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Tomtom Case Analysis

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INTRODUCTION
TomTom (TOM2) is one of the largest producers of navigation systems in the world, comprised of both standalone devices and applications. The company leads the navigation systems market in Europe and is second in the US, but as these markets become saturated TOM2’s sales growth rate and profits decrease. Contributing to the decline, Google and Nokia offer free navigation features on GPS-enabled smartphones. Despite competition, TOM2 will increase in profitability due to innovation and their ability to take advantage of external opportunities.
SWOT ANALYSIS
Internal Strengths
TOM2 has brand recognition. According to the company, three out of four people are aware of TomTom products. As TOM2 diversifies into new markets there lies a strength in brand loyalty, as consumers will prefer the products of this established company compared to lesser known competitors, allowing TOM2 to charge premium prices for their brand name. TOM2’s belief in radical innovation is one of their greatest strengths. TOM2 continually develops better routing and traffic information. TOM2 has the world’s largest historical data base of IQ routes and possesses unique real time traffic information updates which empowers drivers to reach their destination better informed. As a result, TOM2 has increased the utility customers gain from using their value-added services. TOM2 can raise prices to reflect this utility or hold prices to induce sales thereby expanding sales volume.
Internal Weaknesses
Portable navigation devices (PNDs) are becoming an obsolete product in Europe and the US. The number of PNDs sold in thousands by TOM2 dropped from 1,997 in 2008 to 1,419 in 2009 and has continued to decline in these countries. Therefore, TOM2 must resist offering narrow product lines solely based on standalone devices, but instead broaden their products lines to include more services and

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