garmin 2019 case study analysis

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Harvard Case - Garmin 2019

"Garmin 2019" Harvard business case study is written by Metin Sengul, Javier Gimeno, Jean Wee. It deals with the challenges in the field of Strategy. The case study is 30 page(s) long and it was first published on : Jun 28, 2019

At Fern Fort University, we recommend Garmin pursue a multi-pronged strategy to navigate the evolving landscape of the consumer electronics industry. This strategy focuses on disruptive innovation , digital transformation , and strategic alliances to maintain their competitive advantage. We recommend Garmin prioritize the following:

• Investing in R&D and developing innovative products: This includes exploring new technologies such as AI, machine learning, and augmented reality to create a differentiated product portfolio.
• Expanding into new markets and product categories: This includes leveraging existing strengths in GPS technology to enter adjacent markets like smart home devices, wearables, and automotive solutions.
• Building strategic partnerships: This includes collaborations with technology companies, automotive manufacturers, and other players in the ecosystem to access new markets and technologies.
• Embracing digital transformation: This includes optimizing their online presence, enhancing customer experience through digital channels, and leveraging data analytics to personalize offerings.
• Strengthening their brand and building customer loyalty: This includes focusing on product quality, customer service, and marketing initiatives to reinforce their brand image and build a loyal customer base.

2. Background

Garmin, a leading provider of GPS navigation devices and wearable technology, faced significant challenges in 2019. The rise of smartphones with integrated GPS capabilities and the emergence of new competitors in the wearable market posed a threat to Garmin?s core business. The case study highlights the company?s efforts to adapt to these changes, including exploring new product categories, expanding into emerging markets, and investing in digital transformation.

The main protagonists of the case study are Cliff Pemble , Garmin?s CEO, and the company?s leadership team, who are tasked with navigating the company through a period of significant industry disruption.

3. Analysis of the Case Study

Industry Analysis:

• Porter?s Five Forces: The consumer electronics industry is characterized by high competition, with numerous players vying for market share. The threat of new entrants is moderate, as the industry requires significant investment in R&D and manufacturing. The bargaining power of buyers is high, as consumers have access to a wide range of alternatives. The bargaining power of suppliers is moderate, as the industry relies on a diverse range of components. The threat of substitutes is high, as smartphones and other devices offer similar functionalities.
• Industry Lifecycle: The consumer electronics industry is in a mature stage, with declining growth rates and intense competition. However, the emergence of new technologies and applications, such as AI and wearables, presents opportunities for growth.

Competitive Analysis:

• SWOT Analysis: Garmin possesses strong brand recognition, a loyal customer base, and a robust product portfolio. However, the company faces challenges from competitors like Apple, Fitbit, and Xiaomi, who offer similar products at lower prices.
• Competitive Advantage: Garmin?s core competency lies in its expertise in GPS technology and navigation software. However, this advantage is being eroded by the increasing availability of GPS capabilities in smartphones and other devices.

Strategic Analysis:

• Value Chain Analysis: Garmin?s value chain includes product design, manufacturing, distribution, marketing, and customer service. The company needs to optimize its value chain to improve efficiency and reduce costs.
• Business Model Innovation: Garmin needs to explore new business models to adapt to the changing market dynamics. This includes subscription-based services, partnerships with other companies, and the development of new revenue streams.

4. Recommendations

1. Disruptive Innovation and Product Development:

• Invest heavily in R&D: Garmin should dedicate significant resources to developing innovative products that leverage emerging technologies like AI, machine learning, and augmented reality. This could include smart home devices, advanced wearables with health monitoring capabilities, and next-generation navigation systems with personalized features.
• Embrace Open Innovation: Collaborate with startups and research institutions to access cutting-edge technologies and ideas. This can foster a culture of innovation and accelerate product development.
• Focus on User Experience: Design products that are intuitive, user-friendly, and seamlessly integrate with other devices and platforms. This will enhance customer satisfaction and build brand loyalty.

2. Market Expansion and Diversification:

• Expand into New Markets: Target emerging markets with high growth potential, such as India, China, and Southeast Asia. This requires tailoring products and marketing strategies to local preferences and needs.
• Enter Adjacent Markets: Leverage existing strengths in GPS technology to enter adjacent markets like smart home devices, automotive solutions, and even industrial applications. This can create new revenue streams and diversify the business.
• Strategic Acquisitions: Consider acquiring smaller companies with innovative technologies or strong market presence in specific regions. This can accelerate market penetration and provide access to new capabilities.

3. Digital Transformation and Customer Engagement:

• Enhance Online Presence: Invest in a robust e-commerce platform and optimize online marketing channels to reach a wider audience.
• Personalize Customer Experience: Leverage data analytics to understand customer preferences and offer personalized recommendations and services.
• Develop Mobile Apps and Services: Create mobile apps that extend the functionality of Garmin products and provide value-added services like fitness tracking, navigation, and social features.
• Improve Customer Service: Invest in customer support channels and ensure prompt and efficient resolution of customer issues.

