Strategy Case Write 1102

1678 Words7 Pages
1. Analyze competitive forces in the US LCD TV industry.
The US LCD TV industry is highly competitive and fast-changing. The industry transitions from cathode-ray tubes to flat panels and provides Vizio a great opportunity to tap into the market. Vizio’s innovation business model through lowering price while maintaining high quality products shifts industry dynamics substantially and made it a strong player in the LCD TV market. A five-force analysis is performed below to further assess the LCD TV industry dynamics in the US.

Rivalry (high) – Leading TV brands including Sony and Samsung have strong presence in the market. They adopt vertical-integrated business model by investing in technology and manufacturing key TV components such as
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The company makes smart moves to lock in the long-term outsourcing relationships with AmTran and Hon Hai by accumulatively offering 31% equity shares of Vizio. The diversified strategic partnerships allow Vizio to secure high quality products, flexible manufacturing for different TV sizes, on-time delivery and favorable manufacturing charges.
Distribution – Vizio targets membership-based retailer – Costco as its top distribution partner. This proves to be effective in balancing Vizio’s financial viability and product positioning. Although selling TV products in electronic retailers such as BestBuy delivers higher brand image and directs to more target customers, distribution terms with such top electronic retailer are likely to be unfavorable to Vizio, increasing the firm’s distribution cost. Meanwhile, Vizio does not want to partner with low-end product retailers that may signal lower quality of its products. The company’s move to partner with Sam’s Club aligns with its existing distribution strategy.
Marketing – Vizio takes a low-cost marketing strategy to further control the cost. By showcasing in nationwide distribution channels and leveraging word-of-mouth effect, the firm largely grabs market share. It then starts a brand-boosting campaign to solidify its brand image in the US.

It concludes that Vizio is able to achieve cost-saving throughout the LCD TV value chain and hence captures a
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