This analytical treatise offers an explicit review of the Tom Tom Company’s business environment. The main focus of this paper is the internal and external environments, SWOT and recommendations for the future strategies that the company should implement. The recommendations identified include remodeling of the company’s marketing strategy and decision making processes.
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Internal environment analysis
Within the automotive navigation systems industry of the Netherlands, the business magnitude of the Tom Tom Company is wide and well organised into different subs stores and has a strong presence in all the continents of the globe. The company has an active presence in the main urban towns within the Netherlands besides several franchises.
The company has stratified its target market into wholesaler, retailer, and small business segments. The products are also produced in different quality in order to maximise the returns from clients in the upper and lower economic ladders. Despite the relatively crowded market, Tom Tom has designed and integrated reliable and efficient in-house and external suppliers to ensure the flow of its products within and out of the Dutch territory.
The performance of the Tom Tom Company within the expansive automotive navigation systems industry in the Netherlands is highly dependent on the buyer-power in terms of their purchasing power. For instance, the current 5% discount for many of its products and free shipping for purchases beyond a certain quantity has ensured that the business is geared towards maximising its returns.
Through competitive pricing, strategic expansion, and planned diversification, the Tom Tom Company has managed to establish a strong international market niche despite the rivalry. At present, the company controls 38% of the international market and has a very responsive customer support and online maintenance team for every continent.
Capabilities and strategic issues in diagnosis
The Tom Tom Company has a great opportunity for expansion since the market is inclined to its advantage. For instance, its innovative approach to addressing consumer concerns via the customer support centres and a well organised distribution network will ensure sustainable and rapid expansion into new market niches.
External environment analysis
General environment and industry
The Tom Tom Company operates in the automotive navigation systems industry. The company has established leadership in the European market and controls 39% of it. Currently, the retail and wholesale business segments are the leading sources of revenues amounting to five million dollars in the last twelve months.
The main competitors of the Tom Tom Company are the Navico Holding A.S, MiTAC International Corporation and the Garmin Limited. However, the company has a more global presence than these competitors. For instance, the company controls more than ten percent of the global market.
Overall potential of the company
The company has already established itself in the global market and offers competitive prices for its products. The company’s product prices are almost 20% cheaper than those of its competitors.
The company has the opportunity of diversifying marketing beyond its current scope of operations because of its wide distribution channels. Besides, its supply chain, online sales platform, and the franchised operations have the potential for expansion into the under-exploited Africa market.
Most of the models of supply chain management at Tom Tom propose a linear format to make judgments within the organisation. As a result, responding to the issues raised by the customers often takes a longer time than is expected by the clients.
The company’s modernism business approach makes it miss on exact predictions of its desirable future positions. For instance the projected business expansion strategy of 2011 failed to meet the expectations by almost 30%. There are many competitors in the market, especially the big players mentioned earlier.
The company needs to make use of the current technology in order to remain on top of its competitors. Also, the company should change its approach to strategic insight and execution of strategic plans (Wheelen & Hunger, 2008).
Wheelen, T., & Hunger, D. (2008). Strategic management and business policy: concepts and cases(13thed.). London, UK: Pearson/Prentice Hall.