4. Strategic Alliances and Partnerships:

• Partner with Technology Companies: Collaborate with companies like Google, Amazon, and Microsoft to integrate their technologies into Garmin products and services.
• Form Strategic Alliances with Automotive Manufacturers: Partner with car manufacturers to integrate Garmin navigation systems and other technologies into vehicles.
• Collaborate with Fitness and Healthcare Providers: Partner with fitness centers, hospitals, and other healthcare providers to offer integrated solutions for health monitoring and fitness management.

5. Basis of Recommendations

Core Competencies and Consistency with Mission: These recommendations align with Garmin?s core competencies in GPS technology and navigation software while expanding into new areas that leverage these strengths. The focus on innovation, digital transformation, and strategic alliances is consistent with the company?s mission to provide innovative solutions that enhance people?s lives.

External Customers and Internal Clients: The recommendations address the needs of external customers by offering innovative products, personalized services, and a seamless user experience. They also consider the needs of internal clients by providing opportunities for growth, development, and collaboration.

Competitors: The recommendations aim to differentiate Garmin from competitors by focusing on disruptive innovation, expanding into new markets, and leveraging strategic alliances. This will help Garmin maintain its competitive edge in a rapidly evolving industry.

Attractiveness: The recommendations are expected to be financially attractive, as they aim to increase revenue, market share, and profitability. The investments in R&D, digital transformation, and strategic alliances are expected to generate a positive return on investment over the long term.

Assumptions: The recommendations are based on the assumption that the consumer electronics industry will continue to evolve rapidly, with a growing demand for innovative products and services. The recommendations also assume that Garmin has the resources and capabilities to implement these strategies effectively.

6. Conclusion

Garmin is at a crossroads, facing a rapidly changing market landscape. By embracing disruptive innovation, digital transformation, and strategic alliances, Garmin can navigate this challenge and emerge as a leader in the evolving consumer electronics industry. The recommendations outlined in this case study solution will help Garmin maintain its competitive advantage, expand its market reach, and create long-term value for its stakeholders.

7. Discussion

Alternatives Not Selected:

• Focusing solely on cost leadership: While cost leadership can be a viable strategy, it may not be sustainable in the long term, as competitors may offer similar products at even lower prices.
• Sticking to existing markets and product categories: This strategy would likely lead to declining market share and profitability, as competitors continue to innovate and expand into new markets.

Risks and Key Assumptions:

• The success of the recommendations depends on the company?s ability to execute them effectively. This requires strong leadership, a dedicated team, and a culture of innovation and collaboration.
• The recommendations assume that Garmin has the financial resources to invest in R&D, digital transformation, and strategic alliances. If the company faces financial constraints, it may need to prioritize its investments and focus on the most promising opportunities.
• The recommendations also assume that the consumer electronics industry will continue to grow and evolve. If the industry experiences a downturn, Garmin?s growth prospects may be affected.

8. Next Steps

Timeline with Key Milestones:

• Year 1: Focus on developing innovative products, expanding into new markets, and building strategic alliances.
• Year 2: Implement digital transformation initiatives, enhance customer engagement, and optimize the value chain.
• Year 3: Consolidate gains, monitor progress, and adapt strategies based on market developments and competitive dynamics.

By taking these steps, Garmin can navigate the changing landscape of the consumer electronics industry and emerge as a leader in the future.

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Case description.

Garmin 2019 is the second in a two-part case. Case A reviews the history of Garmin from 1991 to 2008, when the personal navigation device (PND) industry is disrupted by the entry of smartphones with mapping applications. Garmin 2019 covers the decade until 2019, describing how Garmin and other major players responded to shifting consumer preferences, new developments in digital mapping and satellite networks, and the race to develop self-driving cars. In the face of a massive decline in the PND market in this period, Garmin staged a remarkable recovery, shifting focus to spread over diverse products segments, each with its own threats and opportunities. The core of the case is management's reassessment of corporate strategy across the portfolio of businesses.

