Functional Strategies
SWOT Matrix-
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Strength
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Weakness
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Opportunity
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Threat
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The competitive strategy used by iRobot is the differentiation of products, premium pricing strategy (Hoberg, and Phillips, 2016), usingR&D and the core technology like collaborative systems, semi-autonomous operations, advanced platforms, and human-robot interaction to develop the products. The R&D plays a critical role in diversifying the products based on the needs of the household needs of the customers, and the needs of the US government. Apart from this, the organization has developed education and research robot that helps in creating programmable mobile robots that assist the educators and students to get hold of concepts of programming. This also helps the students to get the basic knowledge about robotics, computer science, engineering, and many more so that they can either pursue a career and become well acquainted with this industry. This is another strategy used to expand the customer base.
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The threat of new entrants
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The threat of substitute products/services
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Bargaining power of buyers
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Bargaining power of suppliers
Hence the bargaining power of supplier is also high. |
Industry rivalry
For example- AB Electrolux, Alfred Kärcher GmbH & Co, Samsung Electronics Co., Ltd |
The different functional strategies of iRobot are as follows-
The iRobot is not a manufacturing organization, the core strength of the company is to design, create, and market robots to the targeted audience. The non-core activities of the organization are outsourced to the third parties that specialize in manufacturing. The third-party manufacturers provide raw material to the organization, the iRobot focuses on developing and augmenting prototypes.
R&D uses core technology like collaborative systems, semi-autonomous operations, advanced platforms, and human-robot interaction to develop the products. The R&D plays a critical role in diversifying the products based on the needs of the household needs of the customers, and the needs of the US government. Apart from this, the organization has developed education and research robot that helps in creating programmable mobile robots that assist the educators and students to get hold of concepts of programming.
The branding strategy that is used by iRobot is educational awareness amongst the children. They motivate the American children to pursue STEM (science, technology, engineering, math) areas. As a result of this, the organization launched the SPARK (Starter Programs for the Advancement of Robotics Knowledge) program. Apart from this, the company uses a differentiation product strategy for instance the organization markets products separately for the US government and the household customers.
The iRobot’s relation with the primary stakeholders is amicable and hence, it focuses on the strategic alliance to develop its product further to reach the market properly. iRobot got into an agreement with the Boeing company to market and create a commercial version of SUGV that was previously developed by the Army’s BCTM (previously known as FCS) program. Additionally, it allied with Advanced Scientific Concepts Inc. to develop the LADAR technology for unmanned ground vehicles.
The core competency and the outsourcing strategy of iRobot are- that iRobot is not a manufacturing organization, the core strength of the company is to design, create, and market robots to the targeted audience (Baradari, 2016). The non-core activities of the organization are outsourced to the third parties that specialize in manufacturing. The third-party manufacturers provide raw material to the organization, the iRobot focuses on developing and augmenting prototypes.
The strategic alliance used by iRobot is as follows- the organization uses the strategic alliance to develop technology, complementary product offerings, and proper access to the market (Russo, M. and Cesarani, M., 2017. For instance, iRobot got into an agreement with the Boeing company to market and create a commercial version of SUGV that was previously developed by the Army’s BCTM (previously known as FCS) program. Additionally, it allied with Advanced Scientific Concepts Inc. to develop the LADAR technology for unmanned ground vehicles. The non-core activities of the organization are outsourced to the third parties that specialize in manufacturing. The third-party manufacturers provide raw material to the organization, the iRobot focuses on developing and augmenting prototypes.
The iRobot markets different products for households and different for the military. What the company did not understand is that it has created a blue ocean of new opportunities (Alam, and Islam, 2017). The competitors are high and have more experience related to the consumer market. Many companies produce the same products at a lower price in comparison to the iRobot.
The R&D uses core technology like collaborative systems, semi-autonomous operations, advanced platforms, and human-robot interaction to develop the products (De Backer et al., 2018). The R&D plays a critical role in diversifying the products based on the needs of the household needs of the customers, and the needs of the US government. Apart from this, the organization has developed education and research robot that helps in creating programmable mobile robots that assist the educators and students to get hold of concepts of programming. This R&D helps the company to provide quality products to the customers and the clients.
As a recommendation iRobot can add premium features to the lower-priced models, which may help the company to increase its competitive advantage by expanding its target market. The company needs to expand its business in Asian markets as well and hence introducing premium features at an affordable price can be used to attract more customers. Apart from this, the company can use patent litigation (Risch, 2015) to enhance its competitive advantage.
Reference
Alam, S. and Islam, M.T., 2017. Impact of Blue Ocean Strategy on Organizational Performance: A literature review toward implementation logic. IOSR Journal of Business and Management, 19(1).
Baradari, M., 2016. Develop the strategic outsourcing with consideration of core competency criteria independence. Journal of Advanced Management Science Vol, 4(1).
De Backer, K., DeStefano, T., Menon, C. and Suh, J.R., 2018. Industrial robotics and the global organisation of production.
Hoberg, G. and Phillips, G., 2016. Text-based network industries and endogenous product differentiation. Journal of Political Economy, 124(5), pp.1423-1465.
Risch, M., 2015. A Generation of Patent Litigation. San Diego L. Rev., 52, p.67.
Russo, M. and Cesarani, M., 2017. Strategic alliance success factors: A literature review on alliance lifecycle. International Journal of Business Administration, 8(3), pp.1-9.
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