Essay - Tivo Case Study Executive Summary Despite a Strong Launch of...

TiVo Case Study

Executive Summary

***** a strong launch of the company and continual addition of new subscribers, in addition to the added benefit ***** having a very low churn rate relative to competitors and comparable industries, TiVo is still not anywhere near profitability. See Table 1, Financial Ratio Analysis, 1999 - 2003. With negative operating, pre-tax and net profit margins, ***** needs to get in***** higher-marg***** generating services quickly and forget about testing ***** elasticity of the DVR market through low-cost product introductions. From ***** strategic options presented in the case and the apparent ability of OEM partners to also become ***** such as DirectTV and cable companies, TiVo needs to take an aggressive series of strategic steps ***** bal*****ce its own ecosystem of partners, ***** customers, and media providers. The *****tent of this analysis is to present ***** strategic issues ***** is facing in 2003 and also provide a series ***** recommendations for top management to attain superior performance levels.

TiVo Strategic Issues in 2003

***** all strategic options and ***** are the three ***** priorities that emerge from the case with regard to TiVo's daily operations in 2003. First, the cont*****ual growth of the subscriber base and its forecast as extrapolated from the case information shown in ***** 2, TiVo Service Subscriptions shows that TiVo has the potential to dom*****ate an entirely new *****a of on-dem*****d entertainment and grow its ***** base to approximately 3.8 million subscribers by **********, based an extrapolation of data in ***** case study. Second, the challenge of *************** licensing revenues while creating an OEM channel for products yet not ***** competitors in the process is the most challenging aspect of ***** ***** business model during the time period the case study takes place. Third, throughout four years of operations the ***** has ***** to achieve positive cash flow also severely restricts the risks TiVo top management should take on. Paradoxically however TiVo has created an entirely ***** services industry ***** allowing consumers to view entertainment content when they want and how the want to view it. A value proposition that underscore convenience ***** time savings to ***** is clearly one that resonates and leads ***** loyalty, hence the very low churn rate in *****ir service relative to other telecommunication- and cable-based businesses. For TiVo to profitably grow they need to capitalize on th***** unique aspect of their business ***** ***** generate higher margins from delivered content and services. ***** DVR itself will ***** ***** a commodity as more and more competitors enter the *****, which is shown in Exhibits 11 and 12 of the ***** study. As of 2003, just five years after ***** launch of the company, there have been several competitors **********g the ***** market alone, and ***** including Microsoft who ***** the potential to ***** ***** for market leadership and attain a positive Return on Investment (ROI) due to their corporati*****s being able to absorb overhead and allocat***** costs. Initiating either a low price unit of the TiVo Basic