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Referrences & Bibliography for Harvard Stategy Case Study Analysis & Solution

1. Andrews, K. R. (1980). The concept of corporate strategy. Harvard Business Review, 61(3), 139-148. 2. Ansoff, H. I. (1957). Strategies for diversification. Harvard Business Review, 35(5), 113-124. 3. Brandenburger, A. M., & Nalebuff, B. J. (1995). The right game: Use game theory to shape strategy. Harvard Business Review, 73(4), 57-71. 4. Christensen, C. M., & Raynor, M. E. (2003). Why hard-nosed executives should care about management theory. Harvard Business Review, 81(9), 66-74. 5. Christensen, C. M., & Raynor, M. E. (2003). The innovator's solution: Creating and sustaining successful growth. Harvard Business Review Press. 6. D'Aveni, R. A. (1994). Hypercompetition: Managing the dynamics of strategic maneuvering. Harvard Business Review Press. 7. Ghemawat, P. (1991). Commitment: The dynamic of strategy. Harvard Business Review, 69(2), 78-91. 8. Ghemawat, P. (2002). Competition and business strategy in historical perspective. Business History Review, 76(1), 37-74. 9. Hamel, G., & Prahalad, C. K. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79-91. 10. Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard--measures that drive performance. Harvard Business Review, 70(1), 71-79. 11. Kim, W. C., & Mauborgne, R. (2004). Blue ocean strategy. Harvard Business Review, 82(10), 76-84. 12. Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Harvard Business Review, 73(2), 59-67. 13. Mintzberg, H., Ahlstrand, B., & Lampel, J. (2008). Strategy safari: A guided tour through the wilds of strategic management. Harvard Business Press. 14. Porter, M. E. (1979). How competitive forces shape strategy. Harvard Business Review, 57(2), 137-145. 15. Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. Simon and Schuster. 16. Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press. 17. Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79-91. 18. Rumelt, R. P. (1979). Evaluation of strategy: Theory and models. Strategic Management Journal, 1(1), 107-126. 19. Rumelt, R. P. (1984). Towards a strategic theory of the firm. Competitive Strategic Management, 556-570. 20. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.

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Garmin 2019

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Product Description

Publication Date: June 28, 2019

Industry: Telecom

Source: INSEAD

Garmin 2019 is the second in a two-part case. Case A reviews the history of Garmin from 1991 to 2008, when the personal navigation device (PND) industry is disrupted by the entry of smartphones with mapping applications. Garmin 2019 covers the decade until 2019, describing how Garmin and other major players responded to shifting consumer preferences, new developments in digital mapping and satellite networks, and the race to develop self-driving cars. In the face of a massive decline in the PND market in this period, Garmin staged a remarkable recovery, shifting focus to spread over diverse products segments, each with its own threats and opportunities. The core of the case is management's reassessment of corporate strategy across the portfolio of businesses.

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Garmin Case Harvard Case Solution & Analysis

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Garmin Case Case Study Solution

Bargaining power of customers:.

Due to the loyalty of customers towards the brand products;the bargaining power of customers tends to be moderate to low. As there has been noticeable changes in the growth of the PND industry; the dynamics of the consumer demands have also known to show fluctuation. This is primarily based on the type of innovative products introduced in the market.

Bargaining Power of Suppliers:

Due to the reliance of GPS industry on the data to provide services to its potential consumer base, different players have limited ability to negotiate on the pricing structure. As the GPS market players are dependent on suppliers for the distribution of their products and receiving the manufacturing material, the network of suppliers tends to be larger,which offers competitive pricing structure based on the relation with the organization. Thereby, the bargaining power of the suppliers is moderate.

Threat of New Entrant:

Due to the requirement of high capital investment, the threat of new entrants tends to be higher. The changes in the economies of scale and the government policies regulated by the state government affects the entrance of players in the market. Considering the opportunity of merger and acquisition;the new entrants can pose a threat to the existing players operating in the GPS market.

Threat of New Substitute:

The threat of substitute such as smartphones, digital camera and other products tends to pose a threat to the decline in sales of the existing players in the market. But because of the consistent investment in the research and development to launch innovative products in the market, the shift of consumers’ interest towards other products is somehow not possible. As customers are mainly concerned about the product quality,the threat of new substitute is low.

VRIO Analysis:

The VRIO analysis of Garmin is a broad range analysis,providing the organization with a chance to acquire a viable competitive advantage against its competitors in the food and beverage industry.(Summarized in Exhibit C).

The resources used by the Garmin are valuable for the company or not. Such as the resources like finance, human resources, management of operations and experts in marketing. These are some of the key valuable factors for the identification of competitive advantage.

The valuable resources utilized by Garmin are even rare or expensive. If these resources are commonly found then it would be easier for the rivals and the new competitors in the industry toenter into the competition effortlessly.

The imitation process is costly for the rivals of Garmin. However, it can be done only bytwo different techniques i.e. product duplication, which is produced and manufactured by Garmin and launching of the substitute of the products with switching cost. This increases the threat of disruption to the recent structure of the industry.

Organization

This component of VRIO analysis deals with the compatibility of the company to achieve its position in the market, making productive use of its valuable resources that are difficult to imitate. Frequently,the development of management is totally dependent on the firm’s execution strategy and team.Thus, it polishes the skills of the firm by time based on the decisions made by firm for the progression of its strategic capitals.

