the product to survive. Although
there was a report that TiVo has not been allocating properly its money correctly. The

BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

revenue costs has took more than fifty percent (50%) of revenues. They can have
additional savings by having the chips reduce and the costs. Reinvestment poor
strategy is one more thing that can be managed by hiring a new CFO, more
importantly, the product sales has not been increasing that much in able to cover all
the mishaps and that is the important thing, that is to lessen the costs and have market
growth.
3. What do you do when the product you pioneered is being sold better, and for less, by
someone else?
I will take legal actions against it.

4. A. What is the main marketing strategy for TiVo?

The main strategy in market of TiVo in present time is thru word of mouth and some
banners in internet. Although, understanding on how the word-of-mouth in marketing
can be utilized as a double-edged sword. If its a public positivity, then TiVo has the
chances to have a marketing exposure that is free and will result much better from the
word of mouth. Moreover, if TiVo accounts a mistake even a small one it can be a big
problem, the strong word of mouth will eventually create a worst negative result in
public that is a kind of reversal effects.
B. And is the strategy sufficient to bring glory or at least give the profitability for
TiVo?

BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

R and D is the main focus of TiVo, hence, they did not distribute enough resources in
their marketing budget allocations. The main reasons were the free of word of mouth
the TiVo has been relying big time. Although, in the past nine years, we can see
clearly that TiVo has been able to survive a lot of obstacles and downturns with
having only the free marketing strategy. The mere word of mouth evidently is the
main marketing strategy TiVo has, in my opinion it is not enough and not sufficient to
able to gain a bigger profit income and market shares.
C. Finally, are changes needed in order for TiVo to perform better, in terms of
marketing their product?
Yes, in every aspect in business change is mostly needed in able for the company to
maintain or improve their status. Some changes that I can suggest in TiVo is to have a
performance that is better to increase and carefully weigh and balance their resources
and to start allocating this resources for the main purpose in marketing strategy. In
reality, TiVo using the strong word of mouth and will not disappear even if they will
plan to add a new strategy in marketing or campaigns, it does will work much better.
For example: TiVo can more highlight having a celebrity to endorse their products or
having product placements that will result in popularity like TV spot. Having
additional campaigns in marketing and free word of mouth marketing, TiVo can have
a performance that is much and lot more better in market sales of their very own
techy products.

BUS 590 BUSINESS STRATEGY

LESSON 7 CASE STUDY

References:
https://en.wikepedia.org/wiki/TiVO
https://marketwatch.com/story/ttivo-demonstrating-impressive-product-and-prototype-lineat2015-ces-2015-01-05
https://wwstero.com/TiVo/products
https://splunk.com/view/splink-at-tivo/SP-CAANWG