Vizio Inc. Harvard Case Solution & Analysis

To market it and to keep it at a large grocery store made it a lot easier for Vizio to make or develop itself into a renowned and a recognized brand in the United States’ television industry. This was one of the major reason for the successful transition of Vizio as a leading television manufacturer. Once the strategy of stocking Vizio at Costco paid dividend in terms of increased revenues, the management of the company approached other retail giants such as Wal-Mart and BJ’s who stocked the television products offered by Vizio at their retial stores. Wal-Mart being the number one retail chain mart in the country stocked Vizio in all the stores country wide which increased the clientbase for the company and eventually helped the company gain increased market share and become a potent force in the industry.

Another major reason for the success of Vizio against the industry giants such as Sony and Samsung was the workforce of the company. Wang had the best employees with strong academic credentials and passion to grow. This was a feature which again supported the cause of Vizio to excel in the television industry.

Along with this, the number of products offered by Vizio was again a strength and a major differentiating force for the company. Vizio constantly considered introducing new products, improved technology and increased features to retain customer and also increase the client base. The element of introducing variety of new products has actually helped in gaining the market share in such a fierce rivalry where the major players had a strong brand name in the market.The. above discussed attributes and features of Vizio have actually made the company gain substantial market share in the television industry.

Question 02: How profitable is Vizio?

Vizio is quite a profitable company in the industry because the most obvious feature or the model it has followed through the start of the company has been to offer products at low cost than the competitors. Along with this, Vizio has been able to remain a profitable organization because it has actually invested money and profits in order to build its brand. The company has considered providing high level of customer satisfaction and support to the customers. The company is profitable with the market share reaching almost 40% in the North American flat panel television market.

The company is ranked at third just after Samsung and Sony with a share of 9%. Similarly, in spite of keeping low margin levels, Vizio has been able to maintain a gross margin of middle single digit to the low double digit range between 5 to 10 per cent. Along with this, the overhead ranges between 4% to 5% and similarly, the general expenses account for a mere 2%. These figures are four to five times less than the industry giants such as Sony and Samsung. The feature to remain low cost is directly proportional to the expenses incurred by the company.

With the current business model, Vizio has been able to achieve profit revenues of $18 million in 2004. Along with this, in another one year Vizio was able to increase profit margins to $142 million. Similarly, by the end of 2006, Vizio has been able to receive earning of $626 million. By the end of 2007, Vizio has gained total revenue of 1.9 billion dollars. The above figures actually present a clear picture about how profitable Vizio has been in the industry and the way it has penetrated in the United States television market. Therefore, it can be said that Vizio is a successful and one of the most profitable and fastest growing brands in the United States.

Question 03: What should Mr. Wang do going forward?

As the case states, Vizio in a short span of time has transformed itself into a reputed brand in the television industry. In spite of the major rivals such as Samsung and Sony, Vizio has been able to grab a substantial market share. Keeping this in mind, and moving forward into the future, Mr. Wang should consider working on its existing business model which is to offer low priced goods to its customers with good quality. This has been the major feature of success for Vizio, therefore, it is highly recommended that Vizio should consider following a similar strategy in the future also. Also, in order to maintain its competitive advantage, Mr. Wang, the CEO of Vizio should consider further expand its product profile.....................................

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