Competitive Analysis:

Among all the segments of Garmin’s products,it competes with a larger number of firms in the market. The key competitors of Garmin are Tom Tom, MiTAC, Navico and others. Despite these three major competitors, Garmin faces a strong competition from different players in the market of all of its products segments. Some of the competitors of Garmin are known to have greater financial, technical and marketing sources, such as Apple, Samsung, and Tom Tom etc. These players tend to have the ability of responding rapidly with the emerging technological approaches with respect to the demands and requirements of the customers. One of the key issues or a concern that needs utmost consideration includes the same network of suppliers or distributors by the competitors, which has a tendency of positing a potential threat of losing suppliers that might negatively impact the supply chain. (Garmin, 2018)

DuPont Analysis:

Considering the main components of DuPont equation, the effect profit margin, ROA and financial leverage on ROE have shown noticeable changes from 2008 to 2018. There has been a significant decline in the ROA of 2008 to 2018 i.e. 119 to 62%. Similarly, the percent of ROE has shown decline from 33% in 2008 to 17% in 2018. Therefore, the decline in ROE is due to the decline in the ROA,which primarily includes the sales and assets as shown in the Exhibit D.

Recommendation:

Based on the analysis of the company, Garmin is recommended to implement the differentiation strategy that is a combination of changes in the overall strategic approaches, such as changes in the pricing strategy, marketing, advertising, investment on research and development, which are required to not only increase the sales of the organization but also to improve the brand’s reputation in the international market.This also includes the targeting of specified audience as the key focus segment for its sales.

Implementation Plan:

Conduct survey to gain the feedback from the customers about the services provided and evaluate how the changes in the strategic approach have been influencing the experience of customers and their level of satisfaction regarding the product, price and the services provided.

Performance measurement:

Measurement of the performance to evaluate the growth in the sales as well as the successful strategic implementation by comparison with the expected sales with the estimated sales.

Risk with mitigation tactics:

Introduction of low price products and over differentiation might negatively affect the firm in terms of revenues. So, determining the demands and needs of the customers and then investing in the fulfilments of those needs tend to reduce the chances of increased operating cost for the company.

Appendix A – SWOT Analysis

Appendix B –Porter’s Five Forces Analysis

Appendix c – vrio analysis.

Appendix D – DuPont Analysis

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Garmin - Finding an Optimal Capital Structure

The summer of 2019 was fast approaching and Douglas Boessen, Garmin's CFO, was adamant that he would not leave for vacation before dealing with the long-postponed review of the company's capital structure. Garmin did not have any long-term debt and Boessen thought that given the environment of low interest rates, the company would benefit from tapping the bond market. This case is designed to assess Garmin's capital structure and discuss whether the company should add debt to it.

What material is included in this case:

Description, learning objective, related garmin - finding an optimal capital structure - teaching note 6 pages english published nov 17, 2021 var globaloptionsprod = {}; var productid; var spconfig = []; var optionscustom = []; var itorishandlegrouped = 'grouped_handle_product'; var bundleproduct = []; var configurableproduct = []; var incrementconf = 1; var pricebundle = []; var optionhandlers = []; var boolcustomdate = false; var bundleconfig = []; var countprod = 1; var incrementprod = 0; var globaloptionsprod = []; garmin - finding an optimal capital structure, are you interested in this product, do you find it interesting.

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Garmin Case Case Solution & Answer

Home » Case Study Analysis Solutions » Garmin Case

Garmin Case Case Solution

Introduction:.

Garmin was founded by Min Kao In 1989, and Gary Burrellinitiated its operations with the development of Global Positioning System devices in automobiles in Lenexa, KS. By the year 2003, Garmin had become the developer of wearable GPS product i.e. the Forerunner with the calculation competency in distance, pace and time. While during 2007-2008, due to the launch of dashboard navigation devices, the sales of stock prices had dropped causing 87% loss to Garmin and 94% loss to Tom Tom – one of the main rivals of Garmin.

With the discovery of new GPS technologies, Garmin has been the leading product manufacturer in five different segments significantly, such as marine – 13% sales ($442 million) of 2018, aviation – 18% sales ($603 million)of 2018, fitness – 26% sales ($858 million) of 2018, outdoor 24% sales ($810 million) of 2018, mobile or automotive 19% sales ($634 million) of 2018. Due to the expansion of product line to fitness and outdoor space; the share of Garmin did show a significant growth from 11 percent to 50 percent in sales between the 2008 and 2018.

Problem Statement:

Despite the decline in the PND market growth, Garmin has significantly demonstrated growth and increased its sales. But, due to extensive growth of other competitors in the market such as Apple, Samsung and Huawei, the intensity of the competition has been increasing. The PND industry is not only posing a threat of intense competition, but also exhibiting the threat of new entrants in the market,with whom Garmin would have to compete.

Alternatives:

Target marketing:.

It has been one of the most profitable methods to reach the potential market based on marketing of products in order to increase the sales.

• Depending on one particular target audience; it provides us with an ability to bypass the majority of the targeted population.
• It provides an adaptability to meet the demands of a particular population segment.
• Target marketing ensures a significant increase in ROI.
• It provides the users with the best option to choose, resulting in improved and better results.
• Target marketing makes it difficult to attain all the required information from users without the privacy policy’s violation.
• It might not breakeven because of the unpredictable response of the users to specified advertisements.
• It takes time to develop marketing communication with the potential customers tending to be time-consuming.

Value-based pricing:

Value-based pricing is all about understanding the needs of the consumers.

• It significantly provides the real data enforcing into a profit generating price within the existing pricing strategy.
• Value-based pricing not only benefits the organizational growth but also assists in developing high-quality products with respect to the demands of the customers.
• Interaction and reviews from customers result in more personalized and considerate services.
• Although this is a quite simplified method but it takes time to project effective results.
• 100% accuracy in predicting the average spending of the customers across different regions is not possible.

Differentiation strategy:

It involves creation or manufacturing of high quality products and services in order to distinguish the business from the other players in the market.

• It allows the company to introduce of new products in the market, providing it an opportunity to be the market leader.
• If any product is high in demand, the firm has the opportunity to increase its price.
• The production of competitive productleads the sales of the organization.
• The consumer range of differentiated products are not significantly price sensitive such as Apple and Samsung.
• Loyalty of consumers benefits the organization to remain competitive and pose a threat to the new entrants in the market.
• The introduction of substitute products might hit the market due to lower price ranges negatively affecting thefirm’s reputation.
• Over differentiation might lead to an increase in the operating cost,making the ROI difficult to cover by premium pricing and loss of customers.
• Consumers either consider differentiation as a luxury product or have doubts on its credibility.

SWOT Analysis

• Garmin is an American multinational organization with the capability of leveraging GPS technologies and in-house manufacturing for the creation of trendy and useful products for higher market growth.
• About half of the aviation market of the United States PND market was controlled by Garmin, and the company was positioned as the second bestplayer in Europe.
• One of its core competencies involves vertically integrated manufacturing in Taiwan (Xizhi, Jhongli and Linkou), China (Yangzhou) and the United States (Olathe, Kansas and Salem, Oregon) facilities.
• Production processes of Garmin allows it to maintain a strict process and an efficient management of quality control.
• It has a workforce of approximately 13,000 employees throughout the world,with their intellectual skills and abilities of creative innovation.
• Garmin is over-dependent on the North American market for its sales and on sole suppliers,resulting in decline in profit margins.
• Garmin lacks investment in marketing and advertising the brand to improve its brand awareness.

Opportunities:

• Garmin can significantly initiate a joint venture with the manufacturers of aircraft in order to supply the dashboard upstream.
• Garmin can bring reduction in the product offerings, and can invest in the research and development in the declining segments.
• GPS’s modernization with respect to the changes in the support system of the states such as the United States of America.
• Failure in retaining the competitive advantage in the market might result in declining thesales and profit of product segments or categories.
• Increase in the competition with existing and new competitors would result in price reduction, reduction in order numbers and loss of market share.
• Changes in the tax laws would result in consequences of tax for the organization,resulting in financial instability.

Porter Five Forces:

The trends of PND industry tend to be highly competitive due to the variation in the products and geographies diversification. It is believed by Garmin that the principal competitive factor influencing the market growth is based on the product’s design, functionality, quality, reliability, to its brand reputation and customer services. However, Garmin competes favourably with its competitors such as Tom Tom, MiTAC and many others in the market but, due to the use of advanced technological approaches, the intensity of the competition is moderate………..

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Swot analysis of garmin 2019.

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Garmin 2019 SWOT Analysis

Introduction.

Business provided more than 200 activities in its theme parks along with seasonal activities based on the cultural environment of its parks in numerous nations and cities and the business was extremely diversified. In addition, in order to guarantee the maximum customer satisfaction, the business had actually provided commitment programs to increase visits of duplicated clients. In order to broaden into new cities and countries, the business had actually adopted franchising design so that the business might protect its incomes and benefit from the threat of decline of various currency.

Problem Statement

Business dealt with increased domestic and global competitors due to changing consumer preferences, variations in the entertainment industry trends as a result of growing need of theme parks and increasing consumer's interest in customization and material due to high internet penetration and use of wise gadgets. In addition, the business suffered significant decline in income as result of decline of local currency against the U.S dollars. In order to safeguard, itself from increased competitors and maintain its acknowledgment as a key player in the around the world entertainment industry, business proposed 4 techniques, but was worried which of the tactical choice would provide high value to the company and lines up with its organisation model and core values.

Internal Analysis

SWOT Framework:

• Business has a huge geographical reach, consumer base and preserves a strong brand identity.
• The business's emphasis on continuousproduct innovation, making it possible for the business to maintaininga strong market position and to improve its consumer complete satisfaction.
• The company had been quite effective in achieving moms and dad's choice and was extremely relied on due to its organisation model of providing safe education and learning environment to children by teaming up with schools, industry networks and instructors.
• Garmin 2019 case solution parks are highly preferred by kids, as it provides 200 plus activities, 90 different trades and experts to be performed by each child and other advantages, such as: commitment programs.

Weaknesses:

• Business has experienced lack of financial and technical resources, which has actually limited its capability to grow its service locally and globally.
• Garmin 2019 case help is dealing with increasing decline of Mexican Peso, which has actually resulted in decreasing of the monetary performance.
• The business has lack of experience and knowledge of operating in style and amusement park in industry, which has actually limited its diversity in the extremely required and rewarding theme park market.
• Garmin 2019 deals with serious competition from international and domestic rivals along with quickly altering trends of entertainment industry and consumer choices. This might lead to organisation losing its identity as a strong brand and key player
• The business experiences an increased risk of replication of its service design by numerous rivals. Business model is the core strength of the business and the main factor of company's success.
• The increasing devaluation of Mexican Peso versus the U.S. dollars might decrease business's financial stability.

Opportunities:

• The business can get the opportunity of increasing need of amusement park in U.S. by entering the U.S. entertainment industry.
• Thinking about the high web penetration in Mexico, business can take advantage of this chance by establishing an interactive digital platform for marketing its organisation and drawing in maximum customers.

SWOT Analysis

VRIO Analysis:

In order to evaluate the business's abilities, resources and competitive advantage, VRIO structure is used.

VRIO Analysis

External Analysis

Porter Five Forces Framework:

Bargaining power of supplier:.

The bargaining power of supplier seems low, considering the reality that Garmin 2019 is a prominent international brand name with a large client base. The suppliers of the business, that include: Sponsors, industrial partners and mall would want to sustain their association with the brand name due to the guaranteed earnings and positive image.

Bargaining Power of Customer:

The bargaining power of Garmin 2019 case help customers in Mexico appears to be low as there are few regional parks found in Mexico, providing ingenious and interesting services which Garmin 2019, Mexico offers to its consumers. However, the bargaining power of customers of the general indoor entertainment industry seems high as there are lots of players in the international show business therefore, the changing expense for customers will be lower.

Threats of New Entrants:

The risk of new entrant in the entertainment seems high thinking about substantial growth prospects in the entertainment industry and less investment requirement due to an increased market effectiveness as a result of intro of digital platforms. However, as establishing leisure and amusement parks require big capital, the hazard of new entrants in overall entertainment industry appears to be lower.

Rivalries among Competitors:

There appears to be serious competition in the international and domestic market as an outcome of increased number of amusement and theme parks in the U.S, which include: Walt Disney, 6 Flags and Sea World. Other rivals which postured a severe hazard to the business's operations consisted of Kidzmondo, a Lebanese company and Divercity, a Latin American business.

Threats of Substitutes:

The risk of alternative in the general entertainment industry seems to be high thinking about various options are available for kids which includes amusement parks, theme parks, mobile apps, TELEVISION programs, game, increased usage of phones and gizmos and high web penetration.

Porter’s Five Forces Model

PESTLE Framework:

The business's operations and tactical choices are impacted by numerous political aspects, such as: undesirable laws and policies in relation to merchandise trade, protection or acquisition of intellectual property and high tax rates in certain cities. In addition, the foreign government might refuse to permit the business to establish a park in the country affecting its strategic choices. In addition, political instability in the nations where Garmin 2019 operates will impact its company and growth considerably.

Economical:

This suggest that the business's choice to expand its operations to Doha will be advantageous. On the other hand, the Currency of Mexico, which shows that the currency of Garmin 2019 case help is diminishing against the U.S dollars, affecting the organisation's success and monetary stability.

The social factors such as high internet penetration, use of social media, Mobile Apps and games have actually moved the kids's focus from going to regional parks to hanging out on their gadgets. This has affected the organization's organisation locally and globally. In addition to which, the children's requirements and choices have altered from checking out local parks to going to style and theme park, such as: Disney.

Technological:

Promoting and incorporation development in its company model have actually been the essential success aspects for the organization. The business highly believes in bringing brand-new services and introducing brand-new activities in order to engage and bring in the kids. The organisation is thinking about to present an online platform to market its services to the client at lower cost.

Garmin 2019 case solution is a highly varied business, for that reason, it is highly subjected to discrimination laws referring to worker's recruitment, respecting the cultural differences and using cultural related activities. The company is exposed to high compliance with healthy and security laws in relation to offering secured and safe environment to customers and labor force. In addition, business has an obligation to comply with laws relating to establishment of park considering the emotional and physical protect.

Environment:

The business is subjected to ecological laws as facility of national parks, leading to soil disintegration, triggering a disruption to wild life as well as an increased sound pollution. In addition, the national forests go through other environmental concerns, such as water lack, climate modification and tourists tourist attraction.

PESTEL Analysis

Proposed Strategies:

Alternative 1- Growth in Number of Parks:

Thinking about, greater development prospects for entertainment industry in The United States and Canada, it was proposed to develop 6 to 8 parks in 15 urban cities of America at an expense of 30 million for each park. From quality perspectives, the strategy appears feasible thinking about greater earnings will be generated as outcome of operating in big cities as compared to the smaller markets. Likewise, the business has a comprehensive experience in structure larger parks in cosmopolitan cities.However, business does not have any experience of operating in America, therefore thisstrategy appears to be risky.

Alternative 2- New Formats (Entering into Small markets):

This technique includes theconstruction of small parks in little cities with greater GDP development and population, such as: Doha. Although, this would result in smaller profits as compared to operating in bigger cities and needs less investment.Growth will be achieved as compared to other parks as limited activities will be availed considering the little size of the park, which will enable the customers to check out again to get other services.

Alternative 3- Interactive Digital Platform:

The proposed strategy involves the intro of an interactive digital platform for the purpose of reinforcing the relationship with children by supplying physical experience of the park in a virtual world. Thinking about thefact of high penetrationofinternet and use of phones and electronic gizmos, business will be able to draw in optimal variety of consumer through this technique.

Alternative 4- Content Development:

The strategy involvesoffering educational material to the kids using interactive role plays and producing content for films. The strategy will ensure that the business accomplishes its core objective of providing academic and learning environment to the children. Thinking about greater growth prospects in the movie market, the strategy seems a practical option.However the initial financial investment required for the project requires to be kept under factor to consider. The technique may not be acceptable by the company considering the truth that the worldwide development and existence will not be attained by using this strategy.

Alternative Solutions

Financial Evaluation of Alternatives:

In order to examine the financial practicality of each alternative, capital projection for a period of ten years has actually been performed.

Data and Assumptions

It is approximated that the task will attain internal rate of return of -2% and 4% and NPV of -1725 million and $-65 millionin Mexican Peso and dollars. It is predicted that the income will grow by 3 percent each year, which is based on the actual revenue growth accomplished in the year 2013-2014. Other general presumptions which has actually been utilized to evaluate the options, including the discount rate of 10%, depreciation rate of 3%, EBITDA margin of 21.8% and tax rate of 15%.

Alternative-1 Valuation

Business will accomplish IRR of -6% and -0.5% and NPV of -1074 million and -50 million in Mexican Peso and dollars. The unfavorable NPV and IRR of the task suggests that expanding service by targeting smaller sized markets is not a possible option.

Alternative-2 Valuation

Business will attain IRR of 30% and 38% and NPV of 864 million, and 92.6 million in Mexican Peso and dollars. This suggests that from financial point of views, the method appears to be successful and has the prospective to provide higher returns. However, the technique will need a financial investment of $45 million, which is higher as compared to other options.

Alternative-3 Valuation

Business will attain IRR of 33% and 41% and NPV of 1105 million and 115 million in Mexican Peso and dollars. The job requires preliminary investment of 45 million in Mexican Peso therefore, it might be challenging for the business to finance the job considering the decreasing profits due to an increased competitors and currency devaluation.

Alternative-4 Valuation

Quantitative Analysis Summary

Alternative valuation summary.

Recommendations

Based upon the analysis performed in the report, it will be suggested to the business to use the fourth technique i.e. grow business by investing into content development in order to enhance consumer experience. The technique is economically feasible as it is estimated that optimum IRR and NPV will be produced through this project as compared to other options. Likewise, due to an increased risk of new entrants in addition to an extreme rivalry among rivals, participating in bigger cities will not be helpful for the business.

Action Plan:

In order to implement the method of building material development, the business would be required tohave collaboration with distinguished organisations involved in material development. These content developers will build the content on the websites considering, the academic need, changing preferences of children and cultural factors and aspects of regional customers. Business can also acquire recognized content from prospective content suppliers, such as: Walt Disney, which will guarantee operational performance is attained, functional costs of business is decreased and customer engaging material is created.

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Garmin 2019 Case Analysis: Challenges and Opportunities

Clear and accurate key problem(s) statement.

There is one major individual written assignment - A case analysis of Garmin 2019

External Analysis:

• Effective use of applicable analytical tools (PESTEL, 5 forces of competition, Industry Characteristics, Strategic Group, etc.)  
• Drawing relevant conclusions and insight from the analysis and applying them to improved strategy formulation or other recommendations for the company’s future success (competitive advantage).

Internal Analysis: 30%

• Effective use of applicable analytical tools (Value Chain, VRIN).
• Effective and relevant financial analysis, if relevant.
• Clear assessment of firm’s relevant business, corporate and cooperative (e.g. M&A) strategies

Recommendations:

• Corporate Level Strategy
• Business Level Strategy
• Acquisition or Restructuring Strategy
• Main elements of the execution plan
• Recommendations will be judged on their connection with the analysis, overall feasibility and company’s realistic ability to execute the strategy and their originality

Introduction

Garmin, a maker of personal navigation devices (PNDs), entered 2008 as the dominant firm in North America and in a leading position worldwide, with a higher market capitalization than General Motors. But technological substitution – smartphones with mapping capabilities – along with falling prices, product convergence and the installation of dashboard navigation devices hit the company hard, especially in the automotive segment, its main market. With the future of the PND industry in question, stock prices tumbled. In the year between the all-time peak in November 2007 and November 2008, Garmin lost 87% of its value, and its main rival TomTom lost 94%.

After struggling to find its footing amid drastic changes in the PND industry, Garmin charted a new course. Limiting itself to high-end products in the automotive segment, it turned its attention to other segments to leverage its GPS capabilities, expanding into the fitness and outdoor space with wearables and handheld products – the total share of these two segments grew from 11% to 50% of sales between 2008 and 2018. In addition, it continued its niche strategy in the marine and aviation segments, extending the product portfolio to sonars in marine and helicopters/military planes in aviation. As a result, despite the sudden decline of the PND market, Garmin weathered the storm better than its competitors (see Exhibit 1). It was one of the top-performing stocks in the technology sector in 2018 and some analysts predicted Garmin would “carry on the momentum” in the near term.1

However, new clouds appeared on the horizon. With a diversified portfolio of products – activity trackers, fish-finders, flight decks and smartwatches – Garmin had to compete in new segments against new competitors and threats. In the fitness segment, for example, players with mobile connected ecosystems (Apple, Samsung, Huawei) penetrated the high-end wearables market. The more mature marine and air navigation segments, although profitable, were also unlikely to provide major growth impetus.

As Garmin entered  2019, management had to reassess their strategy across the portfolio  of businesses. Did the vertically-integrated, business portfolio approach which had proved successful over the years make sense in the face of disparate competitive pressures in different markets? Could Garmin respond to competitive pressures in its traditional markets by discovering new market opportunities? Or should it refocus on key markets or capabilities (and spin off other units or license their technologies externally) to remain competitive?

External Analysis

While the PND market continued to grow in 2008, it was on the back of aggressive price cuts. Over 41% of the 41 million PND units shipped worldwide cost less than $200.2 Entry-level models were around $100. Industry insiders and analysts were increasingly concerned that PNDs were becoming commoditized and their value proposition vis-à-vis smartphones was weakening. In the summer of 2008, a 3G iPhone—which allowed users access to music, phone, gaming, the Web, in addition to GPS functions—started at $200. Despite their significant superiority in navigation, PNDs were “not looking like a great deal”.3

Margins came under further pressure in 2008-09 as weak consumer spending wreaked havoc on the broader economy. Consequently, unit prices came crashing down in an effort to win customers. To increase PNDs’ appeal, incumbents and entrepreneurs contemplated adding features that were not (yet) available on smartphones. Silicon Valley start-up Dash Navigation, for  example,  developed PNDs that could display real-time traffic, weather and gas price information on a map, and sold them on Amazon.4

The most momentous development after the introduction of the iPhone (summer 2007) –  for  all players in the navigation market – was Google’s announcement (fall 2009) that it would offer a real- time, turn-by-turn directions service—the most requested feature by users of Google Maps—tapping into its existing products/technology for free in the US on Android phones.5 Immediately after the announcement, Motorola and Verizon announced the first Android-based smartphone, Droid. Three months later the world’s largest mobile phone manufacturer Nokia began  bundling  free  navigation with its phones 6 – “another nail in the coffin for PND makers” according to an automotive analyst.7

Digital Maps - The upstream digital map industry was undergoing rapid changes, shifting from static maps stored on a car’s navigation system to a dynamic system that provided drivers with real-time information about traffic and road conditions.20 Following Nokia’s acquisition of Navteq in late 2007, Google switched its map data provision from Navteq to Tele Atlas (acquired by TomTom, also in late 2007) in September 2008 and sped up plans to develop its own digital mapping. In October 2010, Google finally switched to its own data gathered from its StreetView cars, starting in the US, instantly making it a major player in mapping (and soon after, navigation). TomTom developed closer ties with Apple and Tele Atlas eventually replaced Google Maps as the default mapping software of Apple products in June 2012. In China, e-commerce giant Alibaba acquired the number one Chinese mapping company AutoNavi, which held a rare mapping license from the Chinese government and supplied digital map data for China to both Apple and Google, in a two-part deal for nearly $1.9 billion between May 2013 and February 2014.21

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